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Aircraft Insurance Market Size

ID: MRFR//8057-CR | 168 Pages | Author: Swapnil Palwe| February 2022

Many market elements define the Aircraft Insurance Market, reflecting the aviation industry's particular risks and complexity. An important issue is aircraft safety and operating history. Insurance companies evaluate aircraft, operators, and the aviation industry's safety to calculate risk. A solid safety record and strict safety standards frequently result in better insurance terms and prices, whereas a history of mishaps or accidents may increase premiums or restrict coverage.

Aircraft type and purpose greatly affect the Aircraft Insurance Market. Aircraft including commercial airliners, general aviation planes, helicopters, and UAVs have different risk profiles. Insurance underwriters assess aircraft size, purpose (commercial or private), age, and operating qualities. This factor-driven method lets insurers adjust coverage to aircraft type-specific risks.

The aircraft insurance market is heavily influenced by regulations and international aviation standards. Insurance companies regularly monitor airworthiness, maintenance, and other regulatory requirements to ensure operators comply. An operator's dedication to regulatory compliance and surpassing expectations affects insurability, therefore insurers may change coverage conditions.

Economic variables including fuel costs, economic downturns, and global events shape the Aircraft Insurance Market. Economic variations affect aircraft worth, maintenance costs, and aviation activity. Insurance companies actively monitor economic circumstances to change underwriting, pricing, and risk assessments. The aviation industry's economic environment affects premium prices and coverage terms.

Geopolitical factors affect aircraft insurance market risk. Flight operators in geopolitical or high-security areas may have trouble getting insurance. Based on operational environment, geopolitics affect insurers' risk calculations and may result in exclusions or limits. For multinational and cross-border aircraft operations, insurers carefully assess the geopolitical situation to match coverage terms to risks.

Aviation technology affects the Aircraft Insurance Market, creating possibilities and difficulties. New airplane technology like autonomous flying systems and superior avionics may affect risk estimates and coverage. Insurance companies must monitor technology advances to determine their effects on aviation safety, operational standards, and risk management.

Insurance prices and availability in the aircraft insurance market depend on claims experience and loss ratios. Insurance companies study past claims data, including frequency and severity. Insurers' risk perceptions and underwriting processes might change due to catastrophic occurrences, accidents, or claims patterns, affecting premium prices and coverage conditions.

Environmental variables like sustainability and carbon emissions are impacting the Aircraft Insurance Market. As the aviation sector becomes more environmentally aware, insurers may provide coverage or incentives to operators using eco-friendly technology, sustainable aviation fuels, or other green practices. This element indicates the cultural and industrial move toward green operations.

In conclusion, safety records, aircraft types, regulatory compliance, economic situations, geopolitical variables, technical improvements, claims experience, and environmental concerns affect the aviation insurance market. Aviation insurance carriers must manage these complex aspects to appropriately evaluate and underwrite risks. To successfully participate in and contribute to the Aircraft Insurance Market, insurers must adapt to the changing risk environment and connect coverage offers with aviation sector demands.

Covered Aspects:

Report Attribute/Metric Details
Market Size Value In 2023 USD 14.59 Billion
Growth Rate 2.42% (2024-2032)

Global Aircraft Insurance Market Overview

The Aircraft insurance market size was valued at USD 14.59 Billion in 2023. The aircraft insurance industry is projected to grow from USD 14.995602 Billion in 2024 to USD 18.17 Billion by 2032, exhibiting a compound annual growth rate (CAGR) of 2.42% during the forecast period (2024 - 2032). Increasing use of drones, strict government regulations to ensure passenger safety, and enhanced government investments in several countries for the development of new airports and renovation of the existing ones are the key market drivers enhancing the market growth.

Aircraft Insurance Market

Source Secondary Research, Primary Research, MRFR Database and Analyst Review

Aircraft Insurance Market Trends

Increasing airports and the thriving aviation industry are driving the market growth.

