Mark Huber is an aviation industry veteran who has worked in the flight training, aircraft sales, aircraft component, and airport development businesses. He has flight time in more than 50 different and diverse aircraft, including helicopters, aerobatic aircraft, vintage warbirds, jet fighters, business jets and turboprops, and transport-category aircraft. He has jumped out of several of these—on purpose—with a parachute. His defense and aviation journalism has been published in a variety of national and international periodicals.

Contributor

Mark Huber

The insurance pain for the rotorcraft industry—and aviation in general—is likely to continue for at least another year or two, according to David Watkins, regional manager of general aviation for Allianz.

 


“Premiums are on the rise," he said during&nbsp;a recent webinar hosted by Helicopter Association International (HAI). "We’re 18 months into a hard market” for aviation insurance, circumstances not seen since 9/11. While aviation insurance, at $4 billion to&nbsp;$5 billion per year, represents a relatively minuscule portion of the $800 billion annual insurance marketplace, the Boeing Max accidents and groundings and recent large awards for several fixed- and rotary-wing accidents resulted in big losses. Liabilities associated with the Max already exceed $4.75 billion. Aviation insurance is currently unprofitable, reinsurance is harder to acquire, and brokers are scrambling to find multiple insurance companies to share client coverage for anything much above $5 million.&nbsp;

 


Since 2019, the aviation insurance industry has sustained 24 major losses above normal, and reserves are now depleted, according to Kevin Kovarik, an underwriter for USAIG who also participated in the webinar. And approximately one-quarter of those accidents involved rotorcraft.&nbsp;

 


Despite these factors, operators can use strategies to maintain their insurability and get the best possible rate. “Make a personal relationship with your underwriter,” counseled webinar panelist&nbsp;Joel Heining, a broker with Colorado-based AssuredPartners Aerospace. “And if the relationship isn’t there, make a change.” Heining said broker familiarity and trust in operator safety factor large in a successful relationship.&nbsp;

 


“There’s simply no replacement for a face-to-face interaction,” said fellow webinar participant&nbsp;Colin Bruno, senior v-p and underwriter for Global Aerospace. Bruno advised operators to begin preparing for a policy renewal months&nbsp;in advance because&nbsp;"time is critical.”&nbsp;

 


Watkins agreed. “Brokers need time to assemble a panel of insurers. What took weeks now takes months.” Watkins said brokers “are looking to get a feel for your operation” and examine key elements of the business, including its mission statement, safety culture, safety management system (SMS), and emergency response plan. “It’s about selling your business to the insurers and it’s about training.”&nbsp;

 


“Training is more of an issue in a hard market,” including simulator, scenario-based, and recovery from inadvertent entry into instrument meteorological conditions (IIMC) training, said Kovarik. “You should want to tell your broker about the type of training you do. We have to explain why we put our money behind certain risks. We like to see a third-party set of eyes on your organization. In a hard market, you want to load your hat with as many of these factors as you can.”&nbsp;And that includes comprehensive training and transition plans for new pilots.&nbsp;

 


Watkins agreed, touting the value of SMS and flight operations quality assurance (FOQA) programs to the insured.&nbsp;

 


Other items that factor into insurability and rates include aircraft hull value, age, make, model, and time. However, Watkins said that having an IFR-capable helicopter is of little help unless the pilots flying it have instrument currency; and he noted that certain types of operations with higher liability exposure will always be price-disadvantaged.&nbsp;

 


“High hull value coupled with single-pilot operations is something we are worried about,” said Bruno. Those types of operations typically need multiple underwriters to distribute the risk, he added.&nbsp;

 


These are the kinds of scenarios that can benefit most from a close broker relationship, said Kovarik, who related the case of a low-time pilot customer engaged in a “challenging” operation who was initially declined, only to get coverage after a sit-down in which he was given the opportunity to fully explain his operation’s safety culture and training.&nbsp;

 


Watkins cautioned that during the past soft market, simply joining an organization that focuses on industry safety and provides&nbsp;accreditation such as TOPS—the Tour Operators Program of Safety—did not always produce tangible economic benefit due to pricing pressures and still might not unless an operator can show a compelling application to operations.&nbsp;&nbsp;

 


“While it is important that you are taking part in those organizations," he said, "it is going to be important that you show why you are a part of those organizations, and what you gather from them and bring back&nbsp;and implement into your day-to-day operation. Simply joining some of these organizations isn’t going to trickle down into your day-to-day flight department.”&nbsp;

 


Heining said any direct insurability or rate benefit an operator would accrue from such programs would not likely arrive “until the back end of this hard market.”&nbsp;

Issues regarding financing of aircraft; aviation insurance; tax issues for aircraft operators; new companies and people in the aviation financing and insurance industries.

More Insurance Pain Forecast for Rotor Industry

Helicopter insurance premiums are rising in a "hard market" that could last another two years. 

2024 Corporate Aviation Leadership Summit

Gordon Gilbert

News and issues relating to business, corporate and private aviation, primarily regarding turbine-engine-powered airplanes and helicopters. Subjects include aircraft, engines, maintenance, operations, personnel, acquisitions, accidents, safety, security, and training.

Takes effect April 1, 2026, and applies to non-commercial aircraft

Wash. State Legislators Approve 10% Aircraft Luxury Tax

Matt Thurber

News about bills, laws, regulations and other governmental decisions affecting aviation and aerospace. Topics include FAA re-authorizations, taxes on fuel and aviation activities, environmental legislation, ICAO decisions, governmental mediation of labor conflicts and World Trade Organization disputes and decisions.

Majority of aviation funding would bolster air traffic control system

NBAA Appauds Passage of Bizav-friendly Budget Bill

Sarah Rose

Revenue from every sale is dedicated to support medical flights

Arcadia Jets Supports Angel Flight West Charity Flights

Charles Alcock

News and issues concerning the aviation charter and fractional-ownership industries and markets, including company announcements, regulations, new developments and labor issues.

More In Finance, Taxes, Insurance

Wash. State Legislators Approve 10% Aircraft Luxury Tax

Takes effect April 1, 2026, and applies to non-commercial aircraft

NBAA Appauds Passage of Bizav-friendly Budget Bill

Majority of aviation funding would bolster air traffic control system

Arcadia Jets Supports Angel Flight West Charity Flights

Revenue from every sale is dedicated to support medical flights

French Bizav Group Presses for Reversal of Charter Tax

Solidarity tax has added thousands of euros to the cost of some trips

Preowned Jet Market Shifts as G650 Supply Increases

End of G650 era impacts pricing trends, according to Jefferies

IADA Appoints First Staffer in Europe

The move gives the group its firsrt foothold outside North America

Jetcraft Adds Crypto Payments for Aircraft Buyers

Modern payment option enables transactions with digital assets

Asia-Pacific Turbine Helicopter Fleet Grows in 2024

Asian Sky documents modest gains amid steady demand

AIN Products

SUBSCRIPTIONS

RESOURCES

ABOUT AIN