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Survey Report

Insurance Marketplace Realities 2022 Spring Update – Aerospace

April 7, 2022

Rate increases continue to decelerate with more capacity entering the marketplace and new insurers seeking their share of the inflated premium base created over the past couple years, while incumbent insurers seek to maintain, or in many cases, increase their market share.
Rate predictions: Aerospace
Trend Range
Airlines Neutral decrease increase -5% to +5%
Aircraft lessors/banks Neutral Increase Flat to +10%
Products manufacturers and service providers Increase (Purple triangle pointing up) +5% to +10% or more
Airports and municipalities Increase (Purple triangle pointing up) +10% to +15%
General aviation Increase (Purple triangle pointing up) +5% to +15%
Space Rate changes depend on risk and limit; percentage range not applicable

Key takeaway

Rate increases continue to decelerate with more capacity entering the marketplace and new insurers seeking their share of the inflated premium base created over the past couple years, while incumbent insurers seek to maintain, or in many cases, increase their market share.

However, the impact of the crisis between Ukraine and Russia on the aviation market remains unknown as billions of dollars in aviation assets remain in Russia with little hope of recovery. The aggregate value of such claims could be in excess of those claims stemming from 9/11.


Underwriters are expected to make money in 2021 despite a slight softening in the market toward the end of the year. Worldwide claims were not significant, despite a large hail loss for several domestic airlines, which did not turn out as bad as first forecast. Rates and premium saw downward pressure as capacity expanded slightly due to increased appetite from underwriters, who focused on maintaining their premium base rather than applying rate increases. We expect some buyers will see modest decreases in 2022.

  • Global and domestic capacity is forecast to increase significantly in 2022. While underwriters may continue to look for rate increases on their global books, they will be hard pressed to get them with the domestic airlines, given the exposure rebound from the lows of the pandemic.
  • In addition to adding capacity, some markets are looking to increase their lines.
  • Minimum premiums remain in place for most airlines. This will help underwriters maintain their premium levels in case another COVID variant rises to disrupt the industry.

Aircraft lessors/banks

Hard market conditions prevail but rate increases are starting to plateau as insurer appetite remains strong in this segment. We continue to see greater emphasis on differentiation for loss-sensitive risks.

  • Insurers continue to assess exposure and liabilities to Ukraine, Russia and surrounding areas. Combined impact of the Ukraine crisis and developing airline assets held in Russia may have a far-reaching impact on this class.
  • Increased claim activity has continued, involving repossession expenses and technical records. Prior-year losses are expected to exceed the contingent premium base due to the large number of repossessions.
  • Ground accumulation totals of leased assets globally are beginning to taper off.
  • 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.

Product manufacturers and service providers

After two years of improved performance for insurers, we are starting to see a deceleration in adverse market conditions in this sector. That being said, markets are still pushing for modest rate increases on clean business.

  • Underwriters are targeting larger rate increases on maintenance and repair organizations (MROs)/ground handlers and on accounts with significant loss ratios or significant deterioration in losses.
  • 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).
  • Pricing adequacy is also an increasing focus for underwriters — meaning they will consider numerous factors when determining their technical price.
  • Long-term relationships with insurers continue to benefit buyers and we are starting to see more discussion of potential long-term deals for preferential portfolio segments and clients.

Airports and municipalities

Rate corrections continue as hard market conditions slowly begin to ease.

  • Large and surprising verdicts continue to keep social inflation and the potential for nuclear verdicts fresh in carriers’ sights, leading to a general sense that pricing remains inadequate.
  • Individual account experience and exposures will be more important going forward, rather than the broader market approach seen during the peak of the hard market.
  • Horizontal programs with limits above $250 million continue to be evaluated closely by 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 attractive to insurers.
  • Marketing remains necessary if municipal boards want competitive options — assuming any can be found.
  • Insureds can continue to 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 becoming more standard on excess employer’s liability, when applicable.

General aviation

Although increases continue to decelerate, underwriters are still looking for an uplift in rates.
Underwriters remain very focused on pilot training and require successful completion of 12-month model-specific SIM training. Exceptions typically require senior management approval, and contracted pilots remain under scrutiny.

  • Underwriters are pushing for hull deductibles on fixed-wing managed fleets/charter ops and even some single ship IA fleets.
  • We have seen no major changes in coverages and sublimits as underwriters have been closely reviewing and reducing these over the last couple of years.
  • New capacity is being deployed by new and existing markets, which is putting pressure on underwriters to offer more competitive pricing on larger quota share placements.
    • Underwriters are inclined to stay on current business and are not very aggressive on new business, though this has been changing, and we expect further flexibility as the market softens over the next 12 to 18 months.
  • Underwriters are beginning to consider multiyear deals and we expect to see more of this going forward. As the market starts to soften, underwriters will look to lock in a rate for two or three years rather than face downward rate pressure at annual renewals.
  • Supply chain constraints and labor shortages continue to increase the cost of repairs and aircraft down time, effectively increasing the total cost of claims.
  • Environmental, social and governmental (ESG) stances of carriers have begun to translate into more restrictive underwriting on risks that present an adverse picture on sustainability, e.g., older aircraft with less efficient/higher carbon emission engines.
  • Movement of underwriting talent between insurance carriers may shake up the market some, with underwriters at new markets wanting market share while elsewhere appetite may be limited as leadership evaluates the book for profitability.


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 entities, including Willis Towers Watson Northeast, Inc. (in the United States) and Willis Canada Inc. (in Canada).

Each applicable policy of insurance must be reviewed to determine the extent, if any, of coverage for losses relating to the Ukraine conflict. Coverage may vary depending on the jurisdiction and circumstances. For global client programs it is critical to consider all local operations and how policies may or may not include coverage relating to the Ukraine conflict. 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 and/or other professional advisors. Some of the information in this publication may be compiled by third-party sources we consider reliable; however, we do not guarantee and are not responsible for the accuracy of such information. We assume no duty in contract, tort or otherwise in connection with this publication and expressly disclaim, to the fullest extent permitted by law, any liability in connection with this publication. Willis Towers Watson offers insurance-related services through its appropriately licensed entities in each jurisdiction in which it operates. -The Ukraine conflict is a rapidly evolving situation and changes are occurring frequently. Willis Towers Watson does not undertake to update the information included herein after the date of publication. Accordingly, readers should be aware that certain content may have changed since the date of this publication. Please reach out to the author or your Willis Towers Watson contact for more information.


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

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