Market CAGR for aircraft insurance is driven by the growing number of airports worldwide. In recent years, there has been substantial growth in the number of passengers choosing to take flight. To meet this increased demand, both emerging and developing countries are modernizing and expanding existing airport terminals and constructing new ones. The growing investment in technology and expansion of smart airports that use various automated solutions is also helping to drive market growth. As the demand for aviation fueling and group handling grows, aviation product liabilities will likely rise, driving insurance service requests. Increased space exploration activities using drones, spaceships, and aircraft drive market growth. Insurance buyers safeguard themselves and their equipment from accidents and destruction caused by climate change, equipment failure, and collisions that positively impact the aircraft insurance market revenue.

Additionally, an increasing number of people have chosen to travel by plane, accelerating the growth of this market. Over the last few years, the number of people flying worldwide has increased. air passenger traffic has increased due to increased economic activity, demand for travel and tourism, urbanization, and ease of travel. Line maintenance will be in high demand in the coming years as a result of this. According to the IATA (International Air Transport Association), China will overtake the US as the world's most extensive passenger carrier by the end of 2024. China is expected to add 817 million passengers, bringing the total number of air passengers to 1.3 billion. This will aid the growth of the aviation insurance market during the forecast period. The growth of aviation insurance is expected to be driven by an increase in passenger air traffic and air freight volume, a positive outlook for the commercial aviation industry, and a growing demand for the number of low-cost carriers (LCCs).

In addition, emerging countries are creating and extending their current airport terminals to meet the growing demand for airline services. As a result, huge airport expansion, which includes automated baggage handling and self-check-ins, is taking place. Increased spending on overseas travel and vacations is also attracting more airline consumers. Climate change, equipment failure, and collisions are some factors that can cause accidents and harm to people and their equipment during air travel, which is expected to further boost the aircraft insurance market revenue.

Aircraft Insurance Market Segment Insights

Aircraft Insurance Type Insights

The aircraft insurance market segmentation, based on type, includes public liability insurance, passenger liability insurance, ground risk hull (motion) insurance, combined single limit (CSL), ground risk hull (non-motion) insurance, in-flight insurance, hangar & ground support equipment insurance, and umbrella insurance. The passenger liability insurance segment dominated the market, accounting for 35% of market revenue (5.11 Billion). In developing economies, category growth is driven as passenger liability insurance covers passengers harmed due to an accident that occurs during their flight. In many nations throughout the world, this is a legal requirement. However, public liability insurance is the fastest-growing category as it provides coverage for third-party entities and property damage.

Aircraft Insurance Application Insights

The aircraft insurance market segmentation, based on application, includes commercial aviation and business & general aviation. The commercial aviation category generated the most income (70.4%) due to the increased development of commercial aircraft to accommodate the rising air passenger traffic. However, business & general aviation is the fastest-growing category due to the rising adoption of business aircraft by private companies to reduce travel time.

Figure 1: Aircraft Insurance Market, by Application, 2022 & 2032 (USD Billion)

Aircraft Insurance Market, by Application, 2022 & 2032

Source Secondary Research, Primary Research, MRFR Database and Analyst Review

Aircraft Insurance End-User Insights

The aircraft insurance market segmentation, based on end-user, includes airlines, airports, aircraft product manufacturers, leasing companies, ground operators, individual general aviation aircraft operators, air taxi operators, corporate aircraft operators & owners, and maintenance, repair & overhaul (MRO) companies. The airlines category generated the most income, growing air passenger traffic and growth of the aviation industry. However, airports are the fastest-growing category due to increased airport renovation initiatives and the high cost of developing airports.

Aircraft Insurance Regional Insights

By region, the study delivers market insights into North America, Europe, Asia-Pacific and the Rest of the World. The North American aircraft insurance market will dominate this market, owing to increased government investment in R&D, and the procurement of enhanced fighter jets, helicopters, transport, and trainer aircraft will boost the market growth in this region. Further, the German aircraft insurance market held the largest market share, and the UK aircraft insurance market was the fastest-growing market in the North American region.

Further, the major countries studied in the market report are The US, Canada, German, France, the UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil.



Source Secondary Research, Primary Research, MRFR Database and Analyst Review

Europe's aircraft insurance market accounts for the second-largest market share due to the introduction of next-generation aircraft and the launch of new air routes are helping to fuel the market growth in this region. Further, the German aircraft insurance market held the largest market share, and the UK aircraft insurance market was the fastest-growing market in the European region.

