Insurances for helicopters

How to be successful in a dynamic market with less options and raising prices. Over more than one decade prices for insurance policies only knew one direction – going down. Since 2019 this trend has clearly turned.

Another threat for the prices arises from the withdrawal of more than 10 underwriters in the aviation sector since 2017. This not only means that there is less competition in the market but the signed risks are more often split amongst different parties instead of being 100% within one underwriter. And the helicopter business faces another challenge due to their versatility.

Helicopters are a special piece in the aviation sector. Often they are described as a “Swiss pocket knife” as they can fulfil so many different missions and especially commercial operators are able to work in different sectors with the same machine. This is a great advantage but also a potential risk for the owners.

The prices for insurances had almost a decade of going down from 2007 until 2017. The main indicator and driver for rates are the airliner business. 2017 itself was the safest year on the record of the airline industry. But then the Boeing 737max story changed the picture. As 2007 until 2017 had been an unprofitable period for many insurance companies they already had taken the decision to pull out of the aviation sector and the remaining ones now have less “risk appetite”.

The helicopter mainly relies on a main gear, the engine and the rotor. This may sound as a “simple truth” but is an important difference to other aircraft. If one of this elements fails very often the whole machine is endangered by a heavy damage or even a complete loss. As the majority of the helicopter companies in Europe do operate a small number of machines the whole business model is linked to maybe just one or two machines. This enlarges the threat or the risk – for the operator but also for the underwriter. The consequence: Meanwhile the signed risks are split over several parties in the rotorcraft segment.

The challenges for a successful broker are to have a deep understanding and relationships with the different insurances companies to achieve a fair rate with the remaining companies and the task to split the risks. Beside, he must be a service provider and a consultant for his customers. First the right insurance package for each client has to be tailored. One operator might use his “work horse” for flight school purposes, passenger transports or even aerial work missions. All these activities require different insurances. Beside liability-/ hull-/ accident-insurances some special products might be helpful like engine-breakdown or spare-parts insurance. But also a doubling or tripling of protection by the different contracts shall be prevented.

Second if there is a claim to be managed the broker turns into a “business angel”. That means delivery of a first analysis within 24 hours shall be provided and always one dedicated contact person working on the case. Reactivity is of extreme importance as in quite a few companies “helicopter on ground” means significant losses and massive impacts up to endangering of the whole business. Immediate answers and solutions are key for the customer. And in the event of loss, it needs quick and reliable communication with the surveyors, repair shops and also the right legal experts to be of help. “Time is money” to bring the customer and its business back in the air as soon as possible.

PETER H. BRAASCH, family business since 1971 is your insurance expert for all types of business in the rotorcraft and fixed wing sector. Get in touch with us according to our message: “You rotate – we protect”.

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