While we are happy to see 2020 end…we have to wonder what’s in store for 2021?
The aviation insurance market in 2020 will be remembered for lack of underwriter flexibility and insurance company competition, the likes of which we have not seen in multiple decades. Premiums were up significantly, and underwriters returned to more traditional underwriting of pilots and overall risk.
The question now is – what will the aviation insurance market look like in 2021? Unfortunately, more of the same. While it is tempting to blame the market on greedy underwriting, 2020 was not a good year for the aviation underwriters. Even with the premium increases obtained, there were several market forces that left the underwriters with poor financial results:
The aviation insurance companies purchase reinsurance to protect themselves from large losses. As the large losses continue to hit the reinsurance market, the reinsurers will be passing along increased reinsurance premium to the aviation insurance companies – potentially a 50% to 100% increase when their reinsurance renewals come due. No doubt that a portion of these increases will be passed along to insureds.
As aviation insurance brokers, the most frustrating aspects of the market in 2020 were the overall lack of competition among the carriers and the return to more restrictive underwriting. The lack of options was made worse by the underwriters returning to more traditional underwriting. Flexible pilot warranties were replaced by annual make and model specific pilot training requirements. Pilot age was again a hot topic for underwriters. The use of deductibles to lessen underwriter exposure was also back in play so just when we needed options, we did not have any.
This leaves many wondering what can be done to alleviate the issues associated with the current market. There has never been a better time to sell yourself and your operation:
At AssuredPartners Aerospace, we have the experience and knowledge to help you navigate a difficult market. To learn more about the best way to protect yourself on the ground and in the air, visit AssuredPartners Aerospace or contact our team of aviation professionals.