Berkley Accident and Health has set up Encap Business Aviation Captive to create “an insurance brokerage program specifically for business aviation employers that employ between ten and 1,000 employees,” Joe Clifton, director of JP Benefits Connection, told AIN. The program offers medical and prescription coverage.
Aerospace companies trying to bounce back from the downturn face many challenges, including rising costs, but they are still enjoying one blessing: lower insurance costs. The latest “Aerospace Market Outlook” report from leading insurance group Aon Risk Solutions shows the industry now starting its fifth consecutive year of falling premiums.
To better understand insurance it helps to understand what it really is. The historical foundation of insurance is that disaster can strike anyone, at any time. The concept of insurance is the good fortune of many helping provide for the bad fortune of a few.
In the months since September 11, the insurance industry has taken a beating. Some estimates–and they are still just estimates–put the total losses in excess of $100 billion.
Within days of the terrorist attacks, it was apparent that efforts by insurers to cope with the disaster would translate to higher costs and changes in coverage limits. So far, this is being proved out.
Someone I used to know–a father and general aviation pilot–questioned why he needed life insurance, because, quote, “I won’t be around to enjoy it.” He could well afford it, but apparently his survivors’ welfare didn’t warrant the few bucks a month a policy would cost.
Following last September 11, aircraft owners and operators began bracing for massive hikes in insurance coverage and changes in the limits of that coverage. Now, a year later, their fears are being realized. But while rates have risen, sometimes triple those before September 11, the increases are not without some justification. The question is, just how much is justified?
If aviation insurance news has been mostly bad since September 11, there is still one small bright spot in the industry. Life insurance premiums for corporate pilots have either remained stagnant or actually decreased since last September. And aviation operators have an increasing variety of choices for providing life insurance for their employees.
In a world of uncertainty, life insurance remains a priority for many business aviation pilots. Unfortunately, it also remains a much misunderstood subject.
Before September 11, insurance occupied no more than an afterthought in the minds of most in the aviation industry. For years, premiums had remained relatively stable, even reasonable, and standards of coverage conformed to the level of threat, perceived as minimal. In the years ahead, the aviation industry will look back at those as “the good old days.”