Insurance Program Results
Aviation: Pricing Low Despite Rising Claims Severity
The abundance of capital in insurance markets is penetrating the aviation segment, previously marked by ups and downs over the years but now seeming to sustain low prices. Carriers are expanding coverages, taking up more aircraft business and keeping rates low this year despite a flurry of catastrophic losses experienced early this and last year. HCC Specialty, Munich Re, State National and American Financial Group all launched new programs earlier this year. With the growing number of product offerings and widespread use of reinsurance, a large catastrophic event – not necessarily aviation related – will need to occur before aviation insurers can expect any large rate increases to stick.
Lloyd’s of London syndicate Atrium, AIG, Allianz, Catlin, AXIS, Validus Re, Swiss Re and Validus Re’s Lloyd’s syndicate Talbot likely garnered modest increases on renewal rates since they were the markets most exposed to losses from recent plane crashes. The remaining carriers in the general aviation segment – XL, Hallmark, W.R. Berkley, Arch, Partner Re, Old Republic, Starr and QBE – remain largely unaffected by such losses. While Ironshore hasn’t been a main insurer of any of the airlines experiencing losses, it is taking precautionary measures and slightly reducing its book of aviation business.
Adding to the rivalry for aviation business is XL and Catlin’s merger to form XL Catlin, which will create the second largest aviation insurer. Catlin added a follow-form excess policy to complement its aviation program earlier this year. Expect the newly combined carrier to take on more business and roll out new products in the coming year.
The softening aviation market can be attributed in part to safety improvements that have reduced the frequency of claims over the past few years as well as additional improvements made after the recent bout of airplane crashes – Malaysia Airline’s MH370 and MH17 and German Wings’ 4U9525 – during the past year, although the top claim during the past six years, in terms of both frequency and severity, remains plane crashes. This year’s safety initiatives include a global push to improve airline tracking methods with many more airlines adopting real-time tracking technology. Airlines are also growing their passenger counts, freight and flight schedules, all of which is generating organic growth on aviation insurers’ books. Passenger numbers are predicted to increase by 384 percent by 2050, reaching 16 billion, and freight is expected to increase from 50 million tons to 400 million tons by 2050. The consolidation of U.S. airlines will also create larger accounts.
Copyright © Crittenden Research Inc., November 2, 2015
Airlines & Larger Operations
Administered By: Berkley Aviation
Distribution: Direct/Broker
| Industries: |
Aviation Risks & Airports |
|---|
Carriers: Berkley Insurance Co., Gemini Insurance Co., StarNet Insurance Co.
Coverage: Aircraft Liability , Excess, Hull & Machinery, Umbrella/Excess
Limits: up to $50 million (Liability), up to $10 million (Hull)
Airport Liability Insurance
Administered By: Berkley Aviation
Distribution: Direct/Broker
| Industries: |
Aviation Risks & Airports |
|---|
Carriers: Berkley Insurance Co., Gemini Insurance Co., StarNet Insurance Co.
Coverage: Excess, Liability Insurance, Umbrella/Excess
Limits: up to $100 million (Liability)
Commercial General Liability (Aviation)
Administered By: Berkley Aviation
Distribution: Direct/Broker
| Industries: |
Aviation Risks & Airports |
|---|
Carriers: Berkley Insurance Co., Gemini Insurance Co., StarNet Insurance Co.
Coverage: Excess, General Liability, Umbrella/Excess
Limits: up to $100 million (Liability - Combined Single Limit), up to $100 million (Liability - Coinsurance )
Control Tower Insurance
Administered By: Berkley Aviation
Distribution: Direct/Broker
| Industries: |
Aviation Risks & Airports |
|---|
Carriers: Berkley Insurance Co., Gemini Insurance Co., StarNet Insurance Co.
Coverage: Excess, Liability Insurance, Umbrella/Excess
Limits: up to $100 million (Liability - Combined Single Limit), up to $100 million (Liability - Coinsurance)
Fixed Wing Aircraft
Administered By: Berkley Aviation
Distribution: Direct/Broker
| Industries: |
Aviation Risks & Airports |
|---|
Carriers: Berkley Insurance Co., Gemini Insurance Co., StarNet Insurance Co.
Coverage: Aircraft Liability , Excess, Hull & Machinery, Umbrella/Excess
Limits: up to $100 million (Liability), up to $10 million (Hull)
Non-Owned Aircraft
Administered By: Berkley Aviation
Distribution: Direct/Broker
| Industries: |
Aviation Risks & Airports |
|---|
Carriers: Berkley Insurance Co., Gemini Insurance Co., StarNet Insurance Co.
Coverage: Aircraft Liability , Excess, Premises Liability, Umbrella/Excess
Limits: up to $100 million (Liability)
Rotor Wing Aircraft
Administered By: Berkley Aviation
Distribution: Direct/Broker
| Industries: |
Aviation Risks & Airports |
|---|
Carriers: Berkley Insurance Co., Gemini Insurance Co., StarNet Insurance Co.
Coverage: Aircraft Liability , Cargo, Excess, Hull & Machinery, Medical Expenses, Premises Liability, Umbrella/Excess
Limits: up to $100 million (Liability), up to $10 million (Hull)
Agricultural Aviation
Administered By: Phoenix Aviation Managers
Distribution: Program Administrator
| Industries: |
Aviation Risks & Airports |
|---|
Carriers: Old Republic Insurance Co.
Coverage: Agricultural Aircraft Liability , Aircraft Liability
Limits: up to $1.5 million (All Risk Aircraft Physical Damage), up to $500,000 (Liability - Chemical Drift), up to $5 million (Aircraft Liability - Aircraft Applicators), up to $5 million (Premises Liability - Aerial Applicator)
Airports & Government Entities
Administered By: Phoenix Aviation Managers
Distribution: Program Administrator
| Industries: |
Aviation Risks & Airports |
|---|
Carriers: Old Republic Insurance Co.
