Insurance Market Update - May 2023

[Parker_Woodruff]

It's been awhile since I've made a "sponsored" post.  I'll take this opportunity to make a write-up on the current insurance market.  If you attend MooneyMAX, you'll probably hear me talk a bit more about some of these things.

Forces affecting rates

• New Market Capacity
  With rising aviation insurance rates, it seems there is eagerness from insurance companies to get into aviation or expand their current aviation product lines.  This applies downward pressure on rates.
   
  • Beacon Aviation Insurance, which has historically been known for aviation worker's compensation, has expanded their product offerings into aircraft hull & liability and aviation general liability.  They're ramping up right now and we believe they'll be a strong force in personal aircraft insurance this year.
  • A new underwriting company has been formed: Eiger Insurance Services.
  • Mission Underwriting Managers is starting an aviation underwriting segment of their business.
     
• Market Capacity At Risk
  Any loss of market capacity has the chance of pushing rates higher.  In the case below, I don't anticipate significant ramifications for most Mooney owners.
  • Hallmark Insurance Group experienced major losses involved in their commercial auto insurance product line.  Their A.M. Best ratings have been downgraded twice and now ratings have been withdrawn.  https://finance.yahoo.com/news/am-best-withdraws-credit-ratings-201100756.html
    This is an insurer that would sometimes insure students in Mooneys.  Most Mooney owners would not be insured with Hallmark.  I think many of the other insurers will be able to pick up Hallmark's aviation business.
     
• Claim Inflation
  This is on going concern.
  • Claim inflation continues to outpace inflation.  Repair bills are very high.  Lower value aircraft are at higher risk for being totaled with minor damage or gear-up landings.  Large judgements on the liability side could cause insurers to rethink offering high limits of liability for general liability and corporate & commercial aircraft.  The typically low liability limits offered on personal aircraft policies could be an attractive market for aviation insurers to keep their risks low.
    • Claim Inflation - Forces rates up
    • Desire for lower coverage limit risks could put downward pressure on personal aircraft rates if insurers seek to insure risks with lower limits of liability.

[Parker_Woodruff]

4 hours ago, 1980Mooney said:

In the Safety section you said “Mooneys have some of the best insurance rates for Single Engine Retractable gear.  The newer Mooneys, especially, get very low rates...lots of companies compete for that business.”

 

I'm generally referring to the long body Mooneys (1989+) but there are also a lot of good insurance deals on the M20J and M20K that may not be as available on M20F and earlier models.  Newer models seem to often be rewarded with lower premium per dollar insured.
 

A $2000 insurance premium might insure a $120,000 M20F (very well qualified pilot, hangared, etc.)

A $2000 insurance premium might insure a $160,000 M20K