Aviation accidents and their effects on insurance
Safety is of enormous importance, especially in the field of aviation, and must or will become an increasingly important issue – but accidents still happen. We also see the effects in the developments of aviation insurance.
Spectacular accidents are reported in the media, but a large number of small, private aircraft involved in accidents remain hidden from the public.
Aviation accidents on the rise
According to statistics from Austro Control 1), to which damage must be reported as the highest aviation authority in Austria (Regulation (EU) No. 376/2014), the human factor is the greatest cause of accidents. Not only due to a loss of control during the flight or during take-off and landing, but also due to poor briefing in flight planning and preparation, as well as from airmen ship, i.e. the behaviour and skills of a pilot in terms of dexterity, technique and also awareness of the aircraft, the flight conditions and one’s own abilities.
Technical failure, weather turbulence or e.g. bird strikes are far behind in the damage scenario!
According to Statistics Austria , a total of 64 aviation accidents were registered in Austria in 2020. Despite the Corona year with fewer flight movements, this is an increase of 14.3% compared to 2019. Hang-gliders/paragliders and parachutists are particularly affected (53 incidents). Fatalities are also reported.
The remainder relates to the area of general aviation, whereby commercial aviation in Austria did not file a claim.
Internationally, the year 2020 – despite the low air traffic – was affected by a number of major accidents, with a total of 176 incidents reported worldwide (private and commercial aviation)2. The following are certainly still remembered:
Why choose GrECo?
The insurance market has become extremely demanding. An insurance broker makes the process of gathering the offers much easier, more time and cost efficient and, above all, focused on a tailor made solution for the client. Operating completely independently, we are representing interests and benefits of the insured and not the insurer under both professional and material responsibility.
Our team work provides our clients with in-depth specialist knowledge, committed representation of the client’s interests, providing custom solutions, counseling and excellent support. Such solid foundations are the result of fruitful cooperation of our teams, their perseverance, commitment and an unwavering focus on achieving the best results for the benefit of our clients in a demanding risk management environment.
Natural disasters such as hurricanes, which have a destructive effect on airports and the aircraft on them, are a further potential hazard and source of damage.
If one assumes that a Boeing 737-800, for example, can have a value of around 85 million USD, and that the compulsory liability insurance sums for this aircraft are set at 300 million SDR, the extent for international aviation insurers can be imagined.
Consequences for the aviation insurance market
The consequence of this has been noticeable in the entire aviation insurance market for about two years, especially in rising premiums and increased deductibles, but also higher requirements in the experience of pilots and mandatory simulator training. The other effects are a shortage of capacity, insurers withdrawing from areas of the market and/or reducing the coverage capacity made available for risks. Where two years ago sums of 150 million EUR were underwritten by one insurer, today two to three are needed to cover this sum.
An end to developments in this direction is not yet in sight. The gap between claims expenditure and insurers’ income is still large and needs to be covered.
1) Annual Safety Review 2019
2) Aviation Safety Network
GrECo has appointed Adam Riley as Group Practice Leader Health & Benefits, a newly created executive leadership.
Group Practice Leader Aviation
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