The Asia-Pacific aircraft insurance market is expected to grow at the fastest CAGR from 2023 to 2032. This is due to huge government investments in infrastructural development activities, and stringent regulations regarding air travel safety will boost market growth in this region. Moreover, China’s aircraft insurance market held the largest market share, and the Indian aircraft insurance market was the fastest-growing market in the Asia-Pacific region.

Aircraft Insurance Key Market Players & Competitive Insights

Leading market players are investing heavily in research and development in order to expand their product lines, which will help the aircraft insurance market grow even more. Market participants are also undertaking numerous strategic activities to expand their footprint, with important market developments including contractual agreements, new product launches, mergers and acquisitions, higher investments, and collaboration with other organizations. To expand and survive in a more competitive and rising market climate, the aircraft insurance industry must offer cost-effective items.

Manufacturing locally to minimize operational costs is one of the key business tactics used by manufacturers in the aircraft insurance industry to benefit clients and increase the market sector. Major players in the aircraft insurance market, including Ace Aviation, American Financial Group Inc., American International Group Inc., Aon plc, Arthur J. Gallagher and Co., and others, are attempting to increase market demand by investing in research and development operations.

USAA is a diversified financial services firm that offers services in the fields of insurance, banking, investments, real estate, and retirement. It offers insurance products for auto, home and property, life, rental home, health, long-term care, umbrella, motor vehicle, travel, and small business. It also offers annuities, checking accounts, savings accounts, certificates of deposits, credit cards, mortgage loans, auto loans, personal loans, mutual funds, stocks and options, exchange-traded funds, and other investment products. The company provides car and home-buying services, real estate services, financial planning services, and retirement planning services. It delivers these products and services to individuals in the army, marines, air force, navy, and coast guard. In April 2021, members of USAA showed interest in behavior and usage-based insurance. USAA announced the expansion of SafePilot in ten states to meet rising demand. The USAA SafePilot app teaches, encourages, and rewards smart driving habits, helping drivers to stay safe on the road while lowering their insurance premiums.

SkyWatch Technologies, Inc. provides software solutions. The Company offers a data analytics forum that empowers drone providers and fleet managers to follow their security metrics and decrease flight risks preflight, in-flight, and post-flight. SkyWatch Technologies serves customers in the State of California. In November 2021, SkyWatch announced the debut of a usage-based insurance solution for hired light aircraft, with options for yearly, monthly, weekly, and daily coverage. Aerospace, Inc., a provider of aviation insurance and Risk Management solutions for the flight and aerospace industries, is collaborating on the launch.

Key Companies in the Aircraft Insurance market include

  • Ace Aviation

  • American Financial Group Inc.

  • American International Group Inc.

  • Aon plc

  • Arthur J. Gallagher and Co.

  • AXA Group

  • Berkshire Hathaway Inc.

  • BWI Aviation Insurance Agency Inc.

  • Chubb Ltd.

  • Aerospace Underwriting Managers Ltd.

  • Hallmark Financial Services Inc.

  • London Aviation Underwriters Inc.

  • Marsh and McLennan Companies Inc.

  • Munich Reinsurance Co.

  • Starr International Co. Inc.

Aircraft Insurance Industry Developments

For Instance, December 2021 The ERS Group-backed Lloyd's specialist reinsurer IQUW announced the establishment of a new aircraft portfolio led by an experienced Marsh and Cincinnati underwriter.

Aircraft Insurance Market Segmentation

Aircraft Insurance Type Outlook

  • 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

Aircraft Insurance Application Outlook

  • Commercial Aviation

  • Business & General Aviation

Aircraft Insurance End-User Outlook

  • Airlines

  • Airports

  • Aircraft Product Manufacturers

  • Leasing Companies

  • Ground Operators

  • Individual General Aviation Aircraft Operators

  • Air Taxi Operators

  • Corporate Aircraft Operators & Owners

  • Maintenance, Repair & Overhaul (MRO) Companies

Aircraft Insurance Regional Outlook

  • North America

    • US

    • Canada

  • Europe

    • Germany

    • France

    • UK

    • Italy

    • Spain

    • Rest of Europe

  • Asia-Pacific

    • China

    • Japan

    • India

    • Australia

    • South Korea

    • Australia

    • Rest of Asia-Pacific

  • Rest of the World

    • Middle East

    • Africa

    • Latin America

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