At a glance
- The range of organisations with potential exposures in the aviation sector is extremely diverse
- Insurance solutions have traditionally been product-focused, rather than customer-centric
- A new co-insurance solution from Zurich and Mitsui Sumitomo Insurance Group (MSIG) offers brokers’ clients the best of both worlds, matching a customer-centric focus with decades of aviation underwriting experience
From manufacturers of ball bearings to caterers – the range of organisations with potential exposures in the aviation sector is extremely diverse.
Incidents leading to an aeroplane crash or grounding may be rare, but when they do happen, they are invariably complex and costly for organisations and their insurers to deal with.
Risk from unlikely sources
Not all incidents are caused by failings in what would be considered flight-critical components. The Swiss Air Flight 111 disaster remains a stark reminder of how risk can emanate from an unlikely source. An investigation into the crash on 2 September 1998 – which claimed the lives of all 229 people on board – concluded that the fire that brought down the jet was probably started by an electrical fault in the in-flight entertainment system.
Other recent incidents, which have caused flight disruption, include a software glitch in April on an iPad app containing airport maps, which delayed dozens of American Airlines flights.
Incidents can also involve organisations operating on the ground. For example, in 2012, a Heathrow baggage cart driver caused more than £1 million of damage after accidentally slicing through the tail of a Scandinavian Airlines plane.
Aviation is also one of the most heavily regulated industries in the world, which makes it vital that organisations with exposures in this sector understand the risks and are properly insured.
A game-changing solution for customers
A new co-insurance solution from Zurich and Mitsui Sumitomo Insurance Group (MSIG) promises to be a “game-changer” for organisations with aviation exposures.
The solution will offer customers market-leading capacity up to $300 million, and will pair Zurich’s customer-centric approach with MSIG’s aviation underwriting skills and technical knowhow.
“We have a number of customers that have an aviation products exposure, but for whom we didn’t have a solution ¬– until now,” explains Steven Taylor, Head of Product Development, Zurich Global Corporate UK.
“We are offering a solution for customers which utilises the expertise of MSIG, which has been in this market for many years and retains Zurich’s Customer Management Model and Whole Account View.”
Zurich’s Whole Account View means a customer’s aviation policy will not be considered in isolation; instead, they will benefit from Zurich’s holistic approach, which takes into account their premiums on other lines.
MSIG brings to the table decades of aviation underwriting experience. On MSIG’s aviation team are several members of the International Union of Aerospace Insurers (IUAI), including MSIG Underwriting Manager Noel Holloway, who sits on the IUAI’s Executive Committee.
Noel describes the Zurich/MSIG co-insurance solution as “a bit of a game-changer in the market”.
He adds: “The combination of two of the largest insurers in the world is a pretty powerful proposition.”
Both men agree there will be benefits for customers and brokers alike.
Noel says: “I see this as an opportunity for brokers to work more closely with Zurich and MSIG, to provide a better, more overarching service to their clients.
“This product gives clients and their risk managers an opportunity to review all their exposures on the same renewal date with the same broker.
“It makes their life so much easier, and there are economies of scale from buying from the same market.”
Steven adds: “What is fundamentally new in the approach of this product is that we are providing this overarching, holistic solution that enables customers with Aviation exposures to have them considered alongside the whole of their portfolio of insured risks. The existing aviation market does not take this customer-centric approach.”
For more information please speak to your local Zurich contact.