Aviation Insurance Market Size, Share and Trends Analysis, By Insurance Type, By Policy Type (Third-party liability insurance and First-party insurance), By Application (Commercial Aviation Insurance and General and Business Aviation Insurance), By End-Use, and By Region, Forecast 2024-2031

Global Aviation Insurance Market Overview and Key Insights:

The global aviation insurance market size reached USD 3.97 Billion in 2023 and is expected to register a revenue CAGR of 6.3% during the forecast period. Aviation insurance often covers both physical damage to the aircraft and legal responsibility stemming from its ownership and operation.

Market Drivers:

Increased air travel demand is a key driver of revenue growth in the global Aviation Insurance market. According to the Air Transport Action Group (ATAG), in 2023, the world’s airlines transported 4.4 billion passengers (1.8 billion international and 2.6 billion domestic). The prediction for 2024 is 5 billion passengers. In 2023, there were 35.3 million scheduled commercial flights globally. Airports handled around 96 million aircraft movements. Passengers flew 8.17 trillion revenue passenger kilometres (RPK) in 2023. In Europe, passenger traffic is expected to reach 2.3 billion in 2023. The number of passengers is predicted to reach 2.5 billion by 2024. After returning to pre-pandemic levels the following year, passenger traffic is predicted to reach 2.7 billion by 2025.

Furthermore, advancements in aircraft technology is also another key driver driving the market growth. Over the last half-century, material sciences, technology, and aerodynamics have advanced dramatically, allowing for the development of lighter, stronger materials capable of generating lift while also withstanding the rigours of long-haul flight. The insurance industry is prepared to support this transformation, and it is skilled at assisting airlines and aerospace firms in defining, quantifying, and managing shifting risk profiles. The aviation sector has a long history of exhaustively testing technological innovations before they become mainstream, and effective regulatory control promotes trust and gives insurers confidence to support change.

Market Opportunity:

Rising space exploration activities acts as an opportunity for the global Aviation Insurance market. Advances in blockchain technology, artificial intelligence (AI), 3D printing, materials science, nanotechnology, and biotechnology have resulted in two key trends: lower launch costs and increased capabilities of smaller satellites, both of which are leading to new capabilities for exploration and a direct benefit to society on Earth. Reusable rockets are also becoming a reality, making trips to lower Earth orbit more sustainable and accessible in the future for individuals and companies in industries ranging from pharmaceuticals to energy, which may eventually operate there to take advantage of microgravity and other physical characteristics. On November 2024, SatVu, a global pioneer in climate technology, has raised GBP 20 million in strategic finance, which includes a GBP 10 million landmark equity round co-led by European venture capital company Adara Ventures and previous investor Molten Ventures, as well as an insurance payout. This is the first investment from the newly launched Adara Ventures Energy Fund, which is dedicated to fuelling ground-breaking technologies that will drive Europe’s energy revolution.

Recent Trends:

Recent trends include the demand for Insurtech and AI integration, decarbonization and sustainability, and recent developments in aviation sector.

Insurtech and AI integration is a recent trend in Aviation Insurance market. Continued improvements in artificial intelligence (AI) and machine learning will help automate activities like as document screening, categorization, and digital filing. Beyond efficiency and innovative goods, insurtech has the ability to improve the customer experience. Purchasing and using insurance products is frequently seen as complicated and time-consuming processes. However, insurtech can make these operations more intuitive and speedier, leaving clients pleasantly pleased by the simplicity of the processes.

On March 2024, Insurwave, an insurtech platform, has announced a new cooperation with specialty re/insurer Inigo. In this collaboration, Inigo will use Insurwave’s cutting-edge technology and industry expertise to create and maintain a real-time summary of total risk exposure across its portfolio. This is especially important given the growing global unpredictability and financial volatility.

