USAIG marks milestones as underwriter and bizav operator

 - January 31, 2008, 4:34 AM

July 1 is the 75th anniversary of United States Aviation Insurance Group, better known as USAIG. That day, the New York-based company celebrates not only three-quarters of a century as America’s oldest insurer of general aviation airplanes, but also as an aircraft operator, using general aviation in the conduct of its business.
USAIG purchased its first aircraft–a Bellanca–in 1939. Today, it flies a Learjet 60 and owns a fleet of seven Cessna Skylanes and a Cessna 210 based throughout the country, allowing USAIG claims adjusters and underwriters to get to clients in a timely manner.

USAIG believes that being an aircraft operator “provides a working familiarity with the industry we underwrite in a way not achievable any other way,” USAIG officials said. “By operating our fleet, we understand the concerns of our clients. We also enjoy the same benefits general aviation provides to all its users, namely unparalleled access to thousands of places not easily reached by any other mode of transportation. Many of our clients are in such places, and many accidents occur there as well.”

Over its 75 years, USAIG has had just seven chairmen. The company was co-founded by two World War I pilots: David Beebe, who served as chairman the longest (from 1928 to 1950); and Reed Chambers, who was chairman from 1950 to 1968. Current chairman Harold Clark has held the post since 1994.

Chambers was an ace in World War I, but it was his operation of Florida Airways that led, in part, to his founding of USAIG. The story goes that Florida Airways, which started as a mail carrier and later became one of the first passenger-carrying airlines, lost four airplanes–one in a fatal accident and the remaining three in storms. Without the proper insurance, his airline would have been doomed.

USAIG has been involved in numerous aviation historical events. For example, the company insured Jimmy Doolittle’s 1929 “blind flight,” the first trip conducted entirely on instruments (under the hood) to simulate IMC. USAIG said it handled all claims involving American citizens injured or killed in the Hindenburg dirigible disaster at Lakehurst, N.J. in 1937. The company also said it handled all claims resulting from (not counting 9/11) aviation’s worst disaster to date: the ground collision of two 747s in Tenerife, Canary Islands, in 1977 that killed 580 people.

Proactive in Promoting Safety
While the outcome of claims may not always please all parties involved, few can argue that USAIG hasn’t been proactive in programs that encourage safer flying. One of the company’s most visible products is its series of Safety First posters published on average six times a year. Since 1976 in partnership with NBAA, the National Air Transportation Association and the Helicopter Association International, the company has published more than 900,000 posters featuring 300 different safety messages for distribution to association members all over the world.

A coffee-table book featuring nearly 80 Safety First posters for the helicopter community was published last year and distributed to attendees at HAI’s annual convention.

In 1996 USAIG initiated its Safety Bucks preferred policyholder program for the helicopter industry to encourage commercial rotorcraft operators to enroll in manufacturer-approved training programs. “The rotorcraft industry accident rate was high and the industry premium-to-loss ratio was unacceptable,” said a USAIG spokesman. “In this situation, underwriters have three choices: raise rates, retire from the business or find a way to improve the accident experience.” USAIG opted for the latter.

Over the last six years, USAIG has contributed $2 million in Safety Bucks to help pay the annual training costs of Bell and American Eurocopter operators who participate in the insurance firm’s preferred policyholder program. In this program, each participating operator receives up to $30,000 per year to spend on flight or maintenance training. To date, 71 Bell and American Eurocopter operators flying 228 turbine helicopters participate in the program. According to USAIG, statistics show that its preferred policy holders have a safer record than civil helicopter operators as a whole.

There is currently no similar program for the business jet community, “as the need is not as great,” the spokesman said. However, USAIG for many years has required annual recurrent training for its jet and turboprop customers to be “eligible for our most competitive rating and broadest policy form.”