MikeOH

Geez! Never thought about THAT! Thanks for the education.

I have two issues with this debacle that bother me: First, is with how 'broad' the market pool really is, not with capitalism itself. Namely, many here rant because WE as GA pilots keep doing the same dumb things that affect all of our rates. Increases to cover those type of increases are logical, even expected, and historically rate increases have reflected that. I suspect I'm not the only one here who, in their wildest imagination, thought we were in the same "pool" with Boeing! As in, we get to help clean up THEIR mess! I didn't know I was signing up for THAT! I'll bet a whole lot of other GA pilots weren't aware of that exposure, either. Sure, you can gloat that was my ignorance if it makes you feel superior. I don't care. The second problem I have is that we are PAYING the insurance companies to take on a risk based on THEIR actuarial data of risk...when a nightmare like the BOEING MAX happens they should suck it up, NOT run out and MAKE us pay for their underestimate of risk. I.e., quite literally get their profit back AFTER THE FACT! When a company screws up they SHOULD go out of business; that, too, is capitalism. Why should another market bail them out? You, I suspect, view ALL of aviation from a hang glider the A380 to be our insurance "pool." I, emphatically, do NOT. Put it this way, would you be okay if your HOME insurance went up by 40% to pay for the BOEING MAX? It is not inconceivable that some higher level reinsurer is involved in other markets besides aviation. Would you still be crying "classic capitalism?". And, happily pay since you 'want them to be around for you?"

Excellent post! Especially, the last warning....I almost got sucked into Pilot Medical Solutions back in 2003 after my liver transplant. Boy, I dodged a financial bullet NOT using them. I ended up following AOPA's protocol for kidney transplant and wrote my own letter to OKC along with all the reports. I gave them everything they needed, first time, and got my SI letter with no back and forth. While I am NOT recommending this approach, I had a HORRIBLE time finding an AME that would work my case, so went the DIY route. The OP needs to have his friend get a hold of Bruce Chien. Finding a suitable AME is NOT an easy task, even in a populated area (I'm in southern California). Many just want to take the fee for a standard, no trouble, exam

I don't think so. Ryoder's post was not saying Avemco was paying for the 737 MAX. The Avemco individual was speaking to what was affecting the market, "They are trying to cover for 737 Max losses. They all buy into pools of money and it’s more expensive now.". "They all" was NOT referring to Avemco, but to the "pools of money," secondary reinsurers, that OTHER underwriters use. This is EXACTLY what I've been positing all along: something RADICAL changed that is causing UNPRECEDENTED increases, and the MAX liability losses (I can't even fathom the settlement costs of all the passenger lawsuits)...it is NOT 'classic capitalism' at work this time around

Yeah, I just got my renewal inquiry from Parker (Global, as well). We'll see...Avemco may be getting a call from me; hope not! Just watched a 40 minute Avweb interview (https://www.avweb.com/multimedia/aviation-insurance-expensive-and-getting-worse/) with two brokers and a rep from Avemco. The brokers engaged in speculation and it was entertaining to watch the Avemco rep contradict the verbose broker with their data. The Avemco rep stated that their actuarial data for the last 60 years doesn't show an increase in older pilots having accidents...no surprise there. Their pricing has not been changing...of course, historically, they've been pricey. The video is a bit long for the low content level...but, if you've got some time to kill...

Seems you should be asking BOB that question

Clearly, not. As you are apparently not above a childish attack on the President. I guess political attacks are now fair game here on MS? Sad, as this place has been pleasantly devoid of such drivel

Well, I've been enjoying the fireworks on this topic. My conclusion: Don't come on here with a NEGATIVE review of any vendor. Only praise is welcome.

True, we are going to disagree. The amazing thing, to me, is the. way you and a few others rush to the defense of the insurance companies with only slight acknowledgement that it is unpleasant. I understand capitalism and competition in a normal market...the price is going to fluctuate up and down for a variety of reasonable reasons. I don't EVER recall either a 40% decrease, nor 40% increase in premiums in a SINGLE year. I'm going to stand firm that something else is at work here. And, I'm pretty damn close to going naked on hull. While I have it insured for replacement cost, I paid way less; I could walk away from the loss without too much grief. Of course, that would likely be the end of my flying days. I'm sure the insurance company won't give a rat's hind-end about me... but, if enough owners do the same, let's hope they figure it out before they nuke their own market. P.S. I've heard of de-wreck-o (derecho) claims...but deratio is a new one Filed a claim, did ya? Can't wait to hear about your next premium increase!

You are correct about the price. But, sadly, many of these individuals NEVER come to their senses. I saw way too many when I was shopping for my plane. Still see planes rotted on ramps way beyond saving...behind every one is an owner that was sure a better offer was coming

Don't fret! You done good!

