The article includes comments from Mats and two other leading industry figures, commenting on the opportunities and challenges for the aviation insurance market. The sector may be growing, with some brokers strengthening their aviation capabilities, however, with this growth, comes a reduction of market capacity. Combined with the rising claims volume, the industry is facing a challenging year ahead.


What is the current state of the aviation market and what challenges or opportunities lie ahead?

Mats commented: “There are more risks to review, especially from Asia, and a potential for better risk selection with the right tools and mind-set. Start-ups give a greater challenge with the lack of a proven track record.”

The discussion continued to explore the changes in brokers’ aviation capabilities, with some actually reducing their teams, whilst others have seen the teams impacted by new market entrants. Ultimately, the market has always seen a change of course and uncertainty.


To what extent is the aviation market hardening?

In short, we can be sure that the market is evolving, however it is questionable whether it has fully reached a hardened phase of the cycle. In Mats’ opinion, “if a ‘hard market’ is a market where there is lack of capacity to finalise placement, we don’t see that we – apart from some segments – are there yet.”

He continues “Our models clearly show the total market premium is still not enough to cover both the potential catastrophe loss and the frequency losses, especially as we see increased losses from congestions, new materials and new technology.”


What steps can the market take to mitigate the impact of new technology and materials on attritional claims volumes?

Head of Aviation, Martin Jackson, previously featured in the same publication, sharing his thoughts on the causes of the increase in attritional losses.

Attritional losses are one of the biggest issues facing the market today. The rise in both frequency and cost are cutting away at deductibles.

Mats highlighted the increasing issue of claims from ground collisions at airports, and highlighted some of the measures being taken to limit the impact of these; “Airlines leading the way in risk management are using simulator training for push-back trucks and aircraft bridges, proximity sensors and ‘no-touch’ policies for ground handlers.”

However, to ensure the efficiency of these preventative measures, there must be further co-ordination of benchmarks between airports.

The article also touches on grounding-related insurance coverage, the threat of technology on business models, potential recruitment issues and the future of the insurance market.

You can read the full interview with a subscription here.

 

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