Airline market review Q4 2018 and 2019 outlook
Definitive market direction Underwriter appetite and focus Terms and conditions in the spotlight Consistent application of increased rates Greater appetite for airlines that demonstrate: Rate increases now standard Underwriters looking to rationalise coverage Real and meaningful market engagement Significant concentration of capacity Coverage extensions and/or increase in Stable procurement strategy operational scope have to be justified and/or Composite pricing increasing faster charged for than lead pricing Long-term profitability for insurers Greater focus on detailed underwriting Pricing above lead terms now a reality Positive control of attritional losses submissions Increased reliance on small group of Transparent and detailed underwriting information Enhanced scrutiny on operations to major insurers Strong safety control sanctioned territories Growth in exposures Lead insurer influences Leading to: Lloyd’s forcing change Leaders under senior management scrutiny to “Decile 10” forced change on worst show rate increases Stronger appetite for share amongst insurers 10% of businesses across all sectors Leaders sensitive to following market reaction Strong reputation within insurance market Aviation syndicates have had to evidence Leadership continuity more acceptable marked change in pricing to following market which provides: More agile markets able to increase pricing and coverage consistency “company” stamp proportion durable insurance partnerships Less favourable appetite for airlines Those with no “company” capacity that demonstrate: strong claims leadership at a disadvantage Commoditised buying process Broker consolidation Ancillary coverages Frequent insurer panel changes motivated by pricing alone Consistent attrition or high frequency and/or large losses MMC/JLT Hull War: premium growth with increased rating and remains a volatile trading environment A lack of engagement with insurers Gallaghers/Boston Marks with challenge in capacity Poor communication of operational safety management BCG Partners acquired Ed Excess AVN52E: premium growth with underlying Business impacted by sanction touch points passenger/departure rating static Poor premium payment performance Hull Deductible: determined by individual loss record Leading to: New Starr/Cathedral consortium Shortage of meaningful capacity The need to “buy” capacity to complete the risk 2018 Major airline losses
Horizon Sky Lease Cargo Aircraft: Dash 8 Q400 Aircraft: B747-400 Fatalities: Nil Fatalities: 0 Saratov Airlines Aircraft: AN 148 Fatalities: 71 US-Bangla Airlines Aircraft: DHC 8 Southwest Airlines Pegasus Airlines Fatalities: 51 Aircraft: 737-800 Aircraft: 737-800 Fatalities: 1 Fatalities: Nil Asiana Airlines Royal Air Maroc Aircraft: A330 Aircraft: ATR 72 Fatalities: Nil Fatalities: Nil Air Niugini Aircraft: B737-800 Fatalities: 1 Fly Jamaica Willis Towers Watson Aircraft: B757 Fatalities: Nil
Onur Air Aviation Conference Aircraft: A300-200 Fatalities: Nil Da Nang, Vietnam Cubana de Aviación Saudia Airlines Aircraft: 737-201 Aircraft: A330-200 Fatalities: 112 Fatalities: Nil Xiamen Airlines 12-15 March 2019, Aircraft: B737-800 Fatalities: Nil Iran Aseman Airlines Sheraton Grand Hotel Aircraft: ATR 72 Fatalities: 66 Lion Air Aircraft: B737-800 Fatalities: 189 *Source: Aviation Safety Network statistics 2018 Understanding risk, What are your principal industry challenges? Let us know what your concerns are and we unlocking potential can help you address them. In 2018, we attracted 350+ international delegates to our industry leading conference. This March we will be hosting the event in Are you considering the following? Vietnam covering the major risks being faced by the aviation industry. We will be discussing Brexit Terrorism Cyber how they can be mitigated through new and Check Do you know Are you covered? innovative solutions. Willis Towers Watson your risks? your position would be delighted if you could join us. with us For more information and details on this Talent Geopolitical Sanctions event please contact Modernising risks Be aware! [email protected] benefits retains Regional volatility Many variables talent
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