An increase in general aviation insurance claims over the past two years has recently led to a corresponding rise in premiums, said Aviation Specialty Insurance president Matt Drummelsmith. This ends a decade that has been “very friendly” to aircraft policyholders, where “it was almost expected to get a 10 to 20 percent renewal decrease” just a few years ago, he said.
“Sadly, all good things must come to an end. The rash of general aviation accidents over the past year has caught up to the insurance market, which has reared its head significantly over the past few months,” Drummelsmith noted. “It means rates are trending the other way and pilot approval is getting stricter. In other cases, considerations received in the past might no longer be available. All of this is in response to the claim dollars shelled out en masse over the last year or two.”
According to Drummelsmith, insurance markets are cyclical and this latest turn is nothing more than a market correction. “It’s the insurance market’s way of licking its wounds,” he said. “Once reserves are replenished and the industry trends back toward a safer and more acceptable accident rate, you’ll see it swing back in favor of the operators once more.”