Insurance coverage for the aviation sector could rise by 30 to 40 percent or more, according to a new report by CE Noticias Financieras.
In addition, service providers are expected to tighten their screening policies to ensure that airport and aircraft operations are safe.
Octavio Careaga, president of THB Mexico, an international broker, said: “The conflict in Ukraine will have global repercussions on all insurance policies in the aviation sector.”
“Increases could range from 30 to 40 percent, or more than 200 percent depending on the area of operation. This effect will be reflected as of the second half of the year in all aviation insurance policies”.
Careaga is also concerned about coverage on aircraft illegally seized by the Kremlin.
“While the war coverages provide for the confiscation of aircraft due to war conflict, they are evaluating which coverage is affected if the war coverage or the aircraft which is a contingent coverage.”
“The estimate of the confiscated units is more than $10 billion in losses that the aviation market will pay to the aircraft owners,” he said.
The aviation market is large, but it is also highly specialised and this situation is expected to have an impact on prices more widely throughout the sector.
S&P Global recently estimated that losses in the specialised insurance market could be between 16 and 35 billion dollars due to the conflict.
