Aviation Risk Management & Insurance Solutions LLC

01/14/2023

01/05/2021

Aviation Reinsurance Rates Rise by Up to 250% – Report
January 4, 2021

LONDON — Aviation reinsurance rates rose by up to 250% at the key Jan. 1 renewal date, broker Willis Re said in a report on Monday, with the market still reeling from the impact of Boeing 737 MAX crashes two years ago.

The 737 MAX resumed commercial flights in the United States last week, following a 20-month safety ban after two fatal crashes in five months killed 346 people.

Insurers and reinsurers face claims from the crashes relating to hull and product liability that could amount to more than $2 billion, a large sum in a relatively small insurancesector, Willis Re International chair James Vickers told Reuters.

Aviation underwriters are also suffering from lower premiums due to worldwide lockdowns and travel bans, as insurance contracts are often negotiated based on the amount of time planes spend in the air.

Reinsurers, who share the burden of large risks with insurers in return for part of the premium, are also seeing rate rises in other sectors after years of falls.

Property and casualty reinsurance premiums are up by 25-30% for the riskiest areas of business, the report showed.

But rates are not rising as much as reinsurers had hoped, despite the coronavirus pandemic.

Insurers have themselves benefited from higher rates this year as well as lower claims in areas such as motor, giving them a strong hand in contract negotiations, Vickers said.

“Reinsurers were feeling quite bullish and feeling, ‘this is our moment’,” Vickers said, adding that they had nevertheless “achieved at least rate stability and some rate increases.”

Vickers said the biggest disagreements between insurers and reinsurers had been about cover for cyber attacks and communicable diseases such COVID-19. Reinsurers are largely excluding these risks from policy wordings, he said.

06/03/2020

With all due respect, aviation insurers had the opportunity to control the down slide of rates rather than participate in the race to the bottom. Now that we are there, insurers are suggesting to the airlines that they charge the general public a surcharge so they can pay their insurance premiums? Aren't the airlines getting enormous grants to "survive"? Isn't it time that we all become responsible for running our own business?

Let's try this: Underwriters charge rates that are responsible and actually profitable based upon the exposures not what "the other guy is paying", brokers charge fair compensation for their services, the airlines price their product responsibly and the general public pays fares that make sense.

The coronavirus pandemic is exacerbating what had been a challenging marketplace for the aviation insurance industry.

05/21/2020

Interesting article which brings up many questions. Did the policyholder violate the "use" warranty of the policy allowing underwriters to deny coverage? Probably not. Given this is a confiscation issue, it's likely to be handled by the war risk underwriters Will there be a claim at all? How long will the aircraft be in the hands of the Nigerian Government?. Is there any coverage for the expenses incurred by the crew members and passengers while quarantined for the 14 days? Is there any coverage for the lost charter revenue while the aircraft is confiscated? We'll watch this as it develops.

Nigerian officials have impounded a UK-based Legacy 600 and detained its crew for allegedly violating its travel restrictions.

05/15/2020

This is absurd. I believe the families have all been through enough. Underwriters representing the helicopter operator have responded appropriately and by now have likely settled all of the cases. Even if the passengers were anxious to get to their destination the pilot should have been disciplined enough to set the aircraft down safely.

Following the crash, Kobe’s widow, Vanessa, filed a wrongful death suit against Ara’s estate as well as Island Express Helicopters, the company that owned the helicopter.

03/12/2020

Is bigger better for the client?

Continued broker consolidation leaves buyers with less choices, which combined with a hardening aviation insurance market, could add to your renewal anxiety. Let's face it, the challenge to control your aviation insurance costs requires a long term, strategic plan which takes commitment and focus by your broker.

I would suggest that maintaining customer focus and service may suffer in situations like these given the transition challenges the large brokers face. Risk Managers and insurance buyers expect, and deserve, the full attention of their servicing team. Unfortunately the aviation sector of the insurance business has seen continuous change for the past several years and this certainly won't help. The proverbial musical chair game.

Both organizations have substantial and talented global aviation teams. But when the music stops who will remain? Worse yet, who may run before the music ceases? One plus one never equals two in these situations and the impact that this will have on the client shouldn't be ignored.

It's not all bad though, this will create opportunities as well. Our sector of the insurance world is highly specialized. This will likely support further development of smaller, some privately held, aviation specialists that retain top talent and deliver experienced solutions to their clients without unnecessary and uncontrollable distractions.

For now, keep an open mind. Consider your options which may be much different than you've considered in the past. Take control of your program so change isn't forced upon you with little notice.

Aon PLC’s proposed acquisition of Willis Towers Watson PLC will create the world’s largest insurance brokerage, outstripping rival Marsh & McLennan Cos. Inc.

10/31/2019

It's hard to believe it's been 20 years since we senselessly lost Payne Stewart in a plane crash. Fortunately great strides have been made since then to make the operation and selection of aircraft charter operators more transparent and safer.

Dear Dad,

09/12/2019

Interesting article regarding Starr's position on coverage obtained under false pretenses. I would assume that there are many more cases that are similar in circumstance but have less notoriety.

Not knowing all of the details of this case, it would appear that the signed application for insurance would contain this standard condition

"NOTICE TO APPLICANTS: Any person who knowingly and with intent to defraud any insurance company or other person files an application for insurance or statement of claim containing any materially false information or, conceals, for the purpose of misleading, information concerning any fact material thereto, commits a fraudulent act, which is a crime, and subjects such person to criminal and civil penalties"

The "occurrence" that triggers the policy is the seizure of the aircraft by the Federal Government which is generally covered if the insured purchased war risk coverage. Assuming that Passport 420 LLC did purchase war risk coverage (which is frequently included in the premium and common) Starr would appear to have adequate grounds for denial based upon the representations of the signed application.

(Reuters) — An insurance unit of Starr International Co. Inc. on Friday sued Michael Avenatti, the combative lawyer known for his battles with U.S. President Donald Trump, to rescind coverage of an airplane that Mr. Avenatti used, according to a court document.

08/31/2019

Come on..seriously?

Shame on Mr. and Mrs. Thibodeau for everything about this situation which was at the expense of the general public.

Frivolous lawsuits cost the general public millions of dollars each year. Is there any wonder why insurance premiums continue to climb and airfares are increasing? Someone has to pay for these senseless complaints undoubtedly related to an inherent need for attention and greed.

I guess I'm not surprised that the Thibodeau's will continue to fly with Air Canada but I'm amazed that Air Canada would actually allow them too.

I for one would not want to be exit row seatmates with someone who would hesitate to open the window or unbuckle their seat belt because the French translation of "LIFT" and "EXIT" were too small for their liking.

One more thing, shame on CNN for trying to reach the Thibodeaus for comment. First off, who cares and secondly, the facts as represented in this case point towards the sensationalism and greed that supports the momentum for a litigious society. This case is no less ridiculous that the McDonald's hot coffee case or todays latest, a man suing Popeye's Chicken because he couldn't locate a chicken sandwich.

Despite a growing litany of complaints about air travel, passengers continue to pay for the convenience of flying.