Coverage: Aircraft Liability , Excess, Umbrella/Excess
Limits: up to $15 million (Aircraft Physical Damage), $300 million - Please Inquire (Excess for Unique Risks), up to $300 million (Primary Airport Liability, Including War & TRIA), up to $300 million (Aircraft Liability)
Aviation Property
Administered By: Phoenix Aviation Managers
Distribution: Program Administrator
| Industries: |
Aviation Risks & Airports |
|---|
Carriers: Old Republic Insurance Co.
Coverage: Commercial Property, Crime, Inland Marine
Limits:
Aviation Workers' Compensation
Administered By: Phoenix Aviation Managers
Distribution: Program Administrator
| Industries: |
Aviation Risks & Airports |
|---|
Carriers: Old Republic Insurance Co.
Coverage: Workers' Compensation
Limits:
Commercial Aviation
Administered By: Phoenix Aviation Managers
Distribution: Program Administrator
| Industries: |
Aviation Risks & Airports |
|---|
Carriers: Old Republic Insurance Co.
Coverage: Aircraft Liability , Commercial Auto, Commercial Property, Contractual Liability, Fire Liability, Garage Keepers Legal Liability, Hangar Keepers Liability, Liquor Liability, Premises Liability, Products & Complete Operations Liability
Limits: up to $35 million (Aircraft Physical Damage), up to $300 million (Liability)
Corporate Aviation
Administered By: Phoenix Aviation Managers
Distribution: Program Administrator
| Industries: |
Aviation Risks & Airports |
|---|
Carriers: Old Republic Insurance Co.
Coverage: Aircraft Liability , Hull & Machinery
Limits: up to $35 million (Aircraft Hull), up to $300 million (Liability)
Ironshore Aviation
Administered By: Ironshore
Distribution: Direct/Broker
| Industries: |
Aviation Risks & Airports |
|---|
Carriers: Ironshore Inc.
Coverage: Aircraft Liability , Excess, Umbrella/Excess
Limits: $30 million single launches - $35 million Ariane launches (Space, launch plus 1 year in-orbit), $14 Million net Hull Limit - $100 Million net Liability Limit, $100 million hull - $300 million liability (General Aviation)
Manufactured Products Liability (Aircraft)
Administered By: Phoenix Aviation Managers
Distribution: Program Administrator
| Industries: |
Aviation Risks & Airports |
|---|
Carriers: Old Republic Insurance Co.
Coverage: Contractual Liability, Hangar Keepers Liability, Premises Liability, Products Liability, Terrorism, War Risk
Limits: up to $50 million (Liability - Combined Single Limit)
Drone Coverages
Administered By: ProSight Specialty Insurance
Distribution: Carrier Direct
| Industries: |
Aviation, Aviation Risks & Airports |
|---|
Carriers: ProSight Specialty Insurance Group
Coverage: Contractual Liability, Products & Complete Operations Liability, Property, Special Event Accident Coverage , Special Events, Third-Party Liability
Limits: Call - for Limits
Aviation
Administered By: XL Catlin
Distribution: Direct/Broker
| Industries: |
Aviation Risks & Airports |
|---|
Carriers: XL Insurance Co.
Coverage: Aircraft Liability , Excess, Hull & Machinery, Products Liability, Umbrella/Excess, War Risk
Limits: up to $75 million (Aircraft Hull), up to $750 million (Liability)
Aviation and Space
Administered By: StarStone
Distribution: Carrier Direct
| Industries: |
Aviation Risks & Airports |
|---|
Carriers: StarStone National Insurance Co., StarStone Specialty Insurance Co.
Coverage: General Liability
Limits: up to $15 million (In-Orbit), up to $100 million (Combined Hull and Liability), up to $45 million (Liability War), up to $20 million (Space launch), up to $15 million (Hull War)
Construction All Risk (CAR)
Administered By: Arch Insurance Group
Distribution: Direct/Broker
| Industries: |
Aviation Risks & Airports, Builders Risk/Home Builders, Commercial Real Estate, Commercial Real Estate (Industrial) |
|---|
Carriers: Arch Insurance Co.
Coverage: Construction/Builders Risk, Excess, Umbrella/Excess
Limits: up to $25 million
Employment Practices Liability
Administered By: Kinsale Insurance
Distribution: Carrier Direct
| Industries: |
Accountants & Accounting Services, Architects & Engineers (A&E), Art Galleries/Fine Art/Museums/Antique Dealers, Auto Service and Repair, Auto/Car Dealerships, Aviation Risks & Airports, Banks, Brokers/Dealers, Camps (Youth, Sports & Enrichment), Chemical Manufacturers/Distributors, Commercial Auto (Public Transportation), Construction Equipment/Machinery/Materials, Educational Risks (School Administrators), Energy Companies, Film Risks, Gas Stations, Hospitality (Hotels/Motels), Insurance Agents, Insurance Companies, Investment Advisers, Lawyers, Logging/Lumber/Forestry Risks, Manufacturers (Hardware), Manufacturers/Manufacturing Risks, Mine/Mining Risks, Miscellaneous Risks, Museums, Nonprofit Organizations, Real Estate Agent/Broker, Research/Research Organizations (Clinical, Etc.), Restaurants, Retail, Social Services, Utility Companies |
|---|
Carriers: Kinsale Insurance Co.
Coverage: Bodily/Personal Injury, Employment Practices Liability (EPL)
Limits: up to $5 million/$5 million (Primary Limits)