Aviation industry expects double-digit premium hikes

The aviation industry is preparing itself for insurance premium escalations that may run into double digits, for the first time in 15 years. Insurers have been battling higher costs due to aircraft groundings following fatal crashes.

Renewals since 2017 have shown increasing premium pricing in the aftermath of costly plane and helicopter groundings. Speaking to Reuters on the sidelines of the Aircraft Builders Council conference in Montreal, Global Aerospace executive Simon Abbott said: “We have been seeing gradual growth in rates over the last year to two years, but the level of increases has certainly picked up since the MAX losses. The single-digit increases of last year have become very definitely double-digit this year.”

The grounding of Boeing’s 737 MAX has put further pressure on rates, even as underwriters try to tighten insurance contract language governing groundings.

Global Aerospace, a joint venture of two of the world’s largest reinsurers, Munich Re and Berkshire Hathaway, was the lead insurer on Boeing.