Restraints & Challenges:

Existing backlogs in aircraft production pose a significant hurdle to the Aviation Insurance market. According to the International Air Travel Association (IATA), aircraft deliveries have dropped considerably since a peak of 1,813 aircraft in 2018. The estimated number of aircraft deliveries in 2024 is 1,254, a 30% decrease from the previous year’s forecast. Deliveries are expected to climb to 1,802, significantly below the previous estimate of 2,293 deliveries, with further negative adjustments in 2025 widely regarded as plausible. Airlines’ scarcity of skilled pilots and mechanics has improved slightly over the last year, thanks to partnerships with training centers and universities around the country. However, training for general aviation pilots continues to suffer due to a scarcity of training venues, classroom capacity, and instructors, resulting in delays and long wait times.

Insurance Type Segment Insights and Analysis:

Based on the Insurance type, the aviation insurance market is segmented into Public Liability Insurance, Combined Single Limit (CSL), Ground Risk Hull (Motion) Insurance, Ground Risk Hull (Non-Motion) Insurance, Hangar and Ground Support Equipment Insurance, In-Flight Insurance, and Others.

Public Liability Insurance segment contributed largest share in 2023. Public liability protects aircraft owners from damages their aircraft may cause to third-party property like as buildings, equipment, airport facilities, crops or property on the ground, as well as damage to other aircraft damaged by a collision. Passenger legal liability insurance, like third-party legal liability insurance, is typically closed alongside hull insurance for the same aircraft under the same policy. The insurer normally determines the amount of premium for passenger legal liability insurance by considering, among other things, revenue passenger miles (RPM), which are typically twelve months’ worth of passenger miles in the aircraft in question. This insurance has a limit of indemnity in terms of bodily injury for everyone on each aircraft/accident, as well as a limit of indemnity in terms of baggage and personal items.

Hangar and Ground Support Equipment Insurance segment is expected to have highest growth rate throughout the forecasted period. Aircraft insurance is primarily intended to protect the aircraft during operational use, but it also covers specific aircraft components that are exceedingly expensive. Aircraft insurance is largely concerned with the aircraft in operation. When an airplane is static in a hangar, its insurance coverage decreases, making adequate hangar insurance essential. Aside from airliners and select charters, the bulk of aircraft spend their lives in the hangar. Hangars, as man-made structures, are vulnerable to natural calamities like wind, flood, and fire. Hangars are also considered industrial facilities because they store machinery and their many tools, fluids, and parts. Hangar insurance protects not just the aircraft hull but also the tools and ground support equipment.

Application Segment Insights and Analysis:

Based on the Application, the aviation insurance market is segmented into Commercial Aviation Insurance and General and Business Aviation Insurance.

Commercial Aviation Insurance segment contributed largest share in 2023. Commercial aviation insurance is a particular sort of coverage that protects airlines, charter services, cargo flights, and other commercial aviation operations. This insurance covers the special hazards associated with operating large airplanes, transporting people, and handling high-value cargo. On August 2024, Skyward Specialty Insurance Group, Inc., a market leader in specialty property and casualty (P&C), has collaborated with Acceleration Aviation Underwriters, Inc. to provide comprehensive coverage options to a variety of aviation-related enterprises. Skyward Specialty and Acceleration Aviation have formed a cooperation to create a robust program that covers commercial and general aviation aircraft, fixed-based operators, flying schools, public and private airports, and a variety of other aviation organizations.

General and Business Aviation Insurance segment accounted for the fastest growth rate during the forecasted period. General aviation remains the principal entrance route for pilots, ground workers, and air traffic controllers, ensuring a steady pipeline for the bigger business. Furthermore, the insurance industry is constantly watching developments in aviation technology, such as electric vertical take-off and landing (eVTOL) aircraft and regional hybrid-electric planes. As these advances become more commercially viable, they are expected to influence the insurance needs and risk profiles of general aviation clients in the future. On June 2024, Chubb has signed a definitive agreement to purchase Catalyst Aviation Insurance, a Melbourne-based managing general agent specializing in general aviation insurance for the Australian market. The addition of Catalyst Aviation would increase Chubb’s presence in an important aviation market, providing local market access for brokers and clients while also broadening the reach of Chubb Global Markets’ aviation insurance products and capabilities, which include its Lloyd’s platform.

