The price of insurance in the general aviation sector is set by a variety of factors, which can be specific to individual organisations, regional or global. At this point in 2023, there are four main global factors in play, some of which may push prices up, some are neutral and others will be likely to lead to pricing reductions.
Towards the end of 2022, the aviation reinsurance markets saw substantial increases to the Boeing Max losses
Despite it all, capacity remains healthy
General aviation market capacity increased during 2022 and into 2023, driven by fresh insurers looking to capture market share, and existing insurers looking to maintain their positions.
This has meant that whilst the narrative has focused on Ukraine and Boeing, in the hull and liabilities market capacity and competition has outweighed any negative impact upon pricing.
Accounts perceived to be safety driven, with good loss records and positive engagement with the markets and industry bodies are seeing offers of capacity in excess of 100%, further driving pricing competition.
How long will this last? As flight activity increases we may see loss ratios tip from positive to negative on a market wide basis, however based on the current outlook the conditions look competitive, with the exception of hull war as we have detailed above.
The key driver from a client perspective is engaging with your broker early, formulating a clear risk management strategy and engage proactively with your insurance partners.
