The aircraft insurance market has swung from a soft to hard market “in just a few short months,” according to Matt Drummelsmith of Aviation Specialty Insurance. “What was once a process of sourcing competitive quotes from several carriers has now turned into a matter of hoping the incumbent carrier doesn’t pass off an unjust rate increase.”
Aircraft operators should expect to see their insurance rates rise at renewal, he said, noting universal increases ranging from 5 percent to 30 percent or more, with loss history, industry, and aircraft type among the factors affecting where policyholders will fall within that range. These increases are the result of “massive losses—in both severity and frequency—in a short stretch of time,” including the East River helicopter crash, Grand Canyon helicopter tour incident, Leicester City corporate helicopter accident, and Lion Air Boeing 737 crash this year.
“The vast majority of aviation operators are safe and accident free, which makes it a harder conversation when explaining their rate increases,” Drummelsmith explained. “However, at this point, we have an industry issue, not an individual policyholder issue. It’s like a town or community coming together to support a common cause.”