Insurance and reinsurance broking group Marsh has launched a new aviation insurance consortium, which is backed by capacity from four major players, Allianz, AXIS Capital, Sompo International (formerly Endurance), and Fidelis.
Marsh said that the Aircraft Finance Insurance Consortium (AFIC) features a “unique non-payment insurance product” which has been specially created for banks and capital market investors that are involved in financing transactions for new aircraft purchases from Boeing.
The product is only available through Marsh brokers and will offer its clients an alternative aircraft finance insurance product covering new aircraft deliveries.
The consortium of underwriters backing the launch is leading global players Allianz, AXIS Capital, Sompo International (formerly Endurance), and Fidelis.
Marsh said that the AFIC structure has already been put into use by a major international airline to support the financing of its new Boeing 747 and 787 aircraft.
The product will help airlines get more efficient financing, by using insurance to cover the lender’s exposure to default across the duration of funding agreements. The insurance terms can be tailored to suit individual purchase agreements made between Boeing, the airline, and its financial partners.
Bruce Fine, Global Leader of AFIC for Marsh, commented; “We believe that AFIC is a significant development in airline financing globally and will contribute to the growth and diversification of aircraft finance. AFIC offers Boeing customers a wider range of financing options to facilitate the purchase of newer, more efficient aircraft to enhance their fleets, and lenders will be able to conduct new transactions with greater confidence.”