London market carrier Brit has ceased writing aviation business.
As a reflection of the ongoing challenges seen in the global aviation insurance marketplace, Brit have announced that they have stopped accepting all aviation risks with immediate effect but will continue to underwrite space risks.
We understand that Brit’s decision to exit the class of business is in response to its Lloyd’s syndicate business forecast planning process. The aviation retreat is thought to be the only significant change within Brit’s 2019 business plan.
Brit’s move follows a decision in May to close its general aviation (GA) book of business.
As with prior announcements, we will keep you updated of any further market developments, however, if there is any impact on your policies, we will be in contact with you directly to discuss in further detail.
There has been further consolidation in the Aviation Insurance market.
W.R.Berkley has decided to exit the Aviation line of business. This exit will be conducted over the next few months and will be in line with all state regulations and notice requirements.
During the period of run off, Berkley Aviation will honour all outstanding quotes and continue to service all of its Aviation business.
We will keep you updated of any further market developments, however if there is any impact on your policies we will be in contact with you directly to discuss in further detail.
Lloyd’s have provided a summary of their Results and Financial Highlights for Analysts in March 2018.
A high level overview is that 2017 has been a difficult year in which Lloyd’s have seen their Combined Operating Ratio slip from 97.90% in 2016 to 114.0%.
Drivers to this have been the continuing downwards pricing trends and exposure to the large catastrophe losses of 2017. Lloyd’s exposure to these catastrophe losses at this stage is estimated to be US$6B.
Lloyd’s average annual losses in this large loss sector during the preceding last 15 years has been just over US$2B. Whilst clearly impactful in 2017, Lloyd’s Combined Operating Ratio assessment of all of the business classes shows all of them to be running in excess of 100%.
The above said, Lloyd’s Central Fund has benefited from good investment returns and Lloyd’s retains healthy net resources after seeing growth of their Central assets by 4% from 2016 to 2017.
With Aviation Loss Ratio’s above 100%, we can expect insurers to impose premium increases into the future.