Ground Clutter

May 22, 2009

In April I spoke for the annual conference and trade show of the Aviation Insurance Association (AIA) in San Francisco. It is amazing how much the aviation insurance industry has changed since I first spoke for AIA in 1991, when it was a (relatively) small group of mostly agents and brokers. Now the agents/brokers are there in larger numbers, but there are many more people who are connected to the industry in other ways.

AIA vice president Frank Kimmel explains it this way: First, agents/brokers — the people who sell aviation insurance — came to meet with each other, to network, and to take continuing-education courses. Then the insurance carriers (USAIG, Global Aerospace, Allianz, and others) came to network and sell their companies’ stories to the agents/brokers.

Soon these carriers started bringing their underwriting teams and held their own management meetings while at the AIA meeting. Then the reinsurance folks, who handle a part of most every policy in the industry, started coming to talk with and sell to the carriers.

In the meantime, the industry became much more sophisticated as aircraft became more expensive, more complex, and more capable. Liability limits climbed, claims grew, and aviation lawyers showed up to sell their services. Others showed up offering claims services, consultants, computer services/programs, flight training, and repair services.

In short, the AIA convention has become the place to go if you want to sell to the aviation insurance industry. All of this has been encouraged by AIA. Their program has plenty of time for networking so everyone gets a chance to talk to the people they came to see and influence.

The biggest boys and girls in the industry are invited to speak, and they accept. This year the big fellow was Jack Pelton, president and CEO of a little company called Cessna Aircraft Company.

Pelton was surprisingly candid, and discussed the problems of the industry including the economy, financing, and the problems of gearing up for increased production only to see the world take a nose dive. He didn’t offer any silver bullets, but did leave the impression that the private side of the industry is working like hell to provide answers for the problems and to prepare for the growth to follow the bad times.

He also opined that the guvmint (my spelling, not his) is attacking general aviation. (This was one week after Jim Bass, head of Piper Aircraft, lashed out at the guvmint for vilifying business aviation and the same week that Piper was purchased by Imprimis.)

As for me and my house, we agree with Mr. Pelton and Mr. Bass, and hope the joint efforts of the industry can sell our story to the world. If as a best selling book said, you need to dig your well before you’re thirsty, then it’s also true that you need to make your friends before you need them.