The Mystery of Aircraft Insurance
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The Mystery of Aircraft Insurance
Over the years our policy for a Cessna 150 has hovered around the £1000/1100 mark with four nominated pilots crown indemnity and cover for Europe and Africa.
Renewal arrived today at £900. Aircraft insurance does not seem to follow the normal (car) rules of keep jacking up the price until the owner realises he's being ripped off and changes insurer.
Renewal arrived today at £900. Aircraft insurance does not seem to follow the normal (car) rules of keep jacking up the price until the owner realises he's being ripped off and changes insurer.
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Long ago there was one syndicate which did all the UK insurance through brokers. Now there is a lot more competition from outside the UK. My first insurance from outside the UK was 1/3 cheaper then my best UK quotation but the UK won the business back 2 years later by undercutting! Since then mine has been stable at around £900.
Rod1
Rod1
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I just love aircraft insurance.
if the risk was actually as high as was made out they wouldn't insure you.
it must be one of the greatest confidence tricks ever foisted on a population.
if the risk was actually as high as was made out they wouldn't insure you.
it must be one of the greatest confidence tricks ever foisted on a population.
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Visicover seems to have shaken the Aircraft insurance tree in the UK which has to be a good thing.
However those of us who have been around a while have seen this happen before when Onrisk burst on to the scene in a blaze of glory only to disappear equally as quickly after a couple of years leaving quite a few people high and dry as I remember.
Not suggestioning for one moment that this will happen again but how do we know that AIG, Visicovers insurer are in the UK GA market for the long haul and will not also disappear form the UK after a couple of years when the claims start rolling in.
I am fully aware of the size of AIG as a global insurer but that does not mean they willl stick around in the UK if/when the figures don't stack up.
However those of us who have been around a while have seen this happen before when Onrisk burst on to the scene in a blaze of glory only to disappear equally as quickly after a couple of years leaving quite a few people high and dry as I remember.
Not suggestioning for one moment that this will happen again but how do we know that AIG, Visicovers insurer are in the UK GA market for the long haul and will not also disappear form the UK after a couple of years when the claims start rolling in.
I am fully aware of the size of AIG as a global insurer but that does not mean they willl stick around in the UK if/when the figures don't stack up.
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I do not know the full circumstances of the demise of OnRisk but I always assumed that the sad death of the company founder must have played a part. I would also contend that AIG, who underwrite the Visicover policies, are a very different beast from the underwriters behind OnRisk, one of whom I believe was based in Northern Cyprus.
The big difference is that the pricing differential on the Visicover model comes from the fact that it is an entirely online service. This provides a radically different cost model from traditional aircraft insurance provision, and it is this which mainly funds competitiveness, not simply rate cutting. Thus the underwriting performance of the book is less at risk.
The big difference is that the pricing differential on the Visicover model comes from the fact that it is an entirely online service. This provides a radically different cost model from traditional aircraft insurance provision, and it is this which mainly funds competitiveness, not simply rate cutting. Thus the underwriting performance of the book is less at risk.
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In the U.S. there is a lot of competition which drives the price down. Technically, more claims mean higher preimum, but there is always a company willing to write a policy for less. The insurers that have been in avation for a long time are waiting for the new kids on the block to finally have so many losses that their low premiums can't make up for it and they're forced out of the sector, but they're sticking around. The thing is these companies(like AIG) are huge and write many different lines of business. They can shift funds between these different segments, and if the overall company loss ratio is positive, they don't worry too much about aviation, which is a very small part of their overall business portfolio.
So to sum it up, your premiums stay the same, because they know the competition will write it for less.
So to sum it up, your premiums stay the same, because they know the competition will write it for less.
