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Pilot Age and Insurance


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57 minutes ago, RobertGary1 said:

Several less underwriters competing for our business js really the explanation. Companies just find the business isn’t very attractive so they do something else. Nothing more complex than that.
 
Pretty textbook really. 
 

-Robert 

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.:(

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Fellow MooneySpacers: It's no secret that the insurance market has hardened.  I am writing to advise of the strategy I would take when Mooney pilots approach various age levels as we are starting

Then if there is a claim, the insurance company would subrogate their losses against you and your assets. The open pilot clause, unless otherwise stated in the policy, simply means the claim will be p

The guidance I’ve been needing for a while...      TBM just delivered their 1000th plane...   Parker, in all seriousness... it is sure great to have your insight on how the insurance busines

1 hour ago, MikeOH said:

 

If it makes you feel better just keep telling yourself it's 'textbook' business as usual.

 

The only other possibility is felony collusion. Otherwise underwriters couldn’t coordinate to artificially raise rates at the same time. 
 

If profitability was there eventually one underwriter will get greedy and lower their rates and steal all the business. 
 

-Robert

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1 minute ago, RobertGary1 said:

The only other possibility is felony collusion. Otherwise underwriters couldn’t coordinate to artificially raise rates at the same time. 
 

-Robert

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.

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6 minutes ago, MikeOH said:

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.

I think the underwriters are too greedy for your theory to be true. Someone would get greedy and undercut the other underwriters in your scenario and take all the profit. There has to truly be a lack of profitability to prevent that.  
 

-Robert 

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9 minutes ago, RobertGary1 said:

I think the underwriters are too greedy for your theory to be true. Someone would get greedy and undercut the other underwriters in your scenario and take all the profit. There has to truly be a lack of profitability to prevent that.  
 

-Robert 

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.

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Another thing that is interesting is how crazy low rates had been. 2 years ago I was paying less than $1000/yr for about 70k in coverage. I doubt I could get coverage in an old beater car for that. In some sense rates may have been too low resulting in a red ocean for the underwriters.  Eventually some couldn’t survive on the morsels.   
 

-Robert 

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16 minutes ago, RobertGary1 said:

Another thing that is interesting is how crazy low rates had been. 2 years ago I was paying less than $1000/yr for about 70k in coverage. I doubt I could get coverage in an old beater car for that. In some sense rates may have been too low resulting in a red ocean for the underwriters.  Eventually some couldn’t survive on the morsels.   
 

-Robert 

I have a feeling you are correct!

Too good for too long :(

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It is possible to get a pilot or training school listed on a policy as an additional named insured. It is also possible to get a Named Insured endorsement to add a pilot. In the past, the Named Insured Endorsements have been pretty easy to get and with no charge or a nominal charge, but I can’t speak to this year’s market, have not tried in a couple of years.

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On 9/26/2020 at 9:14 PM, MikeOH said:

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.

 

In the days where there were more carriers, some tried to hold onto market share by increasing the pool of pilots they'd insure.

That's a side note to the 40% rate increases.  The premium increases is just a function of market capacity.  What explained the 10% year over year decreases every year for multiple years?  Anyone have their policy from 2005 to see their premiums then?

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1 hour ago, wishboneash said:

The following is strictly my opinion ;

Regarding information from the folks in the video.................I found it very interesting and very revealing.............basically, there is NO industry data to support the rate increases...............and per Marci at Avemco [and as and underwriter, she does have the data], there is no data to support saying that older pilots claims are increasing. 

To me, the revealing part of this video.......older pilots appear to be increasingly the larger part of the insured pilot community.  That goes to supply and demand and capitalism.  The insurance underwriters money will come from where the money is..............more of older pilots..........which leads to capitalism, which means to extract the most money from the largest part of the market.  Hence the unprecedented rate increases [with no data to support increased claims] for older pilots. 

The other revealing part mentioned in the video.............aircraft incidents [gear up, ground loops, etc] are not necessarily in the accident rate data............so again, no data to support rate increases.

Regarding AVEMCO not raising rates and relative to customer loyalty............that goes to pay now or pay later.  In other words, if you've been paying the AVEMCO higher rates all these years, and now as an older pilot.........business as usual, no substantial premium increase.  If you're new to AVEMCO [I'm about to find out], well, lets see!!

And all this [my opinion again only]............we've had it really good for a long time!

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2 minutes ago, MooneyMitch said:

 

Regarding AVEMCO not raising rates and relative  customer loyalty............that goes to pay now or pay later.  In other words, if you've been paying the AVEMCO higher rates all these years, as an older pilot.........business as usual, no substantial premium increase.  If you're new to AVEMCO [I'm about to find out], well, lets see!!

