COPA members may already have noticed higher costs the last time they renewed their aircraft insurance policy. They are forecast to rise yet higher.
“The last decade and a half, which was mostly characterized by decreasing aviation insurance costs, has ceased and now we are seeing rates rise,” said Michael McEwen, who heads up the Canadian office of HDI Global SE, an international insurance company based in Germany. Although McEwen was referring more specifically to commercial operators, the same situation applies to insurers of privately owned aircraft.
“Poor underwriting results due to low rates, higher repair costs and an increased frequency of attritional losses have markets reconsidering how much exposure they want to take on and re-evaluating what is acceptable rating,” added McEwen. “In some cases, we have even seen markets that underwrite aviation risks, including in Canada, exit the class altogether.”
McEwen also cites the current pilot shortage, and the resulting placement of less-experienced pilots on some airline flight decks, as a factor. “…airlines are hiring experienced pilots from other operators, and in turn those smaller companies are having to bring in a higher than usual number of new pilots to train and fill those positions. This has reduced overall pilot experience levels.”
According to Bernard Gervais, COPA’s president and CEO, COPA members will continue to enjoy the lowest aircraft insurance rates in Canada.
Look for an article by Belinda Bryce of Magnes, COPA’s aircraft insurance brokerage partner, in the May issue of COPA Flight. Bryce will be elaborating further on what to expect at renewal time.
Photo credit: Gustavo Corujo