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1、A business of Marsh McLennanGeneral insurance market benchmarking:Aviation insurance market overviewQ3 2023November 20231.Executive summary 2.Airline insurance London market overview-Q3 airline premium development-Airline market capacity-Airline losses3.Aerospace insurance London market overview-Q3

2、aerospace premium development-Aerospace market capacity4.General aviation insurance London market overview-Q3 general aviation premium development-General aviation market capacity5.Hull War and AVN52 commentary6.ReinsuranceContentsExecutive summaryAs we exit the third quarter of 2023,reinsurance cos

3、ts continue to increase,fueled by the retro market.In most cases,the increases are not passed on to insureds,but rather insurers are absorbing much of the costs.High inflation is impacting operating costs for insureds across the aviation industry,adversely affecting the value of attritional losses.A

4、t an operational level,competition to hire and retain experienced staff continues to impact the post-pandemic return to service.To counter this,during the third quarter,several airlines further invested in crew training via new academies and bursary schemes to better manage operational and people ri

5、sks.Orders for new airframes remain buoyant;however,some original equipment manufacturers(OEMs)still face challenges in meeting demand.It is difficult to predict with certainty how macro factors may affect the industry in the fourth quarter of 2023 and beyond.We will be by your side with the capabil

6、ities and skillset to support you through the challenges and opportunities ahead.Garrett HanrahanGlobal Head,Aviation&SpaceExecutive summaryAirline insurance London market overviewAirline insurance London market overviewFactors impacting the London airline insurance market heading into Q4 2023Consid

7、erations for airline insurers in Q3 2023Globally,rising exposures generally remain strong despite increasing costs of airfares,which is contributing to inflated market premium levels following previous rate increases.An increase in flights and passenger numbers is also impacting the number of attrit

8、ional losses advised to the market.Increasing attritional losses are equally influenced by inflation of OEM repairs and the rising cost of spare parts,raising the associated claims paid by some insurers.Meanwhile,there is a continued focus on the development of,and deterioration in,historical losses

9、 and the impact on underwriting performance,as loss inflation and rising liability awards continue to influence the total cost of risk.Losses emanating from the Russia-Ukraine war remain somewhat unresolved despite some reported developments around out of court settlements.The sentiment remains that

10、 any significant claim will likely take much longer to be settled by the market than previously thought.Premium and potential loss developmentMost direct insurers have now completed their treaty reinsurance program renewals,indicating continued premium increases.The retrocession(retro)insurance mark

11、et that reinsures the reinsurance market has significantly reduced available capacity thereby restricting the appetite and flexibility of several aviation reinsurers.Despite increased costs,overall the direct market continues to show a desire to increase market share,leading to greater competition.I

12、n the third quarter,some instability persists around airline insurance market conditions.Volatile financial markets and somewhat unpredictable bond and interest rates could be influencing market appetite.Inflationary pressures continue to cause challenges for organizations with some insurers attriti

13、onal loss ratios subsequently influenced.Competition to hire and retain experienced staff,including pilots and aircrew,continues to impact the return to service post-pandemic,and is adding to:Global supply chain pressures.Human capital risk.Influencing factors Despite some uncertainty surrounding lo

14、sses and reinsurance costs,overall the airline insurance market is showing a continued desire to compete for market share.Excess capacity is being observed among existing insurers and in most cases they are adjusting pricing to seek greater market share.However,it remains a somewhat divided market a

15、nd rating conditions are largely split.It appears that some want to maintain technical ratings in principle,while others seek to attract price-sensitive buyers.As a result,there is competition among insurers,resulting in improved results for the majority of placements.In general,underwriters remain

16、sensitive to further losses,but recent developments in the Hull War market indicate that after two years of increases,the annual premium is approaching a level that appears to be encouraging new capacity to re-join the marketplace.With new capacity developing,rating increases appear to be reducing.S

17、imilarly,the Excess AVN52 market appears to be stabilizing.While still somewhat limited,there appears to be sufficient capacity to be confident that larger limits can be achieved.Capacity and competitionQ3 airline premium development78Airlines Premium change analysisAdditional market considerationsI

