The Case For Captives In The Aviation Industry Is Stronger Than Ever

Rising insurance premium rates, limited capacity with commercial insurance carriers and a looming global recession made 2022 extremely challenging for aviation insurance buyers. In this environment, the aviation industry should be looking at creative strategies, including captive insurance structures, to improve risk management.

A captive can successfully mitigate the impacts of commercial insurance capacity shortages, excessive premium rates or aviation assets and risks that fall outside available coverage in the market. It gives airlines and other participants in the aviation industry an alternative when it is undesirable (or impossible) to buy from the commercial insurance market. Hull war and excess war renewals, for example, are seeing substantial pricing increases given the Russia-Ukraine war and the confiscation of western-owned aircraft in Russia.