Expansion in Existing Fleet and Launch of New Airlines to Sustain the Global Aerospace Insurance Market Through 2020, Says Technavio

Business Wire

LONDON--(BUSINESS WIRE)-- According to the latest market study released by Technavio, the global aerospace insurance market is expected to generate revenues of around USD 3 billion over the forecast period due to the procurement of new aircrafts.

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Technavio publishes new market research report on the global aerospace insurance market from 2016-2020. (Graphic: Business Wire)

This research report titled ‘Global Aerospace Insurance Market 2016-2020’ provides an in-depth analysis of the market in terms of revenue and emerging market trends. This market research report also includes an up to date analysis and forecasts for various market segments and all geographical regions.

According to Avimanyu Basu, a lead analyst at Technavio for aerospace components research, “The global aerospace insurance market will witness a slight decline in its growth rate until 2017 due to declining premium prices. However, from 2018, this market is expected to grow steadily due the procurement of new aircraft and this will generate revenues of around USD 3 billion over the forecast period.”

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The report categorizes the global aerospace insurance market into three major end-user segments. They are:

Service providers
Airport operators
Others

Service providers

Technavio expects the global aerospace insurance market for service providers to decline slightly, posting a declining CAGR of 0.5%.

The insurance premium paid by the service providers and business jet and helicopter operators in FY2015 has decreased as compared to FY2014. This is due to the decreasing costs of premiums and increasing higher claims. In 2015, the total claims for the airline industry stood at USD 1.5 billion, whereas the total premium paid stood at only USD 1.3 billion.

Airport operators

The global aerospace insurance market for airport operators is expected to witness growth from 2017, with several new airports coming into service across the world. As of 2014, there were over 2,300 airport construction projects under development or renovation, globally.

APAC has over USD 115 billion worth of airport projects in progress or in the planning stage, which are likely to be completed soon. This gives the aerospace insurance companies a huge opportunity to expand their business in emerging markets such as China and India. For instance, in December 2015, the Indian government gave clearance for the construction of four greenfield airports (one in Gujarat and three in Andhra Pradesh). Also, China recently made 55 new airports operational and is constructing a new airport in Beijing, which is expected to be completed by 2018.

Global aerospace insurance market: Others

The growth in MRO services has a positive impact on this segment. These services are provided either by the in-house department of an airline company or by aircraft operators. However, in the last few years, airline companies have started outsourcing these MRO activities to independent third parties. This makes the market attractive for new vendors.

Airline companies and aircraft manufacturers opt for aerospace insurance due to the various risks associated with MRO activities such as damage to aircraft while the aircraft is under the control and care of the MRO service provider either on the ground or during test flight. “The growing MRO activities will help in the growth of this segment with more service providers opting for new insurance policies,” says Avimanyu.

The top vendors highlighted by Technavio’s aerospace and defense research analysts in this report are:

Allianz
American International Group (AIG)
Aon
Hallmark Aerospace Insurance Managers
Marsh
Old Republic Aerospace

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