Swiss Re Corporate Solutions has confirmed that it undertaking a full review of it’s Australian aviation insurance business, with the industry’s second largest aircraft insurer tipped to exit the general aviation market, seeking to improve profitability.
In 2015 Swiss Re Corporate Solutions acquired it’s aviation business from AssetInsure, adding an additional office in Brisbane, Queensland. Aviation insurance brokers have reported that the insurer has stopped writing new general aviation business and is reviewing the renewals of existing customers moving forward.
Aviation insurance broker, Aaron Stephenson; “the aviation insurance marketplace is going through a dynamic contraction, which is leaving aircraft owners and pilots facing increasing premiums in a less competitive market.”
“General aviation customers are experiencing increases of between 10-25%, with the industry’s remaining insurers indicating that there will be further increases over the next two years.”
“With fewer general aviation insurers available, an aging aircraft fleet, fewer aircraft maintenance facilities and large increases in repair costs, insurers are facing the perfect general aviation storm.”
AOPA Australia Executive Director Benjamin Morgan; “Our industry is facing significant challenges that need both a political and regulatory solution, if we are to successfully reverse the decline.”
“The steep increases in aircraft repair costs over the past 5 years have been driven by aircraft maintenance business closures as a result of excessive regulatory impost, a shortage of skilled employment and aging aircraft challenges.”
“The aircraft maintenance sector is struggling to resource apprentices and qualified engineers, with the industry facing a massive skills shortage as we move into 2020 and beyond.”
“Without engineers, the general aviation community will struggle to keep aircraft airworthy, and more importantly, insurance companies will be unable to economically repair aircraft. This outcome is in play right now, with insurers seeking to exit the general aviation market.”
“Industry, CASA and the Minister need to work together to establish an achievable recovery plan to incentivise skills training, along with providing beneficial tax incentivisation for business, to help stimulate the aircraft maintenance sector – before it’s too late.”