2014 Airline Insurance Market Review: Reality Versus Perception
A spate of accidents during test or demonstration flights in 2014 adversely impacted renewals of aviation and aerospace companies.
Although there is an abundance of capacity in the airline market, the level of capacity available for each individual risk varies greatly at times, and is influenced by a number of factors.
2014 began on the back of an insurance market driven by a wealth of capacity and a lack of major losses for both the airline and aerospace sectors.
In 2013, airline underwriters saw premiums decrease and claims increase, mainly due to high-value hull losses. Underwriting profitability depended on whether an individual insurer had been affected by those risks that had suffered major losses.
The aerospace sector had benefited from airlines’ improved safety levels, meaning fewer manufacturers were being brought into litigation. However, during 2014, a spate of accidents during test or demonstration flights adversely impacted renewals.
The year 2013 saw increased competition as insurers were looking to subsidize their airline income by increasing their share of aerospace risks and, in some cases, by deciding to participate in this class for the first time. The year 2014 began with the very same factors that had been driving the market for the previous few years.
In our 2014 Airline Insurance Market Review, we cover:
- Factors driving insurer capacity.
- Frequency and severity of losses.
- Major claims.
- The 2014 renewal calendar.
- Factors driving 2015 insurance pricing.