Aerospace Insurance Market Analysis Europe, North America, APAC, Middle East and Africa, South America - US, China, Japan, UK, France - Size and Forecast 2023-2027

Aerospace Insurance Market Forecast 2023-2027

Aerospace Insurance Market size is estimated to grow by USD 763.67 million at a CAGR of 4.36% between 2022 and 2027.

The market is on the rise, fueled by the expanding commercial aviation sector and a surge in air passenger traffic. Emerging regions like APAC, the Middle East, and Africa are witnessing significant airport developments, further propelling this growth. With the demand for travel and tourism steadily increasing, alongside the expansion of existing fleets and the launch of new airlines, the need for aviation product liabilities, line maintenance, and comprehensive insurance coverage

What will be the Size of the Market During the Forecast Period?

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The market is a critical sector that provides coverage for various risks associated with the aerospace industry. Hurricanes, cybersecurity threats, and accidents are some of the risks that aerospace companies face. Aircraft operators and manufacturers require extensive insurance coverage to protect their assets and mitigate potential losses. Aerospace insurance policies can include coverage for hull and liability, as well as comprehensive protection for parts, components, and equipment.

Cybersecurity risks are becoming increasingly prevalent, and insurance providers offer policies to protect against data breaches and other cyber threats. Moreover, the market for aerospace insurance is dynamic, with new technologies and innovations driving the need for customized insurance solutions. Passenger airlines, cargo operators, and space companies all require unique insurance coverage to meet their specific needs. The AIR (Aerospace and Aviation Insurance) market is a significant segment of the overall insurance industry, with a growing number of players offering specialized aerospace insurance products.

Technavio’s Exclusive Market Customer Landscape

The market forecasting report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth and trends strategies. 

Global Market Customer Landscape

Market Dynamics 

The aviation industry encompasses a vast ecosystem, from commercial air travel to aerospace insurers, each playing a vital role in ensuring safe and efficient airline operations. With the rise of autonomous flight systems, aircraft systems, and the increasing prevalence of drones, the landscape is evolving rapidly. As airlines and airports grapple with challenges like wildfires, hurricanes, and cybersecurity threats, there's a growing focus on aircraft renovation and modernizing airports existing infrastructure. Aerospace insurers are adapting to cover emerging risks, such as in-flight insurance and umbrella insurance, while also addressing traditional concerns like hangar and ground support equipment. Amidst this dynamic environment, collaboration between stakeholders—aircraft product manufacturers, leasing companies, ground operators, and air taxi operators—is key to navigating the complexities of the aviation sector and ensuring continued growth. Our researchers analyzed the data with 2022 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.   

Key Driver

The market is poised for growth due to the expanding commercial aviation industry and increasing air passenger traffic. New airport developments in fast-growing regions of APAC, the Middle East, and Africa will contribute to this trend. Soft market conditions in the insurance sector will be bolstered by the economic activity generated by these airports. Modernization of airport terminals is crucial to maintain high levels of passenger service. However, the aviation industry's growth also brings risks such as accidents, equipment failure, collisions, and destruction.

Space exploration activities also pose unique risks. Insurance coverage is essential for airlines, aircraft product manufacturers, leasing companies, ground operators, air taxi operators, and other industry players. Public liability insurance, passenger liability insurance, in-flight insurance, and umbrella insurance are some of the key types of coverage. The commercial aviation industry, including low-cost carriers and business & general aviation sectors, requires comprehensive insurance solutions to mitigate risks and ensure ease of travel for passengers.

Significant Trends

The market is poised for growth due to the expansion of the commercial aviation industry, particularly in APAC. Space exploration activities and increased air passenger traffic in countries like China, India, Indonesia, Russia, and the US, have led to a surge in aircraft orders and deliveries.

Aircraft OEMs are upgrading production facilities to meet demand. In the commercial aviation sector, both established airlines and low-cost carriers (LCCs) are expanding their fleets. Business & general aviation also contribute to market growth. Risk factors include accidents, destruction, equipment failure, collisions, and public liability, and passenger liability. In-flight insurance and umbrella insurance are essential coverages. Airlines, airports, aircraft product manufacturers, leasing companies, ground operators, and air taxi operators are key market participants.

Major Challenge

The market is experiencing significant growth due to the increasing economic activity in regions such as the Middle East, Sub-Saharan Africa, North Africa, and APAC. With the development of new cities and the expansion of existing ones, air passenger traffic is on the rise. This surge in travel demand necessitates the introduction of new aircraft and the modernization of ground handling technologies. Consequently, aerospace insurance policies are increasingly being sought after by stakeholders in the commercial aviation industry, including airlines, airports, aircraft product manufacturers, leasing companies, ground operators, air taxi operators, and business & general aviation sectors. The need for public liability insurance, passenger liability insurance, in-flight insurance, umbrella insurance, and other forms of coverage is essential to mitigate risks associated with space exploration activities, equipment failure, collisions, and accidents. Low-cost carriers (LCCs) and major airlines alike are investing in comprehensive insurance solutions to protect against potential financial losses.

