Aviation Claims Soar Due to Collisions and Crashes, Reports Allianz

A recent report by Allianz Commercial reveals that collisions and crashes constitute over half of aviation insurance claims by value and a third by number over the past five years. The report analyzed over 30,000 claims valued at $15 billion, highlighting key trends and factors influencing the aviation insurance sector.

Faulty workmanship and defective products rank as the second top cause of claims both by value and frequency, followed by natural catastrophes. Additionally, travel issues such as property damage, personal injury, and baggage claims rank third by number. The report also identifies significant causes such as fire and slip and fall incidents.

Aircraft repair costs have surged due to increased labor rates, cost of aircraft parts, and inflation. The shift to next-generation aircraft has further impacted claims, particularly in engine disassembly and repair costs. The cost of certain aircraft spare parts has increased by 10% to 15%, resulting in more aircraft being deemed Constructive Total Losses (CTLs). Supply chain issues exacerbate the situation, affecting delivery times for mechanical and avionic components.

Ground handling claims have also risen, involving towing, fueling, catering, and wheelchair services, as well as vehicle collisions on the tarmac. Pandemic-related layoffs have led to inexperienced new hires, contributing to these claims.

Allianz Commercial has observed a shift in common claims, with a decrease in air rage and animal-related incidents post-pandemic. Future claims may be influenced by a shortage of aircraft mechanics and increasing demand for helicopter sightseeing trips and getaways.

Scott Jones, director of transportation and logistics claims at Veritas Administrators, LLC, emphasizes the need for expert third-party resources to manage the rising costs and unique risks, such as runway incursions and GPS interference, that aviation companies face.