Earlier this I year I spoke with leaders of the aviation insurance industry about the implications of recent trends and market forces affecting the sector. They spoke to me of abundant capacity, consolidation, and more.
“At the time of the two tragic Malaysia losses last year there was a lot of talk about capacity pulling out of the market but we did not see that,” said Nick Brown, CEO of Global Aerospace.
James Weigell, Aviation Underwriter, Atrium, added that capacity has far outstripped demand for insurance, meaning that rate increases have not materialised.
Franc Hangarter, Managing Director of Risk Management, American Airlines, said: “We don’t have control over market forces and we don’t have control over losses that are not our own – but these are the things that factor into the reality of what our insurance costs are.”
With reference to recent moves toward consolidation in the global (re)insurance sector, Steve Hearn, Deputy CEO of Willis Group, explained that these mergers could deliver benefits for insurance buyers – including bigger balance sheets, greater diversity of capabilities and a more global approach.
Reiner Siebert, Chief Insurance Buyer, Lufthansa Group, added: “We will see what happens as a result of the mergers on the horizon, but I don’t think there is going to be any significant decrease in capacity.”
This conversation took place at the Willis-IATA-AAPA Aviation Insurance Conference in Hong Kong. The Willis-IATA-AAPA Aviation Insurance Conference is a landmark industry event, which brings together professionals from across the aviation sector as well as a wide array of partners from related fields as diverse as safety, technology, risk and insurance.
Now in its 13th year, the event is an established brand in its own right and attracts senior representatives from across the Asian aviation and aerospace sectors.