18、ncreasing reinsurance cost.Losses emanating from the Russia-Ukraine conflict remain somewhat unresolved.There is a growing sense that any significant claim may take much longer to be settled by the market than previously thought.Rising attritional losses as fleets return to pre-COVID-19 levels,but w

19、ith somewhat less experienced staff.Competition is developing between aviation insurers to increase their market share.Pressure is on lead insurers to stay in touch with rating terms and conditions of following markets.Key rating factors Insured safety record and loss history.Geographical risk.Aircr

20、aft,passenger,and departure exposure movement.Limits of liability purchased.Source:Marsh Specialty and Global Placement2.34%17.90%7.01%9.93%-10%-5%0%5%10%15%20%25%30%21 Q422 Q122 Q222 Q322 Q423 Q123 Q223 Q3Weighted average changeMean average changeWeighted average rolling four quartersMean average r

21、olling four quartersAirline market capacityAirline insurance market overview Potential maximum London line size based on a clean loss experience non-US major passenger airline with US$2 billion combined single limitNote:QBE US has US$100m capacity to write airlines=100 seats.Subject to maximum Hull

22、limits.+Requires home state exemption or fronting by a licensed insurance company or a captive.Source:Marshs interpretation and understanding of the market.N.B.Line sizes are estimates only and should only be taken as a guide.Markets reserve the right to decline a risk or to deploy their capacity in

23、 line with their individual risk appetites.Q3 2023available capacity267.76%267.76%Q3 2023 capacity remained the same.Q2 2023available capacity267.76%267.76%London124.10%Rest of the world100.50%Lloyds 43.16%Lloyds Rest of the worldApollo2.50%ADNIC2.50%Atrium2.50%Africa Re2.00%Beazley6.66%Axis5.00%Lan

24、cashire2.50%GIC5.00%Chaucer3.00%Elseco7.00%Sompo6.00%Helvetia5.00%Faraday3.50%HDI5.00%IQUW3.50%IRB+2.00%Tokio Marine Kiln10.00%LRA15.00%Travelers3.00%Mapfre2.00%Total43.16%Misr*1.00%Munich Re10.00%LondonNational Insurance Co2.50%AIG15.00%New India+3.00%Allianz10.00%Oriental2.00%AXA XL15.00%Partner R

25、e3.50%Convex12.50%Ping An1.50%Chubb12.50%Rokstone5.00%CV Starr12.50%Sirius International2.50%Everest Re7.50%Sukoon3.00%Global Aerospace12.50%Swiss Re10.00%Hive5.00%Tokio1.00%Liberty Mutual5.00%Tokio HCC5.00%Nexus9.00%Total100.50%Fidelis7.60%Total124.10%Available capacity267.76%Airline insurance mark

26、et overview Potential maximum London line size based on a clean loss experience US major passenger airline with US$2 billion combined single limitQ3 2023available capacity211%211%Q3 2023 capacity remained the same.Q2 2023available capacity211%211%Note:QBE US has US$100m capacity to write airlines US

27、$10m(US$m)Sum of lossesUS$10m(US$m)Average10 recent major losses in excess of US$10 million5-year comparison13Major loss analysis recent losses in excess of US$10 millionUS$544m five-year averageSource:CiriumNote:Including airline hull,airline liability and product liability losses.Ciriums loss info

28、rmation is derived from a number of sources and may not reflect the latest reserving or final settlement figures.Date of loss OperatorAircraft typeLocationFatalitiesLoss typeAccident category09-07-2023Air Canada777-300ERCanada0Major PartialAll Risk04-05-2023LATAM Airlines Chile787-800Colombia0Major

29、PartialAll Risk18-04-2023BADR Airlines737-800Sudan0Total LossWar Risk15-04-2023Sun Air Aviation737-800Sudan0Total LossWar Risk15-04-2023SaudiaA330-300ESudan0Total LossWar Risk06-02-2023Coulson Aviation737-300Australia0Total LossAll Risk30-11-2022Air Canada777-300ERArgentina0Major PartialAll Risk18-1

