Crashes, collisions dominate aviation insurance claims
Rising repair costs, ground incidents and fewer mechanics are all exacerbating aviation risk.
Crashes and collisions accounted for more than half of all aviation insurance claims during last five years, according to a recent study by Allianz Commercial.
The data show crashes and collisions comprised 63% of the overall $15 billion claim value.
“Such incidents do not just include major crashes,” Cristina Schoen said, global head of aviation claims at Allianz Commercial.
“They also incorporate hard landings, bird strikes, and runway incidents like incursions and excursions,” she said. “Runway, taxiway incursions and excursions, as well as hard landings, are among the most frequent causes of claims in the crash and collision category.”
Faulty workmanship or defective products covered 22% of the claim value; natural catastrophes made up 4%; machinery breakdown 3%; fire 1%; slips and falls 1%, according to the data.
Aviation insurance premiums are now predicted to reach a 20-year high. Rising repair costs, ground incidents and fewer mechanics are all exacerbating aviation risk. “In part, the mechanic shortage is a consequence of an aging global population,” Schoen said.
“Between now and 2027, a record number of aviation mechanics will be eligible to retire as more workers reach their 60s,” she continued. “For example, the median age of aviation mechanics is 51-years-old in the U.S., nine years older than the median age of the broader U.S. workforce.”
At the same time, next generation aircraft technologies and applications have begun to impact claims, particularly in engine disassembly and repair costs.
Schoen said repairs on a composite aircraft, which have weeks-long timescales for repair development, are now roughly four times more expensive than the same repairs on metal aircraft.
Meanwhile, the global volume of air passengers is expected to hit an all-time high in 2024, with Asia-Pacific and North America leading the way.
More than 285 million tourists travelled internationally between January and March of this year, marking a 20% increase from the first quarter of 2023 and reaching 97% of pre-pandemic levels.
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