Insurers are currently caught between two opposing forces. On the one hand they are seeking to increase discipline across the general aviation market (as well as the aviation sector as a whole), but on the other there is pressure to maintain and even increase participation and income.
As a result, there is an abundance of capacity in the general aviation market which is creating competition for inclusion on well managed insurance programs.
Larger operations, whether fixed- or rotor-wing, tend to attract the most competition for inclusion on an insurance program, but the size and diversity of the general aviation insurance market means that insurers can write varied risk profiles with smaller lines to diversify their income streams. The rise of the advanced air mobility sub-sector will create additional liquidity in this respect.
Rotor-wing fleets attract slightly more interest from the general aviation insurance community in the current climate. This is a result of rating considerations as well as limit requirements because limits and aircraft values tend to be lower on rotor-wing program.
On balance, renewals in the final quarter of 2025 followed the patterns laid down earlier in the year, with healthy insurance capacity available for well-presented insurance programs with relatively benign loss histories.
It is worth noting however that while general aviation capacity is healthy, the level of merger and acquisition activity appears to be increasing. The insurance market tends to operate cyclically, with extra capacity attracted to the market when prices are high and merger activity tending to be one of the ways that capacity is reduced. Market reports suggest that there are several insurers currently in active discussion with one another and if these mergers go ahead, it could gradually reduce capacity in the general aviation insurance market over the medium- to long-term.
Equally, the conflict in the Middle East will have ramifications as the year progresses. At this point there is a lot of uncertainty around the conflict and insurers are generally taking a considered approach, but risk has undoubtedly increased in both the region itself and the nearby air corridors, which have become more congested. Given the uncertainty, it is likely to be worth discussing any changes in activity with insurance partners.
Sub-sector focus
Breaking down the general aviation insurance sector into the individual sub-segments shows slightly different dynamics.
Hull War: Geopolitical events drove a considerable hardening in hull war insurance pricing during 2022 and 2023. The plateau was reached early 2024 before an inevitable trend downwards started as new entrants altered the supply/demand ratio of insurance capacity to the favor of the insurance buyer. In 2025 we saw an acceleration of this as the availability of excess capacity took hold.
The conflict in the Middle East is pressure testing the market, but indications at this point suggest that 2026 could continue ongoing trends. There is the potential for change if further events beyond the aviation industry increase geopolitical tensions, particularly for operations involved in hotspot flying as we discussed in the last General Aviation update.
It should also be noted that the lower premium base of the hull war segment combined with the increasing geopolitical unrestcreates a less robust pricing environment that can be susceptible to swings.
The overall rise in geopolitical instability is leading to heightened scrutiny from hull war insurers.
XS52: XS52 has held up a little more, with ‘as before’ and even rating increases. Not as many insurers are looking to get involved in this class compared to hull war or hull and liability cover owing to its capital-intensive nature and lower earning potential.
Hull and liability: The combination of overcapacity and new capacity in the hull and liability market kept pressure on rates throughout 2025, despite adequacy concerns driven by the high level of general aviation activity and a corresponding increase in incidents.
While the generally soft market is good news for clients, there is a concern that capacity could start to become more constrained as 2026 progresses. The reinsurance placements at the end of January appear to have been completed without significant change to structure or pricing, and this trend and this trend appears to be continuing for the April renewals.
As ever, taking advice early and engaging with insurers with transparency gives everyone involved in the process the chance to build the most appropriate insurance program, not just for today but also for the future.
The risk of an aviation skills shortage…
Over the last few years, the aviation industry has focused on analyzing and taking steps to reduce the risk of a shortage of pilots. The need to ensure a steady stream of talent is a long running issue that faces virtually every sector including marine, and while artificial intelligence (AI) may go some way to improving elements of a skills shortage in certain circumstances, the reality is that it is a long way from being sophisticated enough to do away with senior roles such as pilots that need to be able to respond quickly and correctly in the event that an issue escalates into an incident.
The challenge isn’t just confined to a shortage of pilots and crew though, there is increasing awareness that the pool of skilled engineers and mechanics available for maintenance, repair and overhaul (MRO) operations is increasingly constrained.
…echoed in insurance
The insurance sector itself is not immune to changing demographics and the need to secure a solid pipeline of potential future talent. The sector strives to offer the right education and training to help the rising generation and ensure that clients continue to receive the levels of service they expect.
Like the aviation industry, insurance is constantly evolving, currently with the rise of managing general agents (MGAs) and facilities, and the sector needs to have the skill-base to respond effectively to future demand and expectation.
As we discussed in the previous edition, facilities are becoming a constant across many broking houses. They can be an efficient and cost-effective way to access capacity, but they have to be managed strategically. The onus is on brokers to ensure that they are creating the right programs with the right people at the right times. It can be a very technical job that requires experience to recognize and respond to nuance, so again it is vital that there is a pipeline of talent that matches future needs.
Clients are advised to take a measured approach to their security providers, ensure that they are working with a balanced and future-proofed group of insurers that are adequately rated and offer effective back-end service. At the same time, the current market conditions are generally positive, so it is important to work with insurance partners that are managing this process efficiently to ensure a balanced product that is efficient in the long-term.
2025: a mixed year for safety
Gathering comprehensive information about global aviation losses can be complicated but reports for 2025 performance have started to be released.
According to internal analysis completed by WTW’s Aviation Safety Partnership of the incidents recorded on the Flight Safety Foundation’s Aviation Safety Network database for 2025 suggests that while there was a reduction in the overall number of events, there is likely to have been in increase in liability claims.
“Human factors continue to feature in many of the ‘headline’ incidents,” suggests Duncan Trapp, director of the Willis Aviation Safety Partnership. “Humans naturally play a key role in many aviation incidents, which can strengthen the arguments of those championing AI, and the technology is increasingly being used to monitor or augment tasks traditionally performed by humans. As always, introducing any new technology brings the potential for unforeseen risk and needs to be managed carefully.