30、1-2022LATAM Airlines ChileA320-200N neoPeru2Total LossAll Risk23-10-2022Korean AirA330-300Philippines0Total LossAll Risk25-09-2022Copa Airlines737-800Panama0Major PartialAll RiskAerospace insurance London market overviewAerospace insurance London market overview15Considerations for aerospace insurer

31、s in Q3 2023Familiar risks remain a concern.For many aerospace organizations,pervading market conditions are beginning to look more favorable,but uncertainty remains due to several macro factors,including geopolitical risk.Areas of concern include:Fluctuations in fuel price and availability,which ma

32、y impact profitability and operational efficiency.Talent shortages and skill gaps,particularly in areas such as engineering and advanced manufacturing.Global supply chain pressures.Regulatory changes and compliance requirements,particularly related to environmental and safety standards.Ambition meet

33、s reality.The aerospace insurance market is experiencing mixed messaging from insurers in the third quarter.While some insurers acknowledge that certain sub-classes have reached a point of rating adequacy following a period of premium increases,others appear to be struggling with poor performing sub

34、-classes and major losses that are impacting underwriting profitability.Overall,inflation and an increased cost base are also contributing to a drag on combined ratios and profitability.However,capacity remains plentiful in the market.The dilemma for some insurers seems to be that for well-performin

35、g risks,underwriters seeking premium increases are forcing organizations to consider continuity versus commercial decisions,which can have more unpredictable results.Stability remains in Q3,but reinsurance season is on the horizon.In most sub-classes,the rating environment remains stable.While expos

36、ures continue to grow as the industry develops,competition among insurers is generally guarding against premium increases.Some insurers appear to be focused on growing revenue through increased participation and line structure,rather than premium increases and potentially losing business altogether.

37、There appears to be an increased focus on emerging technology.In what was arguably a very limited market previously,generally there is now a greater level of open-mindedness and acknowledgment that insurance has a key role to play in helping the aviation industry meet its sustainability goals.Indust

38、ry factorsChallenges facing insurersCurrent status of marketAcutely impacted sub-classesStability returning to contingent risk,Hull War,and Aviation War liability(AVN52)While capacity withdrawals and rating instability has not yet fully subsided for the contingent,Hull War,and AVN52 sub-classes,ther

39、e are signs that some stability may be returning to the markets.Some lessors have reportedly received partial payments from operators in respect of confiscated aircraft emanating from the Russia-Ukraine war.Although a major claim remains a possibility,generally appetite in the contingent risk market

40、 has not collapsed in the way that the market previously thought possible.Despite challenges,there are some new entrants into the AVN52 market,such as Allianz partnering with Hive*,which is helping to maintain capacity.*As advised by insurers to Marsh.Factors impacting the London aerospace insurance

41、 market heading into Q4 2023Q3 aerospace premium development17Air navigation service providers(ANSP)and airport operatorsKey rating factorsLimit of liability.Quantum of passenger numbers and aircraft movements.Scope of responsibility of the airport vs.third parties.Whether airport handles direct fli

42、ghts to the US.Types of aircraft regularly operating.Loss history,especially attritional losses.Additional market considerationsRegarded as a core part of the aerospace insurers book.Although the trend to write airport liability risks on a 100%basis has somewhat reduced,this class suits capacity agg

43、regating facilities.Social inflation is impacting“slip and trip”claims,which are a feature of many airport placements.Significant cross-class exposures may suit a consolidated approach to insurer selection.Airport operatorsKey rating factorsLimit of liability.Frequency of takeoffs and landings.Air t

44、raffic density.Flight paths being handled.Staff training and welfare.Loss history,including near miss data.Additional market considerationsGood historical loss history with some major historical exceptions.Exposure is viewed as catastrophic rather than attritional.Social inflation and increasing lia

45、bility settlements have somewhat tempered market appetite.Combination of multi-and single-year deals mean rating can be volatile.Can become“capacity risks”when very large limits of liability required.ANSPsSource:Marsh Specialty and Global PlacementPremium change analysis1.27%4.30%5.48%10.31%-10%0%10

