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Goodwinds Expects Brazilian Bizav Industry Rise after Presidential Election

 - August 9, 2018, 4:34 PM
As an insurance broker focused on aviation, Goodwinds has branched out to cover hangars, airports, and other aviation infrastructure.

Like various other Brazilian bizav companies waiting for an upturn in Brazil’s currently soft economy, insurance brokerage Goodwinds thinks the election of Brazil’s new president in October will provide a new economic impetus, which will boost the country’s business-aviation industry in the next few years.

“There is a lot of potential to grow in business aviation” in Brazil, said Alexandre Marroquim, Goodwinds’ co-founder and executive director, in an interview with AIN. “The problem is our economy and politics. We need, as a nation, to improve and keep growing.” If—as many expect—the election this fall of a new president not mired in corruption scandals acts to stabilize Brazil’s politico-economic landscape and allow national economic growth to resume, then the country’s business aviation industry will quickly benefit, he reckons.

“We have a lot of opportunities” in business aviation, said Marroquim. “I believe it will start to climb in the next year, after the presidential election. I think we will reach a good level in three to five years.”

Marroquim describes Goodwinds’ business in today’s soft Brazilian market as “stable,” but said one reason is that the company has diversified its insurance-brokerage activities to become “active in a lot of other insurance segments” beyond business and regional aviation, its core competencies from the day it was founded 14 years ago.

Today, in addition to remaining Brazil’s largest business aviation insurance broker with what Marroquim estimates as 50 to 60 percent of the entire Brazilian bizav market’s business, Goodwinds brokers a wide variety of risk-mitigation products. These range from auto, home and health coverage to pension plans, insurance lease bonds and insurance for associations and clubs. Goodwinds also has “some big clients” for hull and liability insurance for private yachts, according to Marroquim; and the company brokers insurance for fleets of road vehicles and for goods being transported. Its website lists other insurance options too, such as for engineering projects.

However, from the moment of the company’s inception, Marroquim and his co-founder Hugo Amaro clearly saw Goodwinds’ main business as aviation insurance brokerage. “We are in aviation 24 hours a day,” said Marroquim. The two men’s focus was natural, in that they were—and remain—active airline pilots, both still serving as captains of widebody aircraft for a large South American carrier.

“When we started our business, there was a gap [in terms of] people who really understand the aviation environment,” said Marroquim. Now, “our network [of contacts in Brazilian aviation] is very, very big, especially in business aviation. We have a great relationship with the whole market—from the north, south, east and west. We use this relationship to build our business, so our customers have great confidence” in Goodwinds’ aviation-industry expertise.

Underlining this approach, one of the areas into which Goodwinds has diversified beyond its core bizav and regional-aviation focus is to broker insurance for aviation-support and infrastructure companies. Goodwinds numbers among its clients several MRO companies which have purchased property and liability coverage through the company. It also handles the insurance requirements of a group of five Brazilian business aviation and general aviation airports, all of which have been privatized and are run by the same airport operator.

Within the Brazilian aviation industry, Goodwinds concentrates on finding and serving clients below the level of the largest airlines. Those carriers’ massive hull and liability insurance requirements are typically handled by major international brokerage firms with close ties to all of the world’s major national insurance and reinsurance markets: the Lloyds exchange and other UK insurers, the United States, Germany, France, Switzerland, Japan, India, Africa and several other areas globally.

Goodwinds’ own biggest two market segments for brokerage business are Brazil’s air taxi operators and its second-level regional airlines. The company lists as clients regional carriers such as Passaredo and Manaus-based MAP Linhas Aéreas (both of which fly ATR turboprops) and cargo operator Total Linhas Aéreas—which, in addition to operating four Boeing 727-200 freighters, uses three ATR 42s for passenger charter services.

Brazilian air taxi and business aviation operators have become much more safety-conscious in the past decade, and they focus strongly on training and operational safety today, according to Marroquim. He said this movement is reflected in Brazilian business aviation’s safety statistics, Marroquim describing them as comparable to those of developed nations in “the rest of the world … and still improving.”

For Goodwinds, an important aspect of Brazilian business aviation’s increased focus on safety is that most operators—“probably 70 to 80 percent—want to buy additional hull and liability coverage beyond the basic RETA insurance coverage the Brazilian government requires all aircraft operators in the country to have." The “spreadsheet” RETA coverage provides a range of standard, fixed insurance pay-outs based on aircraft maximum takeoff weight, the number of passengers onboard, and other factors. Operators in less-developed northern areas of Brazil most commonly rely only on RETA coverage, according to Marroquim.

Deductible levels and liability levels for Brazilian business and private aviation vary depending on aircraft types and cost and “are very similar to [those in] the U.S. and European markets,” said Marroquim. A hull-loss deductible for a business jet would be in the 5 percent to 10 percent range, while for twin-engine business aircraft, deductibles can vary from $25,000 to $100,000, depending on the type and the client. The liability coverage level required by operators of large executive jets such as the Bombardier Global family, Gulfstreams and Falcon 7Xs and 8Xs is usually $150 million, whereas for a single-engine Cirrus aircraft it is “at least $1 million.”

Not including the international underwriting-capacity requirements of Brazil’s largest airlines, eight insurance companies provide most of the nation’s primary aviation-insurance capacity, according to Marroquim. These are the Brazilian subsidiaries of Mapfre Insurance; XL Catlin; AXA; Chubb; Fairfax Financial; and Swiss Re, along with domestic Brazilian companies Excelsior and Potential. Goodwinds brokers for all of them. “We are close to everyone—our policy is to make business with everyone,” he said.

In addition to its basic aviation hull and liability insurance business, Goodwinds also offers clients more specialized aviation coverage, such as war and terrorism risk insurance. Additionally, a promising new aviation market is developing in Brazil, according to Marroquim: hull and liability insurance for drone operations. Two years ago ANAC, Brazil’s civil aviation authority, made RETA coverage mandatory for all professional operators of drones and now “many companies are buying insurance for this.” Extra hull and liability coverage is available above the RETA insurance, and some operators, particularly those flying large drones costing as much as $100,000, are purchasing it.