And all this [my opinion again only]............we've had it really good for a long time!

You have to give some credit to Avemco.  While all the underwriters were slashing each other's rates and underwriting requirments, Avemco lost a lot of market share, but they knew what worked and their commitment to the light aircraft market has been largely consistent as evidenced by their product offerings.

Dealing with Avemco is like calling your auto insurance company.  Don't like the price?  They'll say their sorry to see you go, but won't budge on the rates.

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1 minute ago, Parker_Woodruff said:

You have to give some credit to Avemco.  While all the underwriters were slashing each other's rates and underwriting requirments, Avemco lost a lot of market share, but they knew what worked and their commitment to the light aircraft market has been largely consistent as evidenced by their product offerings.

Dealing with Avemco is like calling your auto insurance company.  Don't like the price?  They'll say their sorry to see you go, but won't budge on the rates.

I do respect AVEMCO from a business standpoint.................they stayed the course..............very wise as it turned out.

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3 minutes ago, MooneyMitch said:

Regarding 2002-2005 reference................in my nearly 50 years of having aircraft insurance, I've never, ever experience a nearly 40% premium increase.  This is unprecedented.

As with ANYTHING..................follow da money folks...................it's all about MONEY!  :lol:  I'll play the game until I can't. :D

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1 minute ago, MooneyMitch said:

Regarding 2002-2005 reference................in my nearly 50 years of having aircraft insurance, I've never, ever experience a nearly 40% premium increase.  This is unprecedented.

It's precedented if we look at it from a $ perspective, not %.

An owner might be getting a $400 increase on $1000 (40%).  But that same $400 increase on a policy that already cost $1500 in 2002 is only 27%.

An underwriter will spit it back to us as "40% of nothing is nothing".

These are pilots trying to run insurance companies.  I can assure you they aren't trying to kill GA as we know it.

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11 minutes ago, MooneyMitch said:

.  The insurance underwriters money will come from where the money is..............more of older pilots..........which leads to capitalism, which means to extract the most money from the largest part of the market.  Hence the unprecedented rate increases [with no data to support increased claims] for older pilots. 

 

The flaw in that logic is that has not changed. They have always tried to charge the highest premium they can until you decide to buy your insurance from their competitor. So I don’t think that explains anything. 
 

What has changes is less competitors to force down premiums after some decided there isn’t money in ga insurance  

-Robert 

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Just now, Parker_Woodruff said:

It's precedented if we look at it from a $ perspective, not %.

An owner might be getting a $400 increase on $1000 (40%).  But that same $400 increase on a policy that already cost $1500 in 2002 is only 27%.

An underwriter will spit it back to us as "40% of nothing is nothing".

These are pilots trying to run insurance companies.  I can assure you they aren't trying to kill GA as we know it.

Thank you Parker on the % perspective................ I agree, the underwriters are not trying to directly kill GA, they are simply capitalizing on the current market.............they want to continue to make money and they will make it from the well that supplies it.  That is until the well runs dry............

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1 minute ago, RobertGary1 said:

The flaw in that logic is that has not changed. They have always tried to charge the highest premium they can until you decide to buy your insurance from their competitor. So I don’t think that explains anything. 
 

What has changes is less competitors to force down premiums after some decided there isn’t money in ga insurance  

-Robert 

Yes, I agree..................there's that too...........less competitors.

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16 minutes ago, MooneyMitch said:

The following is strictly my opinion ;

Regarding information from the folks in the video.................I found it very interesting and very revealing.............basically, there is NO industry data to support the rate increases...............and per Marci at Avemco [and as and underwriter, she does have the data], there is no data to support saying that older pilots claims are increasing. 

 

And all this [my opinion again only]............we've had it really good for a long time!

I am waiting to see what happens this coming year, due early Feb 2021. I have pinged my broker for a heads up.. The biggest increase for me was 2 years ago. Last year it didn't change much.

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2 minutes ago, wishboneash said:

I am waiting to see what happens this coming year, due early Feb 2021. I have pinged my broker for a heads up.. The biggest increase for me was 2 years ago. Last year it didn't change much.

Hobbit............you may be ok as you're NOT an older pilot yet............are you? :lol:

I suspect your broker already knows.................and the fact he hasn't pinged you may be a good sign !:)

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I'm not really complaining.................I'm just enjoying the conversations with all this.............heck, my cable bill just went up again!!  It's the price we pay for the fun of life!!  And I live on the glorious weathered left coast where everything costs more............it's the price I pay. :D

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