46、%20%30%40%50%21 Q422 Q122 Q222 Q322 Q423 Q123 Q223 Q3Weighted average changeMean average changeWeighted average rolling four quartersMean average rolling four quarters18Component part manufacturersPremium change analysisSource:Marsh Specialty and Global PlacementKey rating factorsCriticality of comp

47、onent parts produced.Limit of liability.Annual turnover.Contractual indemnities in place.Proportion of commercial vs.military sales,fixed vs.rotor wing sales,and direct US sales.Amount of legacy and past production.Additional market considerationsAn attractive sub-class among aviation insurers.Histo

48、rically good loss records and profitability.Potential impact of sanctions.Insurers will require a full breakdown of sales per territory.Many clients carry a significant self-insured retention(SIR).Well-suited to capacity aggregating facilities and single insurer solutions.0.48%7.67%2.08%11.18%-30%-2

49、0%-10%0%10%20%30%40%50%21 Q422 Q122 Q222 Q322 Q423 Q123 Q223 Q3Weighted average changeMean average changeWeighted average rolling four quartersMean average rolling four quarters19Maintenance,repair,and overhaul(MRO)Premium change analysisSource:Marsh Specialty and Global PlacementKey rating factorsL

50、imit of liability.Highest value of any one aircraft in care,custody,or control(CCC)of the insured.Total value of aircraft in CCC of the insured.Turnover.Level of maintenance.Loss history.Additional market considerationsAppetite can vary significantly in different geographical territories.Risk manage

51、ment is key including:Contractual protections.Clear internal processes and procedures.Staff retention.Significant historical losses.Unlikely to fit a capacity aggregating facility or single insurer solution.4.99%7.83%7.17%13.78%-10%0%10%20%30%40%50%21 Q422 Q122 Q222 Q322 Q423 Q123 Q223 Q3Weighted av

52、erage changeMean average changeWeighted average rolling four quartersMean average rolling four quarters20Aviation refuellersPremium change analysisSource:Marsh Specialty and Global PlacementKey rating factorsLimit of liability.Fuel throughput.Nature of operation,supply only,storage,or into-plane.Whe

53、ther organization is signatory to a Tarbox agreement.Geographical split of operations.Loss history.Additional market considerationsGood historical loss history.Significant competition among insurers.Insurers express view that premium base vs.capacity deployed is inadequate.Disproportionately large i

54、ncreases observed for smaller operators.Well suited to 100%solutions and/or capacity aggregating facilities.9.99%7.60%1.47%18.46%-10%0%10%20%30%40%50%21 Q422 Q122 Q222 Q322 Q423 Q123 Q223 Q3Weighted average changeMean average changeWeighted average rolling four quartersMean average rolling four quar

55、ters21Major manufacturers and OEMsPremium change analysisSource:Marsh Specialty and Global PlacementAdditional market considerationsHigh premium volumes.Long-tail exposure.Significant historical losses.Complex placements with a variety of ancillary coverages included.Likely to be“Schedule C”requirin

56、g insurers to obtain reinsurers agreement to write a share.Key rating factors Limit of liability purchased and any SIR.Annual turnover.Criticality of the product and/or type of aircraft manufactured.Split between military and civil manufacturing.Past production/number of units in circulation.Quantum

57、 of hull exposure during production.Aggregation of hull exposure during COVID-19.Loss history.-1.13%0.76%9.10%4.67%-20%-10%0%10%20%30%40%50%21 Q422 Q122 Q222 Q322 Q423 Q123 Q223 Q3Weighted average changeMean average changeWeighted average rolling four quartersMean average rolling four quarters223.10

58、%36.03%5.46%9.76%-30%-20%-10%0%10%20%30%40%50%21 Q422 Q122 Q222 Q322 Q423 Q123 Q223 Q3Weighted average changeMean average changeWeighted average rolling four quartersMean average rolling four quartersAviation ground handlersPremium change analysisSource:Marsh Specialty and Global PlacementKey rating

