Airline insurers enjoy favourable Q2, thanks to capacity

Notable incidents in Q2 2024 were Korean Air and Singapore Airlines.

The second quarter (Q2 2024) of the year was deemed more favourable for the airline insurance industry, thanks to buyers and capacity.

“Higher rates in recent years coupled with lower average claims have attracted capacity back into the market generating increased competition and pursuit of market share to the detriment of underwriting discipline,” Gallagher Specialty’s “Airline Insurance Market Update Q2 2024” said.

Insurer management is closely monitoring rating adequacy and capital allocation.

Renewal outcomes remain positive, especially for airlines with good loss ratios. However, airlines with higher loss ratios face greater scrutiny. 

Significant personnel movement among insurers has created challenges, but its impact on the market is still uncertain.

Notable incidents in Q2 2024 included a Korean Air B737 MAX 8 pressurisation fault and a turbulence-related fatality on a Singapore Airlines flight. 

With growing turbulence incidents, effective emergency response programs are crucial. The Hull War segment shows price stabilization, whilst AVN52E pricing trends upward. 

The market remains in buyers' favour, with positive renewal outcomes expected in the short term.