End-Use Segment Insights and Analysis:

Based on the end-use, the aviation insurance market is segmented into Aircraft and Aerospace Manufacturers, Ground Operators, Individual General Aviation Aircraft Operators, Air Taxi Operators, and Others.

Aircraft and Aerospace Manufacturers segment contributed largest share in 2023. In recent years, airplane repair prices have risen significantly, owing to increasing labor rates and the cost of aviation parts, among other variables, including inflation. The transition to next-generation aircraft continues to affect claims, particularly engine disassembly and repair costs. Furthermore, a rising scarcity of airplane mechanics may affect future claims action.

On December 2024, AXA Hong Kong and Macau (AXA) and HK Express Airways (HK Express), with the cooperation of AXA Partners, have announced the availability of complimentary flight delay parametric insurance for HK Express customers who purchase U-First. This makes HK Express the first airline in Asia to provide parametric delay benefits. U-First has always provided priority check-in and quick boarding, and it now offers flight delay protection to eligible travelers who purchased U-First at least 48 hours before their scheduled departure.

Ground Operators segment accounted for the fastest growth rate during the forecasted period. According to the US Federal Aviation Administration (FAA), over 170 airplanes were grounded worldwide for almost three weeks, which might have consequences across the supply chain and generate the possibility of huge and complex claims under Grounding Liability Insurance. The insurance steps in when a recognized airworthiness authority issues an Airworthiness Directive (AD) due to safety concerns. Grounding Liability Insurance has come under more scrutiny, both in terms of the terminology used to establish the policy and the allowable levels. The IATA Standard Ground Handling Agreement (SGHA) is the most widely used ground handling services agreement. Article 8 of this agreement restricts the handling company’s liability for aircraft damage to the deductible specified in the operator’s Hull All Risks insurance policy, up to a maximum of USD 1,500,000.

Geographical Outlook:

North America is registered highest market share in aviation insurance market in 2023. The regional market is driven by the increase in air travel and technological advancements in aircraft technologies. The FAA’s Air Traffic Organization (ATO) serves more than 45,000 flights and 2.9 million airline passengers across more than 29 million square miles of airspace. For the first time since COVID-19, global passenger traffic is expected to exceed 9.7 billion passengers in 2024, accounting for 106% of the 2019 total. On July 2024, Worldlink Specialty has collaborated with Oneglobal Broking to launch “AeroPRO,” a comprehensive professional liability insurance product designed specifically for the US aviation and aerospace sectors. This solution is intended to guide clients through the complexity of professional liability insurance. It serves a diverse spectrum of professionals and enterprises, including consultants, advisory services, engineers, auditors, design firms, airline operations, and sales and distribution companies.

Asia Pacific is registered the fastest growth rate during the forecasted period. Asia Pacific is developing as a major region growth in aviation insurance due to the development in the aerospace sectors, increase in industrialization, and favourable government policies. Airline insurance coverage cover aircraft loss and damage due to accidents, wars, or natural disasters. Policies also cover passenger liability and third-party claims resulting from such accidents or events. On January 2023, New India Assurance has announced unmanned aircraft system (UAS/UAV/RPAS/Drone) insurance, which will cover everything from huge planes to solo gliders. Coverage will be provided to drone owners, operators, and manufacturers. The product offers over 15 different add-on covers for clients to choose from. These add-on covers are specifically designed to meet the needs of the drone industry.

Europe is to register a considerable market share in aviation insurance market in 2023. Government initiatives and rising awareness and risk management are key factors driving the region’s revenue growth. Aircraft repair prices have skyrocketed in recent years due to rising labour rates, increasing parts costs, and inflation. On February 2023, WTW, a major worldwide consulting, broking, and solutions firm, has created the WTW Aviation Safety Partnership, which provides specialized safety risk mitigation assistance to general aviation and rotor wing clients. WTW’s Aviation Safety Partnership addresses the needs of frontline general aviation operations by combining a better grasp of the industry risk landscape and insurance market trends with extensive safety and operational knowledge.