Insurance premium rates for airlines are expected to increase in the coming years because of recent events such as attacks on airports, crashes, and similar events. As a result, the war risk premium is expected to increase in the coming years. Moreover, operators may reduce the number of flights to and from war-sensitive zones, which will be a challenge for companies. Airlines may collaborate with local carriers to cover a part of a long flight and maintain their usual service in the safer regions. Thus, the growing risk of accidents can challenge market growth during the forecast period.

Who are the Major Market Players?

Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.

Avion Insurance Agency Inc. - The company offers services such as customized coverage options for aircraft, including hull and liability insurance, hangar insurance, and aviation workers' compensation. It also offers insurance services for jets, aircraft, helicopters, drones, and UAVs.

Allianz SE - The company offers services such as comprehensive coverage for aviation risks, including aircraft hull and liability insurance, aviation products liability, and aviation workers' compensation.

We also have detailed analyses of the aviation & aerospace firms market competitive landscape and aircraft product manufacturers information on 20 market companies, including:

• Ace Aviation
• American Financial Group Inc.
• American International Group Inc.
• Aon plc
• Arthur J. Gallagher and Co.
• AXA Group
• Berkshire Hathaway Inc.
• BWI Aviation Insurance Agency Inc.
• Chubb Ltd.
• Global Aerospace Underwriting Managers Ltd.
• Hallmark Financial Services Inc.
• London Aviation Underwriters Inc.
• Marsh and McLennan Companies Inc.
• Munich Reinsurance Co.
• Starr International Co. Inc.

Technavio report provides an in-depth analysis of the market and its players through combined qualitative and quantitative data. The analysis classifies companies into categories based on their business approaches, including pure-play, category-focused, industry-focused, and diversified. companies are specially categorized into dominant, leading, strong, tentative, and weak, based on their quantitative data analysis.  

Market Segmentation

The market encompasses various aspects of risk management for the aviation industry. Hurricanes, cyberscurity threats, and other risks require Aircraft and Hurricanes coverages. Airlines and operators need Aviation Liability Insurance for passenger and cargo claims. Airports and airport operators require Airport Operations insurance. Existing systems and emerging technologies, such as drones, necessitate Cybersecurity insurance. Additionally, Aviation Repair and Maintenance facilities require specific coverage. Overall, the market offers comprehensive protection for the aviation sector.
It encompasses various insurances designed to cover the unique risks associated with the aerospace industry. These include aircraft manufacturers, airlines, and space companies. Passengers, cargo, and airport risks are also covered. Passengers are insured against injury or death, while cargo is insured against loss or damage during transport. Aircraft and spacecraft are insured against physical damage or destruction. Emergency response and liability coverage are essential components of aerospace insurance policies. Modernization, innovation, and advances in technology continue to shape the market. Airline insurances cover operational risks, while space insurances cover launch and in-orbit risks. Umbrella policies provide additional coverage for catastrophic events. Airlines, airports, and air cargo companies require adequate insurance coverage to operate. The importance of insurance in the aerospace industry cannot be overstated.

By End-user 

The service providers segment will account for a significant share of market growth. This segment comprises insurance availed by airlines, helicopters, and business jet operators. Airline risk is attractive to underwriters due to the large premium levels generated. This helps underwriters in achieving their income targets. Large losses are rare and impact relatively few underwriters. Therefore, the potential profitability represented by this category of risk is extremely attractive to insurers.

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The service providers segment was valued at USD 2.53 billion in 2017 and continued to grow until 2021. Increasing fleet values and passenger growth will push the value of risk exposure in the future. Improvements in aviation technology, such as the collision avoidance system and terrain awareness and warning system, have increased the safety of the most critical flight phases, such as approach and landing. In-flight entertainment and connectivity and connected crew seats are further enhancing safety and reinsurance programs in aviation. Therefore, increasing fleet values and a rise in passenger numbers are expected to increase the value of risk exposure. Such factors are expected to drive the growth of the service providers segment in the market during the forecast period.

By Type 

The in-flight insurance segment will account for a significant share of market growth during the forecast period. This segment covers damage that might occur in-flight or in every other situation on the ground. This type of insurance is comparatively expensive insurance for buyers. Insurers provide different coverage schemes for in-segment at high premium rates. The segment covers any damages that may be sustained while the plane is in motion. The demand for this segment is rising significantly due to the increasing incorporation of high-tech avionics and in-flight systems. Pilots have access to information, including more accurate and up-to-date weather data. Thus, with the increase in demand for this segment, the segment in the market is expected to witness growth during the forecast period.

Regional Analysis

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Europe is estimated to contribute 64% to the growth by 2027. Technavio’s analysts have elaborately explained the regional trends, drivers, and challenges that are expected to shape the market share during the forecast period.  

