General Aviation Maintenance Market Review 2015
With most of 2015 behind us, many in the aviation insurance industry believe that pricing will remain low. As the year winds down, few increases and even some decreases in premium may be expected. Coupled with indicators for growth in the general aviation market, this gives an added boost to any aviation business looking to expand their operation.
A crowded aviation insurance marketplace continues to drive rates down. Despite a historic high of over 25 aviation insurers operating in the United States, not a single underwriter withdrew from aviation this year; this indicates that aviation insurers are surviving with smaller market shares than in the past. All of that is great news for buyers of aviation insurance who will enjoy more options and frequently see multiple underwriters quoting their business.
Commercial Aviation
Insurance for general aviation commercial operators remains very competitive. Insurers continue to broaden their product offerings across more segments of commercial aviation, including maintenance operations.
Maintenance operations, charter, flight schools, and ground operations with no loss history are likely to receive flat renewals or single-digit rate decreases. Clients with recent claims are less likely to see their rates drop; however, we have not seen steep rate increases in these situations unless the loss was significantly large. MROs without losses are receiving flat renewals due to a narrow risk profile when compared to other commercial and charter operations. Overall, the higher incidents of loss in commercial aviation, compared to the corporate sector, has not seemed to affect insurance rates very much.
Small “single mechanic” operators
Rates for small (less than 10 employees) maintenance shops have also decreased in the past year. In this market segment, rates are driven by ‘class’ loss performance rather than individual business loss performance. The good news for business owners in this segment: higher liability limits (which have always been hard to obtain in this sector) have become more readily available. When asking for renewal quotations be sure to ask your broker for higher limit options, they may be more affordable than you think.
The customer wins
In all market segments, overcapacity (a large number of underwriting companies) will continue to be the driving force. Unless a significant insurer departs or dramatic losses occur, rates will remain the same to the end of 2015. Insurers will become more competitive by lowering rates or increasing their services and policy offerings. As underwriters compete for business, the reduced premiums and expanded coverage will contribute to healthier bottom lines for your business. That is good news for everyone in the industry.
Steve Bruss is president of Wings Insurance, an independent aviation insurance broker headquartered in Minneapolis, MN. Steve has 22 years’ experience in aviation insurance, and is also a licensed Commercial pilot and flight instructor. He can be reached at [email protected] or by calling (952) 641-3140; www.wingsinsurance.aero.
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