Competition Analysis:

The aviation insurance market is characterized by a fragmented structure, with several players competing across various segments and regions. List of major players included in the aviation insurance market report are:

• Arthur J. Gallagher & Co.
• AXA SA
• Allianz Commercial
• Marsh LLC
• Global Aerospace
• Great American Insurance Group
• Munich Re
• Chubb
• IAT Insurance Group
• L&G Insurance
• Wings Insurance
• ScienceSoft USA Corporation
• American International Group, Inc.
• STARR International Company, Inc.

Strategic Developments in Aviation Insurance Market:

• In May 2024, Tata AIG, India’s top general insurance provider, has announced the launch of India’s first Satellite In-Orbit Third-Party Liability Insurance policy, which will provide crucial financial protection to the expanding needs of satellite manufacturers and operators in the Indian space industry. Tata AIG’s new insurance package provides full coverage for third-party bodily injury and property damage in the case of an incident involving a satellite in orbit, in accordance with international standards and best practices.
• In May 2024, Concirrus announced the launch of a groundbreaking solution designed exclusively for the General Aviation insurance industry. This modern collection of skills addresses an urgent need to improve productivity while writing risks in the face of increasing regulatory and procedural complexity for aviation underwriters. The Concirrus platform comes in to reduce this load, lowering submission time from hours to a few minutes, allowing underwriters to focus their resources on value-added activities like risk assessment and portfolio optimization.

Key Advantages for Stakeholders:

Navistrat Analytics’ industry report provides an in-depth quantitative analysis of various market segments, historical and current trends, market forecasts, and dynamics within the global market. The historical years covered in this report are 2021 to 2022, with 2023 serving as the base year for market size calculations. The forecast period extends from 2024 to 2031.

The report includes an executive summary and a comprehensive overview of market drivers, restraints, opportunities, and challenges (DROC), along with insights into regulatory standards. It features detailed analyses such as PORTER’s Five Forces, SWOT, and PESTLE, as well as assessments of technological trends and the competitive landscape.

PORTER’s Five Forces analysis helps stakeholders evaluate the impact of new entrants, competitive rivalry, supplier power, buyer power, and substitution threats, enabling them to assess the level of competition and the attractiveness of the global market. The competitive landscape provides stakeholders with a clear understanding of the current market positions of key players, offering valuable insights into their competitive environment.

Scope And Key Highlights Of The Aviation Insurance Market Report:

 The aviation insurance market report offers a detailed analysis of market size, including historical revenue (in USD Billion) data for 2021-2022 and revenue forecasts for 2024-2031 across the following segments:

• Insurance Type Outlook (Revenue, USD Billion; 2021-2031)
  • Public Liability Insurance
  • Combined Single Limit (CSL)
  • Ground Risk Hull (Motion) Insurance
  • Ground Risk Hull (Non-Motion) Insurance
  • Hangar and Ground Support Equipment Insurance
  • In-Flight Insurance
  • Others

• Policy Type Module Outlook (Revenue, USD Billion; 2021-2031)
  • Third-party liability insurance
  • First-party insurance

• Application Outlook (Revenue, USD Billion; 2021-2031)
  • Commercial Aviation Insurance
  • General and Business Aviation Insurance

• End-Use Outlook (Revenue, USD Billion; 2021-2031)
  • Aircraft and Aerospace Manufacturers
  • Ground Operators
  • Individual General Aviation Aircraft Operators
  • Air Taxi Operators
  • Others

• Regional Outlook (Revenue, USD Billion; 2021-2031)
  • North America
    • U.S.
    • Canada
    • Mexico
  • Europe
    • Germany
    • France
    • U.K.
    • Italy
    • Spain
    • Benelux
    • Nordic Countries
    • Rest of Europe
  • Asia Pacific
    • China
    • India
    • Japan
    • South Korea
    • Oceania
    • ASEAN Countries
    • Rest of APAC
  • Latin America
    • Brazil
    • Rest of LATAM
  • Middle East & Africa
    • GCC Countries
    • South Africa
    • Israel
    • Turkey
    • Rest of MEA

Frequently Asked Questions (FAQ) About The Aviation Insurance Market Report