Skip to main content
main content, press tab to continue
Survey Report

Insurance Marketplace Realities 2023 Spring Update – Aerospace

April 28, 2023

Insurers continue to take a measured wait-and-see approach to the impact of Russia’s confiscation of aircraft, and we don’t expect to see this manifest until some time in 2024.
Rate predictions: Aerospace
Trend Range
Airlines Neutral decrease -10% to flat
Airline hull war Increase +100%
Airline excess war liability Increase +50%
Aircraft lessors/banks Increase +10% to +15% and flat for hull war
Product manufacturers and service providers Increase +10% to +15%
Airports and municipalities Increase +7.5% to +15%
General aviation Neutral Increase Flat to +15% for hull/liability, up to +100% for hull war


Below-average claim activity and plenty of capacity mean that underwriters are under pressure to continue giving rate decreases. However, there could be some significant headwinds.

  • Claim activity has been below $1 billion the last three years but should start trending up as demand continues to rebound from post-pandemic lows.
  • Underwriters are concerned about supply chain issues and repair costs escalating.
  • Claim inflation is due to liability awards.
  • Capacity has been increasing mostly with new entrants rather than existing players expanding.

Reinsurance costs could have an impact on available capacity.

  • All eyes will be on the reinsurance market in the first half of the year as major renewals come up in the April-through-June time frame.
  • Will war losses spill into the H&L market? It’s still too early to be totally confident that they won’t.
  • Deterioration of Boeing Max losses continued to hammer the market in 2022.
  • Reinsurance renewals could mean some scaled-back lines for some underwriters.

Hull war and excess war liability market

  • New capacity was able to keep the rate increases somewhat in check in 2022 after the withdrawals of some major players.
  • The quantum of the Russian war losses is still a big unknown but not likely to get worse.
  • There has been some press lately that a deal could be struck, but it’s a big hurdle to get around the sanctions.
  • Restricted coverage and limits should be able to maintain capacity and stabilize pricing.
  • The events in Sudan will cause further pain for the hull war underwriters.

Aircraft lessors/banks

Hard market conditions prevail with elevated emphasis on geographic aggregation of assets, but the reinflation of the hull war sub-class which led to the disproportional cost increases seen during the past 12 months has led us to expect the market to hold premium at these levels. We expect the impact of sanctions on Russia to result in an unprecedented aviation market claim, with insurers being exposed to previously unquantified hull exposures and with expectations for total industry losses ranging from $10 billion to $20 billion. While the uncertainty of the overall loss magnitude continues, risk perception has already shifted for both direct and reinsurance markets, and the renewal of aviation insurers’ own reinsurance protections will worsen the market conditions in 2023.

  • Combined impact of the Ukraine crisis and airline assets held in Russia is expected to have a far-reaching impact on this class.
  • The majority of claims has been formally submitted to the market and, as widely reported, some lessors have opted to start legal proceedings against insurers.
  • The market remains unable to deliver a consolidated coverage position; similarly for the majority, reserves remain to be set by insurers and reinsurers.
  • Geographic aggregation of assets, sanctions and geopolitics all remain in major focus among (re)insurer senior management and are expected to result in coverage limitations.
  • Market capacity withdrawals have continued with limited new entrants; insurers continue to review application of sub-limit(s) and cover limitations to manage their own aggregation exposures.
  • Reinsurance and retro markets are strictly curtailing coverage and significantly increasing pricing; similarly, direct insurers are expected to reduce offered shares resulting in demand/supply imbalance and higher client pricing.
  • For hull war sub-class, confiscation etc. (paragraph (e) perils of wording) sub-limits and specific country aggregates offered options to moderate pricing; in parallel, non-confiscation options are becoming more expensive as insurers continue to seek the reinflation of this market.

Product manufacturers and service providers

Pressure remains on the aviation insurance market to improve its position on all lines of business. This is mainly due to rising reinsurance cost/claim inflation and the continued possibility of up to a $10 billion payout to lessors as respects Russia’s nationalization of approximately 400 leased aircraft. Despite all the headwinds for insurers, capacity remains available, but that could change any time. Our advice to our clients renewing in the coming months remains the same, i.e., to engage with their team early to get terms and support secured, as it is very challenging to anticipate the direction the market will take and when a shift might occur.

  • Insurers are pushing for premium increases (+10%-15%); however, at the moment, capacity remains readily available for accounts with no new losses or claims deterioration.
  • A few insurers see this as an opportunistic moment to seize larger shares on desirable risks in anticipation of the market hardening.
  • War coverage remains a challenge, and we continue to see coverage restrictions being imposed, especially regarding hull war and war liability writebacks.

General aviation

Underwriters pushing for an uplift in rates, remain focused on 12-month model specific SIM pilot training and look to maintain and grow their portfolios.
Inflation and increased costs for both reinsurance and claims are major concerns for underwriters.

  • Underwriters are facing increased reinsurance costs as well as new underwriting restrictions as they renew their individual reinsurance programs throughout the year.
  • Underwriters continue to cite inflation and increased claim awards as additional drivers for uplift in rates going forward.
  • Supply chain constraints and labor shortages continue to increase the cost of repairs and of aircraft down time, effectively increasing the total cost of claims.

New and existing markets look to deploy more capacity, putting pressure on underwriters to offer more competitive pricing on larger quota share placements.

  • That being said, hull war rates are increasing by up to 100% or higher.
  • In respect of hull war and war liability coverages, we are seeing some capacity restrictions as well as aggregates being imposed going forward.
  • Regarding coverage changes, underwriters are including geographical exclusions in respect of Russia, Ukraine and Belarus, and hull values are being reviewed by both clients and underwriters at renewal.

Environmental, social and governmental (ESG) stances of carriers continue 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.

Airports and municipalities

Aircraft and passenger traffic continues to rebound in a post-COVID era, driving increased exposures on site. Also, large and unique verdicts continue to keep the social inflation and nuclear verdicts fresh in carriers’ sights, leading to a general sense that pricing remains inadequate.

  • Though rating increases continue, we have seen a shift to individual account assessment with more significant changes in appetite, structure and rating if there is an unfavorable loss history.
  • Coverage adjustments to non-aviation excess limits have occurred in the past few years and are less significant moving forward.
  • All markets are still seeking what they determine to be adequate rates.
  • Vertical placements (quota-share) are a good solution to engage capacity on larger limit accounts and establish a more stable program for the future.


The space insurance market has stabilized and has embraced a more disciplined underwriting approach.

  • Risk differentiation is now based on limit requirements and technology-based risk variations.
  • Ample capacity is available for risks with performance heritage, but not first-flight or unproven technologies.
  • Premium rates have remained stable over 2021 – 2023, with rate reductions only on risks with significant technical heritage.
  • The market’s annual premium income target remains $750 million, but it has only achieved ~$600 million (in 2022).
  • However, due to fewer and smaller claims, both 2021 and 2022 were still profitable years for the market.
  • New insurers/capacity have come into the market to replace capacity that exited following the market hardening in 2019-2020.


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 crisis. 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 crisis. 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 crisis 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

Contact us