Clear on Top

This week Starr Aviation announced the acquisition of International Aerospace (Inter Aero), a relatively new but significant general aviation insurance underwriting facility.  Inter Aero came on the scene approximately three years ago underwriting general aviation for Arch Specialty Insurance Company.  Inter Aero made an early impact in the general aviation market place with their broad policy form and competitive pricing.  They were especially competitive with single engine turbine and single pilot owner flown turbine and jet equipment.

So what effect will the loss of just one insurance company have on the overall general aviation industry?  If it is just one company, maybe not much.  In this case, however, we have now lost three companies in less than a year.  Travelers Insurance announced it was withdrawing from aviation.  In addition, AXA Insurance (Britt Paulk) announced its withdrawal from general aviation underwriting.  In less than a year, the underwriting ranks have gone from 16 to 13.  This is a significant decrease in overall capacity.

Is this enough to trigger the beginning of the next hard market?  No, but it could result in a decrease aggressiveness throughout the industry.  Let’s call it market stabilization.