Aviation
Overcapacity drives rates lower
There is currently a strong appetite for aviation risks in the London Market. This is driven by overcapacity in the market following price increases, creating a more attractive environment for insurers.
Changes in policy terms and conditions
Reinsurers have been imposing limitations on terrorism sub-limits.
Underwriting changes
Everest Insurance has started underwriting aviation risks in the London Market.
Geographic/sector differences
The consequences of the Russia-Ukraine conflict continue to reverberate around the aviation sector. The war and the consequent introduction of sanctions have meant that leasing companies were unable to recover their assets from Russian clients. In addition, underwriters are cautious with regards to risks that have any potential exposure to the tensions in the Middle East.
Outlook
Expected range in rate changes for the next 6 months for claims-free portfolios
The price decreases are driven by overcapacity in the market.
Expected capacity change in the next 6 months for claims-free portfolios
We expect capacity to remain stable at high levels in the absence of any major market event.
Expected coverage change in the next 6 months for claims-free portfolios
Unchanged.
The consequences of the Russia-Ukraine conflict continue to reverberate around the aviation sector.
Emerging risks
Tension in the Middle East may escalate which could change market conditions for any risks related to the region and potentially affect the market appetite for aviation risks more generally.
Renewal recommendations
Start the renewal process early to take advantage of benign market conditions and if at all possible, secure a long-term deal.
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