Story ID: 
Travelers jumps into aviation with both feet
By: Harry Weisberger
Caption: Travelers Aviation, part of The Travelers insurance company, made its debut at the 2007 AIA convention at Indian Wells, Calif.
Word Count: 548
Travelers Aviation, part of The Travelers insurance company, made its debut at the 2007 AIA convention at Indian Wells, Calif. This year in Nashville, Gordon Murray, its president, told AIN that in the past year Travelers has booked premiums in the millions of dollars and continues to look for opportunities. “The marketplace out there is competitive. We look to round out those accounts that are already part of the overall Travelers portfolio which include aviation activities.”He noted that Travelers has been participating in the aviation underwriting market since 1994 through Lloyds of London and as a pool member of a syndicate for USAIG under both the St. Paul and Travelers names. Murray joined Travelers in September 2006 from AIG Aviation as Travelers was setting up its aviation business unit. The specific rationale for Travelers’ entry into aviation insurance, he explained, was that “Travelers has been involved for a long time as a risk-sharing and syndicate participant. The syndicate has been writing airline and general aviation business all over the world except in the U.S. A logical evolution for Travelers, instead of delegating underwriting authority, was to set up an aviation unit in the U.S. to take advantage of its existing underwriting expertise and experience.”Commenting on the increased number of aviation insurance underwriters in the past few years, Murray said, “When I came into the business there were 13 different underwriting markets” (before the number dwindled into single digits). Now, we are the last to enter, but we feel we can compete [more strongly] than some of the seven or eight other new entrants. Some of those are what we would consider a third-tier market, and they cannot offer the capacity and limits that Travelers can.”At AIA ’08, Travelers announced an increase in its capacity enabling it to insure larger aircraft for hull coverage up to $50 million. This, along with Travelers’ existing liability coverage capacity of up to $300 million, gives the company the means to insure intercontinental aircraft such as the G450/500/550, Falcon 7X and Global Express. “This puts us in a league of top-tier providers and enables us to provide the products and services that our aviation customers, especially our large aircraft customers, demand,” Murray stated. Discussing reasons in general for the emergence of new aviation underwriting entries, Murray observed, “The loss history in the marketplace has been good and now there’s plenty of capacity. It’s been so good, in fact, that the people with the money [such as private equity funds] have seen what a great return is to be had on their money and have begun to ask, ‘Why aren’t we doing this?’“The improvement in the marketplace in aviation has a lot to do with technology: advanced avionics, pilot training and a lot of new aircraft with high-tech equipment on board.” These, he said, are influential market factors affecting underwriting standards for premiums and coverages. “What we’re seeing is underwriters tending to offer what we call ancillary coverages at higher limits than during a hard market, in addition to a reduction in premiums to try to attract business.“We ultimately want to get to the light aircraft, and do online underwriting for them,” added Murray. He said owner-flown light aircraft represent an estimated $40 million book of business in today’s market.