What operators need to know about aviation insurance selection criteria
Published 27 May 2019
Gallagher Australia’s National Head of Aviation Damian Hooper delivers good and bad news for insureds in the company’s 2019 half-year Market Overview Report.The good: Gallagher offers zero deductible on hull insurance to businesses that meet certain requirements, one of the few brokers offering this product concession.
The bad: recent provider withdrawals from the market mean there is little competition and less focus on getting premium through the door.
“Insurers are underwriting for profit as opposed to premium,” Hooper notes. “In addition to that, risk selection criteria are critical: what insurers are prepared to accept in terms of aircraft type, usage and pilot experience.”
Rotor-wing aircraft in particular are subject to increased scrutiny after having enjoyed the biggest reductions in premiums over the past 10 years or so, due to the inherently dangerous conditions where helicopters are frequently deployed.
For commercial aircraft operations the focus is on safety systems, external audits and maintenance ‒ initiatives that provide assurance that the operator is taking action to reduce exposure to losses.
“The Civil Aviation Safety Authority sets standards for pilot experience and maintenance checks, but insurers are setting more stringent levels than the regulatory minimums,” Hooper warns.
Insurers are seeking higher premiums after a prolonged period of poor profitability.
Competition in the Australian aviation insurance market has decreased.
Risk selection criteria have become more stringent.
See Sarah Lyons, Chief Executive – Australia, and Steve White, Head of Marketing & Communications, APAC, introduce the report here.
How to access our first half-year 2019 Market Overview Report
Access the full reporthere. This digital version also has a full PDF version available for download and printing.