59、 factorsLoss history.Level of SIR.Presence of IATA agreements.Number of flights handled per year.Type of aircraft being serviced.Geographical range of airport locations.Staff training and retention.Limit of liability.Additional market considerationsGround handlers often experience a high level of re

60、latively low value“attritional losses”.Such losses can erode the premium base year-on-year and create a large workload in terms of claims administration.To mitigate these factors many ground handlers opt for a large,aggregated SIR.SIR removes the need to collect attritional losses from the insurance

61、 market saving both administrative costs and premium paid to the insurance market.Article 8 of the IATA Standard Ground Handling Agreement limits the liability of the handling agent to the airline in respect of damage to aircraft.For many insurers,this is a prerequisite for offering coverage.Large l

62、oss on a single account drives this spike23Premium change analysisSource:Marsh Specialty and Global PlacementKey rating factorsNature and scale of activities undertaken.Proximity to aircraft.Staff training.Risk management protocols in place.Contractual indemnities.Loss history.Limit of liability.Add

63、itional market considerationsBroad range of ancillary aviation activities.Services and supply chains are often interconnected and overlapping.Direct comparison between services is difficult,so we have included these risks under the banner“other service providers”.Other service providers(All other an

64、cillary services to the aviation industry)1.91%12.37%6.03%22.65%-10%0%10%20%30%40%50%21 Q422 Q122 Q222 Q322 Q423 Q123 Q223 Q3Weighted average changeMean average changeWeighted average rolling four quartersMean average rolling four quartersAerospace market capacity25Aerospace London market capacityAi

65、rportMROATCGround handlerLessorsComponent manufacturerRefuellerMajor manufacturerOther service providersMaximum capacityRealistic competitivecapacityAppetite and realistic capacity varies.Although capacity is available in the aerospace insurance market,appetite varies significantly across each sub-c

66、lass.Where large limits are required and/or there is limited appetite among insurers,a squeeze on capacity can occur,adding complexity and potentially cost to the renewal process.Capacity overview is in respect of primary liability placements.We are seeing a significant capacity contraction in:-Hull

67、 War-AVN52-Contingent Hull and Liability.Source:Marsh Specialty and Global PlacementGeneral aviationinsurance London market overviewGeneral aviation insurance London market overviewFactors impacting the London general aviation insurance market heading into Q4 2023Overall,the All Risks market has rem

68、ained stable during Q3 with as before rating achievable on accounts without claims.Geopolitical risk is generally leading to Hull War insurers pushing for premium increases.The drive for premium growth continues following major losses emanating from the Russia-Ukraine war.The Hull War sector continu

69、es to seek increases upwards of+50%,with some coverage also restricted to mitigate aggregated exposure in certain regions.In addition to Hull War losses,major losses in alternate aviation product lines,such as aerospace,are somewhat impacting the general aviation market.Premium and potential loss de

70、velopmentLosses emanating from the Russia-Ukraine war remain somewhat unresolved,and therefore,uncertainty remains in the market.The uncertain economic outlook in the wider financial markets is also a factor to consider,as a volatile environment can impact new market capacity.Widespread inflationary

71、 pressures are causing ongoing challenges for most general aviation operators and insurers.Claims inflation can heavily influence insurers attritional loss ratios and increase cost of business.The retrocession insurance market that reinsures the reinsurance market has significantly reduced available

72、 capacity,thereby restricting the appetite and flexibility of several aviation reinsurers.Despite increased costs,overall,the direct market continues to demonstrate a desire to increase market share,leading to greater competition.Influencing factors Capacity and competition continues to vary within

73、the All Risks and Hull War markets.This is creating somewhat of a split in rating conditions within each marketplace.Broadly,in Q3,capacity continues to grow in the general aviation market,with line sizes increasing and the addition of new entrants,creating a downward pressure on rates.Increased cap

74、acity could continue counteracting the reinsurance costs faced by insurers as treaty renewals begin to take place.While capacity is beginning to rise in the Hull War and Excess AVN52 markets,Q3 follows the trend of rate increases.This is largely a result of competition in the general aviation Hull W

