Menu

Reinsurance News

Aviation rates moderating to stable levels: Gallagher

11th October 2021 - Author: Matt Sheehan

Analysts at Global re/insurance broker Gallagher have reporteded continued moderation of insurance rates in the aviation space, with the average level of increases down notably on prior quarters.

In the Q3 edition of its Plane Talking publication, Gallagher noted that this moderation follows three years of consecutive rate increases and reflects improved underwriting results, including for those at Lloyd’s of London who announced a return to profitability for the first half of 2021.

Underwriters are however, still under pressure to focus on maintaining income and must continue to balance this against the need to support their clients, most of which are still operating way below pre-pandemic levels, analysts said.

Underwriters remain reluctant to deviate too far from model pricing or stated minimum premiums in the policy in fear of falling short on their forecast budgets but most remain willing to be flexible and will listen to broker requests where there is valid justification.

Looking ahead, the fourth quarter is the most significant transactional period for the aviation insurance market with an estimated 60%-70% of the world’s airlines renewing.

RMS

Heading into this crucial renewal period, Gallagher observes that some insurers are holding a harder pricing standpoint, but considering the increased capacity now available and the appetite of their competitors, it anticipates these outliers are likely to soften their positions.

Influencing the pricing dynamic is significant new capacity that has come back into the aviation market during the past nine months, as a number of existing markets have shown increased appetite and are increasingly seeking to deploy extra capacity to the right risk.

“These factors have led to increased competition, and are directly contributable to the rate tempering which we are now seeing,” Gallagher notes.

In terms of future capacity levels, at least two new entrants (Hartford and Lloyd’s start-up Inigo) finalising their respective preparations to enter the aviation market shortly.

Print Friendly, PDF & Email

Recent Reinsurance News

Getting your daily reinsurance news from Reinsurance News is a simple way to receive only the reinsurance industry news that matters, delivered directly to your email inbox.

  • Only email is mandatory, but the more you tell us about yourself the better we can serve you in future!
  • This field is for validation purposes and should be left unchanged.

By submitting the form you are giving your consent to be emailed by us.

Read previous post:
Arch Insurance names Tom Rivers CRO

The international insurance arm of Arch Capital Group has announced the appointment of Tom Rivers as Chief Risk Officer, a...

Close