A safe haven for insurance capacity?
By Alex Trotter | July 9, 2025
The general aviation insurance trading environment is currently following the trends set by the airline and aerospace markets in 2024. While negotiations in airline and aerospace have become more robust, insurance capacity for well-managed general aviation risks with good loss records remains relatively high and is the key driver of the competitive pricing dynamics.
The insurance community’s attention has been focused on the incidents and associated claims in the airline sector, but the implications of these events have not yet rippled out to general aviation, predominantly because the sector continues to enjoy excess capacity. As a result, trading remains positive despite insurers in other parts of aviation striving for market discipline.
Part of the reason for this is that when insurers are looking for ways to spread their risk across a portfolio, the general aviation industry’s lower loss modeling can make a relatively safe haven.
The first of July is a significant renewal date within the general aviation insurance calendar. This date marks a critical juncture for many policyholders, brokers, and underwriters, as a substantial volume of business is transacted, particularly oil and gas helicopter fleets. The concentration of renewals on this date provides a valuable snapshot of market sentiment and pricing trends, offering insights into the broader trajectory of the GA insurance sector.
Approximately $100 million in premium is placed on or around July 1. This volume reflects a diverse array of risks, ranging from small private aircraft to larger commercial operations. The aggregation of such a significant premium volume allows insurers to assess portfolio performance and recalibrate underwriting strategies accordingly.
While reductions in premium rates are still being achieved, the pace of these reductions has begun to slow from 2024 levels. This deceleration reflects a more measured approach by underwriters, who are increasingly focused on maintaining profitability amid evolving risk landscapes. The moderation in rate reductions suggests a potential inflection point, where the market may begin to stabilize after several years of softening conditions.
Clients are increasingly aware of the challenges facing the broader airline insurance market, particularly in the wake of several high-profile incidents which have heightened sensitivity to risk and underscored the importance of robust insurance coverage. As a result, clients are more engaged in renewal discussions and are seeking greater clarity on market conditions and pricing drivers.
That said, it’s a diverse sector, so it's always best to avoid generalizing. While insurers are responsive to broad market trends and competition, they also examine, and price, insurance programs on their individual merits and the level of risk they represent.
One example of this is hotspot flying. Geopolitical tension remains high, and the current levels of conflict have not been seen since the end of the Cold War.[1] This has direct ramifications for many general aviation organizations and their insurance programs.
There are two main reasons for this: on the one hand, airports have strategic importance in conflict zones, as we have witnessed most recently in Bamako in Mali,[2] Port Sudan[3] and Sa’na in Yemen.[4] On the other, general aviation plays an active role in delivering humanitarian relief in the event of conflict between countries, civil strife within a country or natural disasters.
From an insurance perspective, rates in the hull war market have been relatively stable over the last year. Before this, a protracted soft period at the start of the 2020s led to a period of recalibration in terms of both rates and coverage.
Communication and transparency between clients and their insurance partners is vital to ensure that aid can get to where it is needed as quickly and efficiently as possible. Insurers will always try to support general aviation operations that are attempting to fulfill humanitarian obligations, but they also need to manage potential downsides and maintain underwriting discipline. As a result, geographical limit changes, time on ground warranties, notice of cancellation periods rate adjustments (known as hotspot rate additional premiums) are often applied to policies that support operators in distressed regions.
Meanwhile, the full implications of changing global tariff systems are yet to be realized. Aircraft orders and supply chain challenges are already emerging, though, with some aircraft said to be being returned and aircraft orders being canceled.[5] Despite this, global cargo demand remains high.[6]
From an insured perspective, during periods of economic turbulence, all three sides of the insurance process, insureds, brokers and insurers, have an interest in stabilizing their insurance activities as far as possible. Two ways that this is apparent in 2025 is the increased prevalence of facilities and the ongoing discussions around long-term agreements (LTAs).
Insurance is constantly evolving to ensure that clients are offered efficient coverage at appropriate prices. One of the ways that this has happened over the last few years is the rise in insurance facilities for certain activities.
But how does an insurance facility work? In a facility, an insurer subscribes to a pre-agreed framework with specified parameters and in some cases allow themselves to be bound on certain risks. Each policy remains separate, but by combining broadly homogenous risks, coverage and transaction speed can be maximized and administration minimized.
There are also benefits of developing a portfolio of similar risk types for each of the three sides in an insurance transaction: insureds enjoy improved coverage conditions and pricing as well as simplicity of renewal; brokers benefit from transaction efficiency and insurers can gain portfolio spread.
The general aviation sector can be an appropriate place for facilities in certain circumstances and they are currently being offered widely. The process is being encouraged by the increasing prevalence of insurer-backed online platforms, which in some instances are augmented with artificial intelligence to enhance client support and improve portfolio performance insights.
LTAs are more straightforward and involve simply extending the length of an aviation insurance policy from the standard 12-months to 18- or even 24-months, offering insured, insurer and broker extended balance-sheet certainty.
LTAs have been available with caveats attached, normally relating to losses or material changes in exposure. Reinsurance availability also impacts whether they are offered.
We expect LTAs to continue to be selectively offered by some insurers. There is a change though: Previously, the period of an LTA beyond 12 months might have been priced at reduction to the incepting premium to encourage the buyers to purchase the cover and secure the insurers’ participation for the longer period. Now, perhaps responding to the recent aviation losses, insurers are keeping the premium level for the duration of the agreement. If insurers start increasing premiums for LTAs, it would be a sign of a harder market.
There is awareness of loss trends in the maintenance, repair and overhaul (MRO) sector.[7] Incidents appear to be occurring for several reasons, including supply chain challenges that are making parts difficult to get hold of. This is increasing the need to cannibalize other assets to mitigate broader, fleet-wide, flight worthiness issues.
The MRO workforce has not yet fully returned to pre-COVID-19 levels, so there’s more work to do for a reduced workforce. This is straining the talent pool and increasing the need for training.[8]
The large aircraft business jet sector is also worth noting. These aircraft are more valuable than most general aviation aircraft, and some operators are requesting higher values and raised liability limits. In some cases, this is creating challenges at placement.
In conclusion, the general aviation sector offers its customers a versatile and varied selection of solutions, from point-to-point executive travel in the latest business jet to helicopter-slung load aid deliveries in challenging locations. Insurers, while instinctively conscious of anything out of the ordinary, continue to respond to the challenges operators and their brokers present to them. As ever, transparency and communication between the general aviation organization, broker and insurer remains key.
