The story in aviation insurance over the past decade has been a precipitous descent in premiums across all lines of coverage.
“We have a 10-year client where, when we first wrote the account, pricing was about $80,000 a year. When it renewed this year, it was about $16,000 and there were six different insurers competing, all within $500 of each other,” says Jeff Rasmussen, president of Aero Insurance LLC in Madison, Wis.
Renewal premiums across the aviation industry have dropped nearly 11 percent through August 2013, according to Willis. That represents a $54 million-dollar decline in premium despite an average increase in fleet values of 8 percent during that same time period. Which amounts to a buyers' market across hull, liability and cargo insurance lines, particularly among owners of higher-valued aircraft.
“It takes the same amount of underwriting to insure a $30,000 Cessna 172 as it does a $1 million Citation, so you're seeing a lot more competition on those [higher valued] planes, along with competition for corporate operators, large flight schools, and FBOs [fixed based operators],” adds Rasmussen.