Aviation insurance experts have reported that the sub-sector has produced the highest value and most high-profile claims within the global corporate insurance business line over the past five years, from 2019 to 2024. An analysis of more than 32,000 industry claims, totaling $15 billion (€14 billion), revealed that collision or crash incidents account for 63% of the claims, while faulty workmanship or defective products make up 22%. Combined, these incidents represent 85% of the total claim value. Other incidents such as natural catastrophes (4%), machinery breakdown (3%), and fire (1%) contribute to a smaller portion of claims by value.
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According to the latest edition of Allianz Commercial’s Aviation Risk publication, “Claims and Insurance Outlook,” the aviation sector is projected to see gross written insurance premiums (GWP) reach a 20-year high in 2024, exceeding $8 billion. However, the report highlights that the significant increase in aircraft repair costs and a growing shortage of mechanics will impact future claims activity.
The experts emphasized that sustainability remains a major challenge for the industry, though new compliance measures might enhance the green transformation. The publication also noted that the energy crisis and Russia’s ongoing conflict pose significant challenges to the aviation industry and its insurers. Despite these hurdles, the sector has rebounded well, with several 2023 metrics showing record safety results.
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“This year, the volume of global air passengers is expected to hit an all-time high, with a 10.4% year-on-year increase, driven by growth in the Asia-Pacific and North American regions,” the publication stated. “While the general outlook for the industry is positive, there are still many challenges to tackle.”
The aviation market is in an unprecedented position, with the traditional market cycle disrupted by the pandemic and geopolitical conflicts. The continual growth of the aviation sector will see premiums hit a 20-year high in 2024, surpassing $8 billion.
Tom Fadden, Global Head of Aviation at Allianz Commercial, observed a growing interest in multinational insurance and more inquiries for international insurance placements across lines of business. This trend is driven by increasing geopolitical and regulatory concerns, as well as a desire for a highly managed insurance structure. “Yet dark clouds continue to hover for insurers with well-publicized losses and inflation pressuring bottom lines,” Fadden added.
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Cristina Schoen, Global Head of Aviation Claims at Allianz Commercial, noted a troubling trend of increased runway excursions in 2024 compared to 2023, with at least 23 incidents reported globally from January to May 2024. Causes include weather issues and technical problems.
As the aviation sector continues to navigate these challenges, the industry remains focused on enhancing safety, managing costs, and addressing sustainability concerns.
