Aerospace Insurance Market: Aviation Ground Handlers, Security Providers, and Caterers

The insurance pricing trends for component parts manufacturers and non-critical service providers in the first quarter of 2021 are based on:

Key rating factors

For component parts manufacturers, underwriter considerations include criticality of components produced, turnover, limit of liability, contractual indemnities in place, and loss history. For service providers, they are looking at number of vehicles airside, nature of activity, limit of liability, and loss history.

Insurance market notes

Insurers typically look favorably at manufacturers of component parts and providers of low to minimally exposed services airside at airports if the loss history denotes profitability. Both sectors typically have a low frequency of losses and pose reduced catastrophe risk compared, for example, to OEMs. There is a wide range of insurers looking to grow in this sector on both a 100% basis and as part of capacity aggregating facilities. Despite the positive risk profile, the overall premium base is low and has been subject to premium increases as insurers look to charge a minimum premium for limit capacity provided.

Premium trends

The data analysis is derived from the aggregation of hundreds of discrete insurance renewals for aerospace organisations. The de-identified sample set is global and encompasses results from organisations of all sizes, varying claims records, and a range of lead insurers. It should not be read as a guide in terms of what to expect at renewal, but rather an illustration of the general market trend.

Methodology

We use three types of calculations within the chart.

1. Weighted premium average: Total the premium spend per quarter, then map the percentage difference between corresponding quarters in different years.

2. Mean average: Take the percentage difference in premium between renewals for each account, sum the percentage differences, and divide by the number of percentage differences.

3. Rolling average: Accumulate data for the last four quarters and divide by four to get a rolling mean average.