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Survey Report

Insurance Marketplace Realities 2022 - Aerospace

November 15, 2021

Rate increases are starting to plateau and increases have eased considerably as the airline industry has seen a replenishment of the global premium base with the return to air travel.

Rate predictions

Rate predictions: Aerospace
  Trend Range
Airlines Neutral increase (yellow line, purple triangle pointing up) Flat to +10%
Aircraft lessors/banks Increase (Purple triangle pointing up) +5% to +20%
Product manufacturers and service providers Increase (Purple triangle pointing up) +5% to +20% or more
Airports and municipalities Increase (Purple triangle pointing up) +10% to +15%
General aviation Increase (Purple triangle pointing up) +5% to +20%
Space Rate changes dependent on risk and limit; percentage range not applicable

Key takeaway

Rate increases are starting to plateau — and in the case of airlines, increases have eased considerably, as the industry has seen a replenishment of the global premium base with the return to air travel; however, it remains to be seen if the global premium base will support an acceptable level of profitability for underwriters. 


Despite the downturn in exposure for the 2020 calendar year, underwriters were able to eke out a small profit — thanks to significant rate increases and application of minimum premiums to protect their premium base. In the bigger picture, underwriters have still lost money over the last five years. 

  • Global traffic has still not recovered, but domestic traffic is up significantly. For U.S. airlines, this will mean a significant premium increase on expiring rates. While underwriters may continue to look for rate increases on their global book, they will be hard pressed to get them with the domestic airlines given the exposure growth from the lows of the pandemic.
  • Capacity has not been an issue, and we are still seeing some new capacity enter the market and some markets looking to increase their lines.
  • We still expect underwriters to apply minimum premiums, but these may start to come under pressure, and the percentages could be reduced.

Aircraft lessors/banks

Hard market conditions continue, and insurer appetite remains strong in this segment. We are seeing greater emphasis on insurer differentiation for loss-sensitive risks.

  • While we expect steady rate increases to continue into 2022, hull war rates are likely to taper off.
  • Increased claim activity has continued to develop, involving repossession expenses and technical records. Losses may exceed the contingent premium base due to the large number of repossessions.
  • Significant premium adjustment based on these developments makes overall sector profitability difficult to measure.
  • Ground accumulation totals of leased assets globally are presently estimated to be in excess of $20 billion, producing unprecedented primary exposures.
  • Overall market capacity remains adequate, especially for those profitable insureds with a growing fleet.
  • Continued underwriting oversight from insurer senior management continues, with heightened focus on technical records, repossession expenses and ground accumulation exposures.

Products manufacturers and service providers

Modest rate increases are still expected on relatively clean renewal business with continued selectivity when it comes to new business and loss-active accounts. However, we have seen an easing of underwriter resolve to push for higher rate increases thanks to improved overall pricing in this class — despite large loss awards/settlements and increased reinsurance costs. 

  • Underwriters continue to restrict some elements of non-core coverage and clarify their positions on others (i.e., excess non-aviation liability, electronic data event exclusions, and software clauses), but not to the extent they have done in the past.
  • A developing appetite has slowed premium increases and restrictions in coverage.
  • Long-term relationships with insurers continue to benefit buyers; this could lead to the return of long-term deals for preferential portfolio segments.
  • The expected upturn in passenger traffic post-pandemic, although welcomed by the industry, raises concern for attrition loss levels, particularly following an extended period of reduced activity for the industry.

Airports and municipalities

Rate corrections are to be anticipated, as hard market conditions continue.

  • Horizontal programs with limits in excess of $250 million continue to be evaluated closely by the carriers and may end up being placed vertically due to reductions in capacity and/or appetite.
  • Creative structuring is more prevalent, with excess layers becoming increasingly more attractive to insurers.
  • Marketing remains necessary if municipal boards want competitive options — assuming any can be found.
  • Insureds can expect non-aviation excess limit reductions, such as excess employer’s liability and excess auto, as well as more clarified exclusions, such as cyber.
  • COVID-19 exclusions are also being added to excess employer’s liability, when applicable.

General aviation

This sector continues to experience rate increases, but the level of increase is decelerating.

  • Insurers are taking a two-pronged approach to underwriting: first, applying rate increases and second, imposing coverage reductions and/or restrictions, especially pertaining to non-aviation coverages and extra expenses.
  • Insurer upper management continues to enforce strict underwriting guidelines, enforcing minimum premium parameters and requiring detailed underwriting information, specifically regarding pilot experience and simulator-based training.
  • Insurers are generally looking to maintain their line shares and limits on existing business, and they remain selective on new business.
  • Buyers are contemplating limit layering and non-conventional structures as insurer appetites continue to vary.
  • Broad policy provisions remain a thing of the soft-market past, with excess non-aviation coverages being reduced or eliminated, hull deductibles being reintroduced or increased, and credit opportunities — such as lay-up returns, profit commissions and good experience returns — being amended or removed altogether.


Since the rate corrections of 2019 – 2020, this sector has stabilized.

  • Risk differentiation is based on limit requirements and technology-based risk variations.
  • The market’s annual premium income target remains $750 million; once achieved, the sector should enjoy profitability.
  • Market income has been hampered by pandemic-related project delays in addition to several large market-wide claims.
  • New insurers/capacity have come into the market to replace some exited/decreased capacity.


Willis Towers Watson hopes you found the general information provided in this publication informative and helpful. The information contained herein is not intended to constitute legal or other professional advice and should not be relied upon in lieu of consultation with your own legal advisors. In the event you would like more information regarding your insurance coverage, please do not hesitate to reach out to us. In North America, Willis Towers Watson offers insurance products through licensed subsidiaries of Willis North America Inc., including Willis Towers Watson Northeast Inc. (in the United States) and Willis Canada, Inc.


Jason Saunders
Global Aviation and Space Industry Vertical Division Leader, North America

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