Skip to main content
Survey Report

Insurance Marketplace Realities 2021 – Aerospace


November 18, 2020

Insurers continue to seek financial recovery and long-term profitability.

Rate predictions

Rate predictions: Aerospace
  Trend Range
Airlines Increase (Purple triangle pointing up) +25% to +40%
Aircraft lessors/banks Increase (Purple triangle pointing up) +5% to +15%
Product manufacturers and service providers Increase (Purple triangle pointing up) +20% to +35%
Airports Increase (Purple triangle pointing up) +20% to +25%
General aviation Increase (Purple triangle pointing up) Minimum +25%
Space Rates have stabilized at higher levels (percentage range not applicable)

Key takeaway

After years of soft-market rates depleting premiums to an unsustainable level combined with an unprecedented decline in air travel, insurers continue to seek financial recovery and long-term profitability.

The growing use of analytics represents a rare bright spot in this sector.

  • In a market with unpredictable catastrophic loss frequency, an analytical approach can create a more reliable foundation on which to build renewal expectations and construct an appropriate strategy.
  • With more and more underwriters leaning on their actuaries to set minimum premiums, analytical models that present meaningful counter arguments help set the stage for more balanced and informed renewal discussions, and can provide underwriters with internal justifications for writing the business.


2020 was another loss-making year for insurers, due largely to premium reductions implemented as COVID-19 relief.

  • Global airline premiums have been insufficient to cover losses over the last five years, and 2020 will be no exception.
  • Insurers made strong gains in hitting their premium volume goals in 2019 only to return most of that profit in 2020.
  • Insurers will seek to protect their premium base despite heavily reduced exposure, leading to potential rate inflation.
  • Anticipate minimum premiums and deposit premiums being implemented going forward.
  • Profitability remains a key metric for insurers; however, premium income levels are of the utmost importance.
  • Each insured can expect to be underwritten based on claims and profitability ratios as insurers aim to better correlate rates to results, which we expect will ultimately lead to more insurer consolidation.

Aircraft lessors/banks

Steady rate increases remain a trend as hard market conditions continue to impact this sector.

  • While rates are increasing, capacity remains sufficient, especially for those profitable insureds with a growing fleet.
  • Anticipate current market conditions to remain through 2021 and likely beyond, with rate increases in this segment continuing to be impacted by a trickle-down effect from the more unprofitable segments.
  • Upper management oversight continues to push for the reduction or elimination of soft market enhancements, e.g., credit opportunities, non-aviation coverage endorsements and/or expense limits.

Aircraft products manufacturers and service providers

Although this segment remains relatively stable for non-critical manufacturers and for those buyers with loss-free programs, rate increases are still expected.

  • Large loss reserves and recent aircraft groundings continue to impact this sector’s overall profitability, causing insurers to look for financial recovery through premium growth and possible coverage restrictions.
  • While insurers maintain that accounts are being underwritten on a case-by-case basis, most buyers will still receive premium increases as the entire aviation market continues to harden — despite COVID-19 impacting insured revenues and operations.
  • Following insurers are looking to close the rate differential from the lead insurer, with pricing above lead terms now common and expected.

Airports and municipalities

While passenger movement remains significantly lower than in years past, this sector is still reeling from a handful of shock-losses, as well as overall market unprofitability.

  • Multiyear terms are no longer available.
  • Losses large and small continue to be scrutinized by line underwriters, with a large focus on certain coverages, limits and enhancements, e.g., excess auto liability, excess employer’s liability and even incidental medical malpractice.
  • Though renewals expiring on a 100% placement may continue as before, vertically structured placements are becoming more common, especially if limits exceed $250M.
  • Excess layers over working layers are becoming more popular as a way to build capacity.
  • Marketing will be necessary if municipal boards want to benefit from competitive options — if any can be found.

General aviation

This segment continues to experience higher rate increases due to consistent loss activity, higher aircraft costs and high-profile losses, especially in the rotor wing sector.

  • Insurers’ upper management continues to enforce strict underwriting guidelines, closely reviewing and restricting sublimits, extra expense coverages and premium credit opportunities, as these have cost insurers considerably over the years.
  • Rotor wing operators can anticipate reductions in viable capacity, both domestically and overseas, with limits decreasing and the cost of higher limits exponentially increasing. They may also be declined altogether.
  • Insurers are looking to implement minimum premium levels.
  • Pilot specifications continue to be closely scrutinized, with broad policy provisions now a thing of the past as more insurers lessen their single-pilot book of business and require all pilots to undergo simulator-based training.


After a period of sharp premium rate increases in late 2019 and early 2020, this sector has stabilized at a new higher pricing level.

  • The original market hardening in late 2019 was due to poor underwriting results and poor combined loss ratios dating back to 2013.
  • The market’s new aim is to achieve $750M in annual premium income — up from an average of $500M the past six years.
  • The market has adopted a more conservative and strict underwriting approach.
  • Insurers are focused on limit requirements as well as technology-based risk differentiators.
  • Some reduced pricing is available for lower limits, as well as for straightforward risks with known industry clout.
  • New insurers have come into the market to replace some departed capacity.


Willis Towers Watson hopes you found the general information provided in this publication informative and helpful. The information contained herein is not intended to constitute legal or other professional advice and should not be relied upon in lieu of consultation with your own legal advisors. In the event you would like more information regarding your insurance coverage, please do not hesitate to reach out to us. In North America, Willis Towers Watson offers insurance products through licensed subsidiaries of Willis North America Inc., including Willis Towers Watson Northeast Inc. (in the United States) and Willis Canada, Inc.


Jason Saunders
President, Global Aerospace – North America

Related content tags, list of links Survey Report Aerospace and Space Insurance United States
Contact Us