75、ar market remaining low and some insurers capacity being restricted.Capacity and competitionConsiderations for general aviation insurers in Q3 2023Q3 general aviation premium development29General aviationGraph commentaryTo date in 2023 the trend of premium increases has dropped off.Q1 2023 saw an in

76、itial period of higher premiums with some insurers looking for rate increases.Hull War and AVN52 markets have maintained at least+50%increases throughout the year.Generally,there has been a rise in capacity and insurers looking to grow their lines in Q2 and Q3,which has somewhat controlled increases

77、 in the All Risks market,with reductions available in some instances.During Q2 and Q3,accounts that witnessed increases were typically loss active or presented significant Hull War exposure.Key rating factors Limit of liability purchased and any self-insured retention.Aircraft type.Overall fleet val

78、ue and size.Geographic area of operation and aggregation of hull exposure.Business operation.Loss history.Companys operating model and safety record.Premium change analysisSource:Marsh Specialty and Global Placement5.82%-1.07%3.38%5.89%-20%-15%-10%-5%0%5%10%15%20%25%21 Q422 Q122 Q222 Q322 Q423 Q123

79、Q223 Q3Weighted average changeMean average changeWeighted average rolling four quartersMean average rolling four quartersGeneral aviation market capacity31Market capacityKey capacity deployment driversHull and liability limits.Aircraft type.Operation type.Area of operation.Pilot experience and age.O

80、perators loss history.Use of aircraft.Key factors to considerRisks are multi-faceted and there are a number of components insurers will consider before deploying capacity.New entrants into the market have provided an injection of available capacity.This graph reflects capacity surrounding Hull and L

81、iability coverages.With regards to Hull War,anumber of markets have looked to minimize exposure by reducing capacity.General aviation market capacitySource:Marsh Specialty and Global Placement0%50%100%150%200%250%300%US$0US$100US$200US$300US$400US$500US$600Rotor wing blue chipFixed wing blue chipSma

82、ll to mediummixed fleetCargo operatorSmall business jet fleetGeneral aviation capacity(US$m)Liability LimitCapacityHull War and AVN52 commentary33The changing Hull War market*33With access to additional data,markets are increasingly able to differentiate based on:DomicileRoute networkHull aggregates

83、Loss record*As advised by insurers to Marsh.Generally,the market is still constricted by previous reductions in capacity2022/23 leavers ADNICChaucerPICCTalbotIncreased selectivityReduced capacityAIG StarrAxa XLHowever,increasing premium rates are encouraging capacity from new entrantsAllianzApolloEv

84、erestSompoArk/NOAAscot34The changing Excess AVN52 market*34*As advised by insurers to Marsh.Capacity restricted marketPricing driven by capacity availability.Rising reinsurance costsInsurers having to purchase standalone reinsurance policies.Rising rating and premium Insurers seeking rate and premiu

85、m increases irrespective of exposure changes.AVN52 market Pressure on Excess AVN52 pointsReduction in primary excess points to US$350m.Insurer movement towards excess basis rather than difference between.Reduced capacityReduced shares/leavers AXA XL AIG AXIS Inigo Lancashire Partner Re PICC Sompo Ne

86、w entrants Allianz in collaboration with Hive35Factors impacting the Hull War market:Additional pressure on reducing coverage.Market losses.Russia-Ukraine war aircraft lessors.Reinsurance costs.Limited capacity.Several total losses emanating from the civil war in Sudan.Hull War exposureAVN52 exposur

87、eThe changing Hull War and AVN52 market*2023In 2022,underwriters were seeking rating increases up to 100%20222021202120222023Hull WarCapacityUnstableRateSignificant increasePremiumSignificant increaseExcess AVN52CapacityUncertain and fragileRateSignificant increasePremiumSignificant increaseIn 2023,

88、underwriters are seeking rating increases up to 50-75%In 2021,underwriters were seeking rating increases up to 0%-10%In 2021,underwriters were seeking rating increases up to 0%-10%In 2022,underwriters were seeking rating increases up to 50%In 2023,underwriters are seeking rating increases up to 100%

