AssuredPartners Aerospace is advising aircraft operators to “hold on tight” because the next 12 to 18 months will be a bumpy ride in the aviation insurance marketplace. The insurance brokerage noted that more details—and litigation—are emerging from losses stemming from the Russian invasion of Ukraine, as well as from the Boeing Max fallout.
“We’re hearing from insurance companies that 2023 could be one of the hardest markets any of us have ever experienced,” warned Josh Jabour, a sales executive with AssuredPartners Aerospace. “This isn’t just for big airplanes, the piston pushers will pay their share as well.”
The brokerage pointed to a complaint aircraft lessor Aircastle filed against several insurers and Lloyd’s syndicates for failing to provide coverage over $265.9 million in damages related to Russia’s invasion of Ukraine. “This is not the first legal case associated with the aviation insurance market and the war in Ukraine,” AssuredPartners noted, pointing to a lawsuit Carlyle Aviation filed earlier this year against 30 insurers for $700 million and another Dubai Aerospace filed against 11 insurers.
Further, Boeing’s claims related to the 737 Max have swelled to $3 billion—“the largest in the history of the aviation market in nominal terms, after the $2.5 billion paid out after 9/11.”
This all will push rates up in renewals and these events "have plunged the market into uncertainty, with some sources bemoaning the lack of reserving for Ukraine losses."