Mid-Year 2022 Update
The aviation insurance market in the U.S. has been relatively stable in the first half of 2022 after a prolonged hard market that began four years ago. This has brought some predictability to many aviation insurance buyers who have experienced significant rate increases and additional underwriting scrutiny since 2018. During the first half of 2022, the severe rate increases experienced between 2018 and 2021 have been moderate for accounts with good loss experience.
The moderating rate curve is expected to continue throughout 2022 for many segments of the aviation industry. Even though the rate environment appears to be stabilizing, underwriting standards remain high across the industry, and underwriters continue to seek rate increases on most renewal accounts.
A new carrier entered the aviation insurance market in the first quarter of 2022, bringing new capacity into the marketplace and a more competitive environment among underwriting companies. We have also seen existing carriers looking to expand their offerings and appetite. The combination of a new market entrant and the potential expansion by existing markets has helped alleviate the capacity shortcomings experienced since 2018.
Insurance buyers should keep in mind that aviation insurers and reinsurers are seeking consistent profitable returns from their aviation portfolios. There is a strong shared desire across the industry to establish a profitable floor in an environment of rising claims costs, increasing liability awards, and high inflation.
