While the continuing global pandemic has certainly contributed to the ever-hardening aviation insurance market, the seemingly exponential rise in rates in the late 2020 and early 2021 renewal seasons can be further attributed to other factors. Among them: the rise in reinsurance market rates due to underwriters’ decreased appetite for high-risk, high-liability operations; and the need for the market to replenish coffers after several years of catastrophic claims, both within and outside aviation.
With the number of aircraft and flight hours flown significantly reduced because of the pandemic, one might have surmised that 2020 would have been a profitable year for the aviation insurance industry. But several factors turned 2020 into another loss for the business as claims from weather events, ground collisions, and previous accidents outstripped the reduced premiums collected as most of the airline fleet remained grounded.
