New York, United States, April 04, 2024 (GLOBE NEWSWIRE) -- Aircraft insurance is insurance the insurer provides to cover operational hazards associated with aircraft. The insurers' insurance policies cover a variety of damages/losses sustained by insured airlines. A similar term for aviation insurance is aircraft insurance. A series of aviation catastrophes, most notably the strange disappearance of Malaysia Airlines with more than 200 passengers on board, has dramatically increased the number of people acquiring aviation insurance and the number of claims. Aviation insurance is required due to the perception that flying is dangerous, as air disasters routinely elicit tremendous worry.
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High Cost of Aircraft Repair Drives the Global Market
The number of maintenance, repair, and overhaul (MRO) facilities has expanded proportionally to the burgeoning aviation industry. In recent years, the demand for MRO technicians has increased in the MRO industry. However, the number of technicians seeking employment in the MRO industry has decreased. As a result of rising demand and a decrease in the number of MRO technicians, the aviation industry is experiencing a labor shortage. In addition, the price of MRO services was already high, and it continues to rise due to a rising shortage that has led to the implementation of insurance programs. Some of the airline insurance policies the industry offers cover repairing airline fleet aircraft expenses. Consequently, the high cost of repairing an aircraft would likely drive the expansion of the worldwide aircraft insurance market over the forecast period.
Reduced Market Entry Barrier Creates Tremendous Opportunities
Over the previous few years, participants in the existing aviation insurance industry have suffered financial losses. The economic losses can be attributed to the amount of money paid in claims that exceeded overall insurance premiums in the aviation industry in recent years. In addition, some insurers would prefer to offer a further premium reduction than they did before the implementation of COVID, which encourages new companies to enter the global aircraft insurance market and add new capacity.
With the market entry barrier substantially lowered, there are profitable opportunities for new participants in the worldwide aircraft insurance market. In contrast to current insurers, who have suffered financial losses over the previous few years, new insurers can devise methods to attract customers. Consequently, a reduced market entry barrier will likely generate considerable growth prospects for industry participants, notably new insurers, operating in the global aviation insurance market over the forecast period.
Regional Analysis
North America aircraft insurance market share is anticipated to grow at a CAGR of 2.50% during the forecast period. Due to the rise in airport operations and the spread of airport infrastructure in the region, the region will likely continue to dominate the market over the next several years. The aviation industry in North America has had remarkable expansion over the past two decades, resulting in an increase in airport operations and the spread of airport infrastructure throughout the region. In addition, associations like the International Air Transport Association (IATA) have collaborated closely with airport and government officials on several airport development projects to guarantee that airlines operating in the region have the necessary infrastructure and amenities. As a result, regional airlines and passengers have a pressing need for secure and cost-effective airport infrastructure. Additionally, development projects involving new and existing airports require insurance coverage to cover financial damage/losses.
Asia-Pacific is anticipated to grow at a CAGR of 3.35% over the forecast period. The expansion of the middle class and the rising demand for aircraft is predicted to drive the development of the aviation industry, resulting in a rise in demand for aircraft insurance in the region. Regional airline operators are growing their operations and acquiring modern aircraft in increasing numbers. As a result, their liabilities have grown, boosting the demand for liability insurance in the region. In addition to liability insurance policies, large airline operators are choosing umbrella insurance to cover the astronomical costs of responsibility in the case of an aircraft catastrophe. Consequently, the market for regional aircraft insurance is projected to expand significantly throughout the period under study.
Key Highlights
- By type, the global aircraft insurance market is divided into public liability insurance, passenger liability insurance, combined single limit (CSL), ground risk hull (motion) insurance, ground risk hull (non-motion) insurance, hangar and ground support equipment insurance, in-flight insurance, and umbrella insurance. The public liability insurance segment is the highest contributor to the market and is expected to grow at a CAGR of 3.02% during the forecast period.
- By application, the global aircraft insurance market is divided into commercial aviation and business and general aviation. The commercial aviation segment owns the highest market share and is expected to grow at a CAGR of 3.18% over the forecast period.
- By end-user, the global aircraft insurance market is divided into airlines, airports, aircraft product manufacturers, leasing companies, ground operators, general aviation aircraft operators, air taxi operators, corporate aircraft operators and owners, and maintenance, repair and overhaul (MRO) companies. The airline segment is the highest contributor to the market and is anticipated to grow at a CAGR of 2.81% over the forecast period.
- North America is the most significant global aircraft insurance market shareholder and is anticipated to grow at a CAGR of 2.50% during the forecast period.
Competitive Players
The key players in the global aircraft insurance market are ARTHUR J. GALLAGHER & CO., Marsh LLC, Allianz, American International Group Inc., AXA, Munich RE, Starr Aviation Insurance, Chubb, Willis Towers Watson, and ACE Holding W.L.L.
Market News
- In December 2022, Arthur J. Gallagher acquired Aviation Insurance Australia.
- In January 2023, KKR, a leading global investment firm, and Altavair L.P., a leader in commercial aviation finance, announced that KKR is making an additional USD 1.15 billion commitment to expand its global portfolio of leased commercial aircraft in partnership with Altavair.
Global Aircraft Insurance Market: Segmentation
By Type
- Public Liability Insurance
- Passenger Liability Insurance
- Combined Single Limit (CSL)
- Ground Risk Hull (Motion) Insurance
- Ground Risk Hull (Non-Motion) Insurance
- Hangar and Ground Support Equipment Insurance
- In-Flight Insurance
- Umbrella Insurance
By Applications
- Commercial Aviation
- Business and General Aviation
By End-User
- Airlines
- Airports
- Aircraft Product Manufacturers
- Leasing Companies
- Ground Operators
- Individual General Aviation Aircraft Operators
- Air Taxi Operators
- Corporate Aircraft Operators and Owners,
- Maintenance, Repair and Overhaul (MRO) Companies
By Regions
- North America
- Europe
- Asia-Pacific
- The Middle East
- Rest of the World (RoW)
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