89、Current market conditionsRating movement in comparison to 2021 rates*As advised by insurers to Marsh.Reinsurance 37Aviation reinsurance market trendsMaintain retentions to a level of US$250m original insured loss.Some markets opt for higher attachment levels.Vertical limit remains under scrutiny on

90、some purchases and prices driving some change.Absence of dropdowns for non-ABC or general aviation,and specific focus on US exposures.General aviation specifics remain under consideration,however few changes to date.Some limiting of sideways cover,e.g.,from three to two reinstatements on lower layer

91、s.Reinsurance market pushing for structural and coverage changes on direct policies.From July 1 Primary AVN52 generally limited to US$350m for all aviation sub-classes and continued focus on sub-limits.Coverage changes.Situation with embedded general aviation or limited runoff on a“losses occurring

92、basis”remains under scrutiny.From July 1 Grounding generally limited to US$250m for any one occurrence,included in the overall aggregate limit for Schedule C.Wording of the Russia-Ukraine-Belarus exclusion continues to be developed.After recent years Cat losses,the reinsurance Excess of Loss(XoL)mar

93、ket remains in deficit.Despite recent developments and settlements,significant uncertainty around potential losses from leased aircraft in Russia prevails.Source:Guy CarpenterAviation Hull War,Excess AVN52,and PV excluded from composite programs,maintaining specific standalone covers and higher cost

94、s.Major risks Hull War excluded from XoL programs in almost all instances,while cover for general aviation risks is more dependent on portfolio characteristics.38Reinsurance market continues to seek increased prices.XoL reinsurers continue to push for premium increases,especially in non-primary laye

95、rs.Minimum Rate on Line(RoL)achievable 3.25%(pure GA clash)with some reinsurers looking for 4%+(portfolio dependant).Risk adjusted rate changes influenced by specific loss experience on recent market losses.Price increase dependant on treaty specifics such as exposure change,loss deterioration,and c

96、urrent pricing adequacy.Adequate reinsurer capacity prevails.Stable but tight capacity for Excess AVN52.The reduction in Tokio Marine Nichidos appetite(and planned withdrawal)from the retro market,has been replaced by expanded and new capacity;with pricing increases and coverage restrictions.General

97、ly adequate XoL capacity with some reinsurers seeking growth.Quota share and risk excess.Current conditions in the direct airline market remain of growing concern.Should direct airline market conditions prevail,support for Quota Share(QS)capacity is highly likely to diminish.In general,QS capacity r

98、emains adequate,but very tight for some programs.Risk excess capacity remains scarce with continued pressure to reduce limits and maintain sideways aggregate caps.Source:Guy CarpenterAviation reinsurance market trendsAppendix40How we present market trendsMean vs.weighted average explainedAirline2021

99、 premium2022 premium%changeOne airline1001022%Two airlines15018020%Three airlines1,0001,0303%Totals1,2501,312Mean premium change is the mean average of the individual airline percentage increases.(2%+20%+3%)/3=8.33%Weighted average is calculated by summing the entire portfolio for each year and show

100、ing the percentage change between these.(1,312-1,250)/1,250=4.96%This can be distorted by a small account with a large percentage change.As weighted average uses premium volume,it may distort the percentage change applicable to airlines where premium volume is low.Summary:Weighted average considers

101、premium volume and mean average does not.A business of Marsh McLennanThe information contained herein is based on sources we believe reliable and should be understood to be general risk management and insurance information only.The information is not intended to be taken as advice with respect to an

102、y individual situation and cannot be relied upon as such.Registered in England and Wales Number:1507274,Registered Office:1 Tower Place West,Tower Place,London EC3R 5BU.Marsh Specialty is a trading name of Marsh Ltd.Marsh Ltd is authorised and regulated by the Financial Conduct Authority for General Insurance Distribution and Credit Broking(Firm Reference No.307511).Copyright 2023 Marsh Ltd.All rights reserved.MC231027674