GLOBAL aviation players are facing challenges buying insurance as renewal costs are rising.
The development is putting operators under serious strain as soaring costs for renewal is said to be the highest in more than a decade.
This, according to investigations, was driven by rising exposures and the war in Ukraine, which are driving up costs, with some experts predicting the toughest conditions since 9/11.
With the easing of COVID-19 restrictions, airline passenger numbers are recovering from the slump in demand during the pandemic, with growth strongest in Europe and North America.
Globally, passenger numbers are expected to hit 83 per cent of pre-pandemic levels this year, up from 47 per cent last year, and return to 2019 levels in 2024, according to the International Air Transport Association.
Rising passenger numbers mean increased exposures for airlines and potentially higher premiums, despite a relatively stable rating environment.
In addition, the airline insurance market is digesting potentially large losses from the Russia-Ukraine conflict, putting rates, terms and conditions under pressure.
According to the Chief Executive Officer, Arthur J. Gallagher & Co.’s aerospace practice, Peter Elson, aviation renewals are likely to be among the most challenging in decades during the year Fresh challenges for global aviation insurance buyers