Aerospace Insurance Market: Aviation Lessors and Financiers

The insurance pricing trends for aviation lessors and financiers in the first quarter of 2021 are based on:

Key rating factors

Underwriter considerations include fleet value of aircraft on lease, airlines being leased to, location of possessed aircraft, future outlook of leasing plans (for example, how long aircrafts are expected to remain possessed), and loss history.

Insurance market notes

Insurers continue to look positively upon leasing risks following a sustained period of profitability. However, COVID-19 has changed the risk profile in several ways, including the grounding of many fleets worldwide, which has led to significant accumulation risk on the ground. At the same time, many leased aircraft are being returned to lessors, increasing the number of ferry flights and the percentage of possessed aircraft compared to previous years. Finally, as aircraft are returned, there has been a rise in technical records claims, as well as claims for repossession expenses in territories where repossessions are challenging. Insurers are attempting to remove this coverage.