A new report from insurance provider Allianz Commercial says gross written insurance premiums for the aviation sector are projected to reach a 20-year high of more than $8 billion in 2024.
According to the insurance provider, airlines will contribute approximately 35% of the premiums, while general aviation is expected to account for 47%. Allianz says the surge in premiums comes as 2024 air traffic is anticipated to reach a record high—growing by 10.4% year over year, predominantly driven by the Asia-Pacific and North American regions.
The report highlights that most of the value in aviation insurance claims comes from collisions, crashes and issues with defective products, which together account for 85% of total claims. Contributing factors to rising premiums include an increase in aircraft repair costs due to higher labor rates, increased prices for aircraft parts and inflation.
The report also mentions that the transition to next-generation aircraft continues to impact claims especially with engine disassembly and repair costs. Additionally, a growing shortage of aircraft mechanics and less experienced technicians could influence future claims, potentially leading to higher repair costs and increased risk, according to Allianz.
