Aviation claims grow, but flying safer: AGCSNovember 7 2019 by Yvonne Lau
Claims are growing and new risks emerging for the global aviation market, despite some of its safest years ever, according to Allianz Global Corporate & Specialty’s Aviation Risk Report 2020.
The report tracked 50,000 aviation market claims from 2013 to 2018 worth US$16.3 billion.
Dave Warfel, regional head of aviation for North America at AGCS, noted: “Overall, aviation insurance claims are increasing in frequency and severity driven by higher values of aircraft, increased repair costs and rising liability awards for crash victims. The volume of claims is also a reflection of growth in air transport.”
Accounting for 57% of the value of all claims analysed at US$9.3 billion, or 27% of all claims, were collision and crash accidents – not just major disasters, but encompassing incidents like hard landings, bird strikes and incidents on-the-ground. The average cost of a claim for an incident on the runway for example, costs US$1.9 million.
Notably last year, Asia’s aviation market sadly saw the Boeing 737-Max Lion Air crash.
Aircraft maintenance and machinery breakdown are other top causes of claims, due to sophisticated and expensive modern aircrafts.
Emerging risks for the industry include a growing demand for trained pilots in conjunction with increased global travel; increased and more severe air turbulence due to climate change; and new technology risks in relation to drones, cyber risk and hacking, system outages and data breaches.
Over the past 60 years, the market has achieved a continuous decline in the number of fatal accidents, even while passenger growth increased significantly. 2015 was the second safest year ever, while 2018 was the third safest. In 2017, there were no fatalities on a passenger jet flight for the first time in 60 years of aviation.
The report was undertaken with Embry-Riddle Aeronautical University, the largest and fully-credited university specializing in aviation and aerospace.
- January 14
The start-up broker wants Ian George to help grow a book in the region.
- November 8
Plane travel is safer than ever, but aviation claims still exceed premiums.
- October 15
The decision has followed a strategic review.
- September 2
Any loss is likely to affect the international reinsurance markets.