Jan 2021, Research Report on the Global Aircraft Insurance Market.
Aircraft insurance market is projected to register a CAGR of 2.78% between 2021 and 2027. Aircraft insurance, sometimes also referred to as aviation insurance, can be defined as the insurance cover against claims and losses that arise out of ownership, operation and maintenance of aircrafts. Aircraft insurers offer a wide range of aircraft insurance policies for covering various damages/losses suffered by the insured airlines/airline operators.
The growing air passenger traffic, stringent government regulations pertaining to aircraft and passenger safety, development of new airports, and high cost of aircraft repair are primarily driving the growth of the global aircraft insurance market. Flight safety has become an even more important matter of concern over the past decade among the airlines, owing to the occurrence of several fatal airline mishaps, including Air France Flight 447 (June 2009), Malaysia Airlines Flight 370 (March 2014), and Indonesia AirAsia Flight QZ8501 (December 2014), in the recent past.
The airlines have been working in collaboration with the aviation agencies and safety authorities on new safety standards towards increasing aircraft safety and reliability. Besides the latest safety standards, the integration of hardware and software solutions and techniques for remote monitoring of aircraft to promptly deal with any potential concerns helps ensure a reliable and safe journey for air passengers. Furthermore, the airline operators are also focusing on insurance programs to cover any kind of damage and financial loss.
Aviation insurance can be broadly categorized into three types—hull insurance, passenger legal liability, and third-party liability. The hull insurance is for the aircraft itself, while the passenger's legal liability is for providing insurance coverage to onboard passengers if they get harmed or injured. Third-party liability covers the losses/damage caused while the aircraft is in operation, such as an event where it crashes down on the ground. Thus, the global aircraft insurance market is expected to grow significantly during the forecast period.
Rising Frequency and Cost of Insurance Claims
By End User
The airlines segment accounted for a dominant market share in 2020: The airlines segment held a dominant share in the global aircraft insurance market in 2020. This kind of insurance covers the risks associated with all types of airline operators. The insurance coverage includes all cargo & passenger airlines classes, ranging from a single aircraft to large airline fleets.
The airports segment held a significant market share in 2020: The airports segment accounted for a considerable market share in 2020. It provides insurance coverage for risks associated with losses/damages arising from day-to-day operations at airports. Since there are different kinds of airports with varying operations, there are various airport insurance programs for each type of airport.
The aircraft product manufacturers segment is forecasted to grow considerably during the forecast period: The aircraft product manufacturers segment is expected to register a significant growth during the review period. This kind of insurance coverage is for manufacturers of aircraft & aircraft components. The insurance covers any liabilities because of the accidents involving products/services of the concerned aircraft manufacturer.
The leasing companies’ segment is forecasted to grow at the fastest rate during the forecast period: The leasing companies segment is expected to grow considerably, registering the highest CAGR, in the coming years during the forecast period. Much of this can be attributed to the insurance coverage of a wide range of risks associated with aircraft leased by the companies under such kind of insurance plan. The insurance coverage includes dry (including aircraft without crew, ground staff, and others) and wet lease (including aircraft crew, maintenance, and ground staff).
The ground operators segment held a small market share in 2020: The ground operators segment accounted for a small market share in 2020. This includes insurance coverage for personnel associated with air traffic control, aircraft cleaning, aircraft fueling, among other ground operators.
The individual general aviation aircraft operators’ segment is expected to grow significantly during the review period: The individual general aviation aircraft operators is forecasted to grow at a considerable rate in the coming years during the forecast period. The insurance also covers the risks and vulnerabilities of individual general aviation aircraft operators against terrorist activities. Individual general aviation airports are vulnerable and are prone to potential terrorist attacks.
The air taxi operators’ segment is forecasted to grow considerably during the forecast period: The air taxi operators segment is expected to grow at a considerable rate during the forecast period. This kind of insurance coverage is for operators of aircraft operating on-demand basis, usually with 30 or fewer passengers. It includes liability coverage for third-party bodily injuries or fatalities, excluding passengers inside.
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The corporate aircraft operators and owners segment held a significant market share in 2020: The corporate aircraft operators and owners segment accounted for a considerable market share in 2020. This includes insurance programs to mitigate risks and avoid financial damages/losses for operators and owners of corporate aircraft.
The maintenance, repair & overhaul (MRO) companies segment accounted for a considerable market share in 2020: The maintenance, repair & overhaul (MRO) companies segment held a considerable market share in 2020. Much of this can be ascribed to the increasing demand for insurance covers pertaining to the wide range of risks, particularly liability to third parties if their aircraft get damaged while they are in the care of MRO companies.
The commercial aviation segment accounted for a majority share in the market in 2020: The commercial aviation segment held a majority share in the global aircraft insurance market. Much of this can be attributed to growing commercial aviation industry and the risks associated with commercial aviation operation and maintenance.
The business & general aviation segment is forecasted to grow at a significant rate during the forecast period: The business & general aviation segment is expected to grow significantly in the coming years during the forecast period. This kind of aircraft insurance covers all sorts of risks associated with business & general aviation and includes insurance coverage for private single aircraft, business aircraft, and commercial airline fleets.
Key Players Operating in the Global Aircraft Insurance Market: