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Survey Report

Insurance Marketplace Realities 2019 — Aerospace


November 6, 2018

While capacity remains plentiful across the aerospace industry, a more thoughtful and strategic approach will be required to navigate the changing landscape of a market that is starting to level out after 10+ years of favorable market conditions for buyers.

Rate predictions

  Trend Range
Airlines No change or slightly up Flat to +10%
Financial institutions No change or slightly up/down –5% to +5%
Products No change or slightly up Flat to +10%
Airports and municipalities No change or slightly up Flat to +7%
General aviation No change or slightly up Flat to +10%
Space No change or slightly up –10% to flat

Key takeaway

While capacity remains plentiful across the aerospace industry, a more thoughtful and strategic approach will be required to navigate the changing landscape of a market that is starting to level out after 10+ years of favorable market conditions for buyers.


This sector remains stable but is starting to show signs of hardening.

  • While there is still plenty of available capacity, market withdrawals and merger activity among insurers are putting pressure on total available capacity.
  • Attritional losses in this sector have gn over the last couple of years while premium has decreased, squeezing underwriters’ bottom lines.
  • Accounts with growth and favorable loss history can expect flat rates or only slight increases while accounts with little or no growth and unfavorable loss history should expect larger increases.
  • While there hasn’t been a major loss in this sector for some time, there is ging concern over recent liability awards.
  • Losses in 2018 have already surpassed 2017 levels in terms of frequency and severity.

Aircraft lessors/banks

This segment continues to remain stable for buyers, most of whom have loss- free programs, with ample capacity readily available from both domestic and international insurers.

  • The insurance marketplace for aircraft leasing companies, banks and trading groups remains competitive. Capacity is abundant, with insurers prepared to compete for market share due to the long-term profitability of this class.
  • The impact of reduced capacity and a tougher pricing environment in the wider aviation market may result in more stable pricing in this profitable sector, which we expect will remain a buyer’s market.
  • Specific market losses have affected rates, mostly limited to ancillary hull war coverage, which is experiencing significant increases.

Product manufacturers and service providers

Despite evidence of hardening, this segment remains attractive, and global capacity is abundant.

  • Recent large loss reserves and payments relating to major manufacturers are affecting the overall profitability of the portfolio.
  • We are, as a result, seeing signs of market resolve, especially from the international markets based in London and continental Europe, and reductions in premium are now less common, especially from the incumbent carriers.
  • Insurers are reviewing rating levels carefully, restricting underwriters to flat renewals. Any reductions require approval by senior management. Unless the exposure justifies a risk-adjusted reduction in premium, many buyers will find it difficult to achieve pricing reductions.
  • Appetite for long-term deals is declining.
  • Insurer desire remains strong for sub-component product manufacturers where capacity remains plentiful, with limits up to $500 million.

Airports and municipalities

This segment is experiencing a distinct hardening trend.

  • Soft pricing continues only for the few clients with multiyear contracts. Almost no new multiyear deals are being offered now.
  • A few shock losses have shaken the market.
  • Excess layers over a working layer are increasingly attractive to insurers and are more competitively priced.
  • Marketing is apt to be necessary if municipal boards are to benefit from competitive options.

General aviation

The market is hardening quicker than other aviation segments due to loss activity and premiums well below the attritional loss level.

  • Several markets, both domestic and international, have withdrawn capacity from the general aviation market, with helicopters being the hardest hit due to significant losses over the past year.
  • Reductions seem to be a thing of the past, and most markets are pushing for small increases on profitable accounts and significant increases on accounts with loss activity.
  • Presenting new and creative approaches, an attractive narrative, and consideration of alternative insurers can benefit clients in this changing market.
  • Market conditions are stimulating innovation in the use of excess policies, retention structures, and swing protections.


Technology advancements and new applications have created a vibrant business environment for the space sector; space insurers continue to adapt to an evolving marketplace.

  • The highly competitive space insurance market continues to be attractive to the insurance buyer.
  • 2017 catastrophes and several claims and anomalies within the space sector in the first half of 2018 have failed to stem the tide of further rate reductions.
  • Significant overcapacity continues with an anticipation of more capacity emerging during the balance of 2018.
  • Oversupply of insurance continues to be a primary driver in pushing premium rates for both launch and in-orbit risks to their current all-time lows.
Related content tags, list of links Survey Report Aerospace and Space Aerospace and Space
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