Well, if they actually wanted to EXPLAIN a VALID rate increase it would be in their best interest, would it not. To circumspectly imply it's old age (can't get insurance above, higher premiums, etc.) or "gear-ups" without data to back it up is disingenuous at it's best. But, you are homing in on my point: They are SCREWING us simply because they can. The rest of this posturing about "unsustainable rates" and "losses" (well, DUH, they ARE an insurance company) is just so much BS. That's the business it has been since insurance was invented! The other possibility that I will raise, yet again, that has not been addressed is the possibility that the secondary/reinsurance carriers have DRAMATICALLY raised their rates to our carriers which have no choice but to pass them on or exit the GA market. At least I'd respect our carriers if they ADMITTED that....then we would know we were paying for claims in a completely different market (e.g. Boeing MAX payouts). I'd still be upset, but not mad that I'm getting shafted "just because we can."

@Parker_Woodruff While this all sounds very logical, if true, why were those rates EVER offered? The only logical explanation is that loss ratios have increased making those rate not sustainable. Competition does not explain that all the carriers would sign up for rates that put them in the red! Yet, I've requested, several times, for some, ANY, actual data that shows a loss ratio increase tied to whatever cause: old age, gear-ups, whatever. But, crickets And, sorry, but the 'smaller pool' argument doesn't hold water either: If I have a pool of 1000 planes and have 2 gear ups, and my pool shrinks to 500 I'll expect 1 gear-up if my loss rate stays the same. Sure, half the premium income, but half the payout, as well.

Which would be the case if the secondary reinsurers common to the multiple underwriters we deal with have raised their rates to all of the underwriters due to their huge losses. You are failing to look at history; these increases are unprecedented.

Hardly. I've outlined one plausible scenario, but you're hard over that this is just 'business as usual.' I disagree. We all have to live with the increases, regardless.

To state the obvious, the aviation insurance biz has been around a while. The number of underwriters has waxed and waned over the years. When has the GA market EVER seen 40% hikes in a SINGLE year. If it makes you feel better just keep telling yourself it's 'textbook' business as usual. We do agree there's not a damn thing we can do about.

Interesting info, thanks. So, due to lack of data they ignore their own losses and base premiums off of automobile actuarial data. I would expect that data has been rather stable for a LONG time in regards to accident rates of older drivers. In other words, it still does NOT explain the 40% increases we are seeing. I don't believe in coincidence. What must amount to HUGE payouts (already and for some time to come) related to the 737 MAX have to be coming from reinsurers that are common to both commercial and small GA underwriters. I'm positing that those reinsurers have jacked their rates to ALL of the GA underwriters. Some have chosen to exit the biz, the others are massively increasing our rates. I suspect this large of increase in a single year is UNPRECEDENTED. The idea this is just a 'natural' occurrence just isn't tenable.

I"m just going by the parts manual in reference to the F model:

A endless continuation of 'more of the same" doesn't explain 40% increases. Back to my original question: Is there any, verifiable, evidence that older pilots are causing the significant portion of gear-ups? Or, any other accident category?

And, that may well be going on: I get my renewal with a 50% hike, and switch to one with 'only' a 40% hike. We are still being screwed because of losses in what amounts to a different market that incurred an aberrant loss. We are paying for losses we have NO control over.

There may be higher level insurers that provide some kind of 'stop loss' protection to the carriers we pay premiums to. There may not be many of them and they are raising rates to multiple underlying carriers to make up for their 'stop loss' payouts. That would be another reason why multiple carriers we deal with all are raising rates. Again, my argument is that the EXTEME hikes we are seeing are NOT indicative of normal loss ratios and market competition. Something else is at play.

Not following why any collusion is required??? If the carrier/underwriter that insures small GA also is insuring Boeing and they raise our rates astronomically to pay for loss payouts to Boeing I'm not seeing any collusion.

That's certainly the normal way competition works; and the rates fluctuate accordingly. Seeing 40%, and higher, rate hikes in a single year is NOT normal fluctuation. I remain convinced we are subsidizing losses that are NOT in our market. Sorry, not buying the rates are due to a sudden plethora of old guys performing gear-ups.

If there is so much money to be made elsewhere (investor ROI), why haven't ALL of them left for greener pastures? My cynicism in all of this is that we aren't being told the real reasons for the giant hikes in our premiums. At this point my belief is that the small GA aircraft market has pretty well established, and stable, loss ratios. The idea that accidents in this market have taken such a sudden increase as to justify the new premiums doesn't pass the sniff test. I think we are subsidizing a couple of LARGE losses in the air carrier market: namely the Boeing MAX debacle.

That doesn't prove that the aviation insurance business is "not very profitable." Some may have left because they are no longer making as much as they would like. I'm just not believing they will starve unless they raise our premiums 40+% in a single whack!