Welcome back to the Aviation Insurance Blog. In the last post, we examined the basics of aviation insurance and discussed why this specialized market is necessary. Now we will take some time to discuss the players involved in the aviation insurance marketplace. There are many different specialists at varying levels in the aviation insurance markets, but today we will be focusing on the key players at a broader level.
The key players in aviation insurance can be different than what you’re accustomed to dealing with in auto or home insurance. With home and auto, you’re likely to call several people to get a number of different quotes. Some insurers are their own direct writers, and some are independent agents. That’s not exactly how the aviation insurance marketplace works. The majority of policies that are written for aircraft and aviation businesses are provided through agents (or brokers). These agents will all tell you that they’re working with the same insurance companies, which means that you’re probably going to get the same quote regardless of who you call.
The only instance when you wouldn’t get the same quote is with the direct writer insurance company called AVEMCO. AVEMCO has been around for many years and they work primarily with light piston aircraft and experimental aircraft. They generally are not involved with aviation flight clubs and larger valued aircraft. AVEMCO is an exception and receiving direct writer insurance is not the case for most people, so let’s get more specific about each player that is commonly involved in aviation insurance.
Agent/Broker: The agent or broker is a person that you, as a consumer, talk to about getting insurance. For instance, I am an aviation insurance broker, so I represent you to the insurance company. First, I gather the information we need in order to evaluate your risk. We then look at your exposures and put together a submission that goes to these aviation insurance markets.
Insurance Companies: The insurance companies themselves provide the coverage and the policy that will protect you in the event of a loss. Within that insurance company, there are also multiple players.
- Underwriters: These are the people who evaluate the information that the broker sends to them about your risk. They then assess whether their insurance company is going to be a potential fit for you. Each insurance company has a different appetite for what they will and won’t write. They often have varying preferences and abilities concerning aircraft types, aviation businesses, values, insured amounts, liability limits, pilot qualifications, and more. The companies typically stick with things that they are interested in writing, so the underwriter’s evaluation of whether or not you’re a good fit for them is critical. If it’s determined that you’re a good fit, the underwriter will provide the rates that will be used to determine the premium on your policy. Chief underwriting officers, actuaries, and reinsurance negotiators may also be involved on the back end, but customers typically only deal with the underwriter.
- Claims Adjusters: Claims adjusters are the people you work with when you have a claim for your insurance. They may come and take pictures of the damage, and then they work to adjust or settle that claim. These people are specialists with expertise in resolving many different types of claims, whether they be physical damage, product liability, or any other losses.
Those four large categories encompass most of the players in the industry that you could interact with as a customer. Many other people are involved in this industry at less prominent levels, such as attorneys who specialize in aviation insurance and independence claims adjusters that insurance companies can utilize. There are also people who just get involved in helping insurance companies purchase reinsurance.
Aviation insurance is a very deep industry with a lot of expertise and many trained professionals, both in the United States and globally. Hopefully, now when you’re having discussions about aviation insurance, you’re better informed about the different players involved in your buying experience!
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