For the first time in over 10 year the broader market is seeing an increase in rates. The Aviation market is much smaller in comparison to the entire industry and we are along for the ride. The justification for the increases comes from the catastrophic losses over the past two years leaving the insurance companies suffering from losses that have to be adjusted for. The good thing is we’re mostly seeing modest increases around 10%, which is considered by some companies still below normal levels. This indicates continued increases for the next few years.
Underwriters are also starting to require higher safety standards, like pilot training, as a way to help offset some increases, which means formalized manufacturer approved simulator training and higher pilot hours.
We could see a few companies pull out of unprofitable segments of the market, leaving fewer companies competing over the same business. While dual-flown professional turbine or jet aircraft insurance remains profitable for most companies, owner flown turbine and jet aircraft is unpopular amongst the companies. Flight schools have taken a hit, this is due to low rates and high service requirements. Helicopter insurance is also showing increases. Several companies have scaled back on helicopters, and losses have pushed rates higher. However, the most of the stress is coming from the broader insurance market, which have a greater impact on the aviation insurance market than its own losses.
While loyalty to an insurance company can pay dividends, be sure to shop around and get a quote from all available companies, and if you're in the market to purchase an aircraft give your broker a call to discuss which aircraft are more favored by the underwriters.
--Aviation Marine Insurance Services, Inc.--
Is a full service retail insurance brokerage that places all lines of insurance for its aviation clients. Founded in 1978, our mission is to provide the same level of care as if your interests were our own.
Cover photo courtesy of The111th.com
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