Seeing aircraft insurance premiums increasing well in the double-digits year-over-year, the Aircraft Owners and Pilots Association (AOPA) has been working with insurance industry executives and underwriters on strategies for pilots to help buffer the sharp rate hikes.
“We’ve been spending quite a bit of time to understand what’s been happening in the insurance space and come up with strategies to help educate pilots about what they can do to help mitigate the increases,” said AOPA president and CEO Mark Baker.
Rates are going up “pretty dramatically,” particularly in the owner-flown turbine market, said Tom Haines, senior v-p of media and outreach for AOPA, adding some are seeing increases in the 15 percent to 25 percent range and “some way more than that.” This is especially true for owners who are transitioning into turbines, Haines said. For the owner-flown market, which has to absorb the costs on their own, “that’s serious dollars.”
Baker added that some potential buyers are now walking away from new aircraft sales once they learn the insurance costs that are coming with it. Mitigation strategies are important, Baker said, because with the current state of the aviation insurance market, “There are going to be increases.”
Aviation insurers, and especially in the general aviation niche, have lost money for most of the past decade as rates have softened. In fact, in the past year the number of aviation of underwriters has dropped from 18 to 12.
But Baker said this is more than just a market correction for the insurance industry. Insurance costs for the two Boeing Max fatal accidents are estimated to top $1 billion. Add to that other events, such as the fatal 2018 Southwest Airlines catastrophic engine failure. That is against a backdrop where the total premium intake in the U.S. across all modes of aviation is in the neighborhood of $1.5 billion.
AOPA has worked with NBAA and insurance executives on various strategies. Among them are sharing training protocols and other efforts to enhance safety, Haines said, stressing that exceeding minimum safety standards is key in an insurance underwriter’s consideration of rates.
Baker cautioned against being too anxious to switch insurers. It helps when the underwriter “knows your story,” he said. This is especially critical if an owner is stepping into a turbine from a piston.
Seeing aircraft insurance premiums increasing well in the double-digits year-over-year, the Aircraft Owners and Pilots Association (AOPA) and NBAA have been working with insurance industry executives and underwriters on strategies for pilots to help buffer the sharp rate hikes.
“We’ve been spending quite a bit of time to understand what’s been happening in the insurance space and come up with strategies to help educate pilots about what they can do to help mitigate the increases,” said AOPA president and CEO Mark Baker.
Rates are going up “pretty dramatically,” particularly in the owner-flown turbine market, said Tom Haines, senior v-p of media and outreach for AOPA, adding some are seeing increases in the 15 percent to 25 percent range and “some way more than that.” This is especially true for owners who are transitioning into turbines, Haines said. For the owner-flown market, which has to absorb the costs on their own, “that’s serious dollars.”
Baker added that some potential buyers are now walking away from new aircraft sales once they learn the insurance costs that are coming with it. Mitigation strategies are important, Baker said, because with the current state of the aviation insurance market, “There are going to be increases.”
Aviation insurers, and especially in the general aviation niche, have lost money for most of the past decade as rates have softened. In fact, in the past year, the number of aviation of underwriters has dropped from 18 to 12.
But Baker said this is more than just a market correction for the insurance industry. Insurance costs for the two Boeing Max fatal accidents are estimated to top $1 billion. Add to that other events, such as the fatal 2018 Southwest Airlines catastrophic engine failure. That is against a backdrop where the total premium intake in the U.S. across all modes of aviation is in the neighborhood of $1.5 billion.
“The insurance market has bottomed out just as we’re seeing a skyrocketing number of catastrophic loss claims,” Joseph Braunstein, managing director and general aviation practice leader at insurance broker Marsh USA, told NBAA. “Underwriters are now pushing sizable increases because they must remain viable.”
This process is taking longer, Braunstein further said, with renewal conversations now beginning as early as six months in advance of expiration rather than the typical 120 days.
AOPA has worked with NBAA and insurance executives on various strategies. Among them are sharing training protocols and other efforts to enhance safety, Haines said, stressing that exceeding minimum safety standards is key in an insurance underwriter’s consideration of rates.
NBAA suggested inviting underwriters to their facilities so they can have a first-hand look at the safety culture.
“Highlight your safety culture, compliance with IS-BAO, safety management systems, and your training proficiency, including recurrent and additional training,” said Mike Nichols, NBAA senior v-p of strategy and innovation. “Now more than ever, operators need to sell themselves as a manageable risk to their insurers.”
Baker cautioned against being too anxious to switch insurers. It helps when the underwriter “knows your story,” he said. This is especially critical if an owner is stepping into a turbine from a piston.