Airlines are competing in terms of cost as well as commercial aviation insurance with the rise in passenger traffic. Europe has a mature aerospace industry with advanced technological knowledge, research, and production capabilities. This is attributed to the continuous R&D Investment from the government in the aerospace domain. To cater to the growing demand, airlines in the region are investing in modern avionics and maintaining low operational costs. Major insurance providers in Europe, such as Aon Plc, Swiss Re Ltd., and Zurich Insurance Co. Ltd., are focusing on business strategies such as M&A deals with emerging firms for business expansion and consolidation. Key companies in the region are expected to focus on regionalization and adopt specialization strategies during the forecast period. These factors will improve the efficiency of services, enable product and service innovations, and improve the business scalability of companies.

Segment Overview

The market report forecasts market growth by revenue at global, regional, & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027. 

• End-user Outlook
  • Service providers
  • Airport operators
  • Others

• Type Outlook
  • In-flight insurance
  • Public liability insurance
  • Passenger liability insurance
  • Others

• Region Outlook
  • North America
    • The U.S.
    • Canada
  • Europe
    • The U.K.
    • Germany
    • France
    • Rest of Europe
  • APAC
    • China
    • India
  • Middle East & Africa
    • Saudi Arabia
    • South Africa
    • Rest of the Middle East & Africa
  • South America
    • Argentina
    • Brazil
    • Chile

Market Analyst Overview

The market serves clients involved in aviation, offering hangars of benefits within the insurance industry. It specializes in underwriting aviation risks, adhering to stringent solvency standards. Insurance pools mitigate catastrophic catastrophes, including terrorist attacks, ensuring compliance with aviation safety laws. Price and coverage are pivotal considerations in this sector, influencing tourism trends. The market is a vital component of the aviation industry, providing coverage for a wide range of risks encountered by aircraft operators and stakeholders. With commercial air travel on the rise and the proliferation of drones and autonomous flight systems, insurers are adapting to cover emerging challenges such as cybersecurity threats and wildfires. Moreover, as existing airports undergo modernization and new airports emerge, there's a growing need for policies that address hangar and ground support equipment insurance. Aerospace insurers cater not only to airlines and airports but also to individual general aviation aircraft operators, leasing companies, and air taxi operators, offering comprehensive coverage to safeguard the interests of all stakeholders in the aviation industry.

With the integration of the Internet of Things (IoT), insurers assess risks more accurately, especially concerning bodily injury, medical costs, and loss of income. Additionally, factors such as the increasing demand for travel and tourism contribute to market expansion. Other key elements of aviation fueling growth include line maintenance, which ensures the smooth operation of aircraft, and the adoption of insurance solutions like Ground Risk Hull (Motion) and Ground Risk Hull (Non-Motion) insurance, along with Combined Single Limit (CSL) and Hangar & Ground Support Equipment insurance. These factors collectively shape the trajectory of the aviation product liabilities market, fostering its development amidst evolving industry dynamics. This technological advancement enhances risk management strategies, ensuring comprehensive coverage for clients. In the market, insurers navigate complex risk landscapes, safeguarding the interests of aviation stakeholders worldwide. The industry continually evolves to adapt to emerging risks and regulatory changes. Insurers leverage data analytics and predictive modeling to assess risks effectively, maintaining solvency and providing competitive coverage options. As aviation remains integral to global commerce and transportation, the market plays a vital role in promoting safety and stability within the industry.

Aerospace Insurance Market Scope
Report Coverage	Details
Page number	181
Base year	2022
Historic period	2017-2021
Forecast period	2023-2027
Growth momentum & CAGR	Accelerate at a CAGR of 4.36%
Market growth 2023-2027	USD 763.67 million
Market structure	Fragmented
YoY growth 2022-2023(%)	4.1
Regional analysis	Europe, North America, APAC, Middle East and Africa, and South America
Performing market contribution	Europe at 64%
Key countries	US, China, Japan, UK, and France
Competitive landscape	Leading companies, Market Positioning of companies, Competitive Strategies, and Industry Risks
Key companies profiled	Ace Aviation, Allianz SE, American Financial Group Inc., American International Group Inc., Aon plc, Arthur J. Gallagher and Co., Avion Insurance Agency Inc., AXA Group, Berkshire Hathaway Inc., BWI Aviation Insurance Agency Inc., Chubb Ltd., Global Aerospace Underwriting Managers Ltd., Hallmark Financial Services Inc., London Aviation Underwriters Inc., Marsh and McLennan Companies Inc., Munich Reinsurance Co., Starr International Co. Inc., Tokio Marine Holdings Inc., Wells Fargo and Co., and Willis Towers Watson Public Ltd. Co.
Market dynamics	Parent market analysis, Market growth analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for the forecast period
Customization purview	If our market research and growth report has not included the data that you are looking for, you can reach out to our analysts and get segments customized.

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What are the Key Data Covered in this Market Research Report?

• CAGR of the market during the forecast period
• Detailed information on factors that will drive the market growth and forecasting between 2023 and 2027
• Precise estimation of the size of the market and its contribution to the parent market
• Accurate predictions about upcoming market trends and analysis and changes in consumer behavior
• Growth of the market across Europe, North America, APAC, Middle East and Africa, and South America
• A thorough industry analysis of the competitive landscape and detailed information about companies
• Comprehensive market analysis and report of factors that will challenge the growth of market companies

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