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Recent Developments in the Aviation Insurance Industry
Author(s) -
Flouris Triant,
Hayes Paul,
PukthuanthongLe Kuntara,
Thiengtham Dolruedee,
Walker Thomas
Publication year - 2009
Publication title -
risk management and insurance review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.386
H-Index - 16
eISSN - 1540-6296
pISSN - 1098-1616
DOI - 10.1111/j.1540-6296.2009.01165.x
Subject(s) - aviation , safer , business , dilemma , insurance industry , actuarial science , general insurance , insurance policy , engineering , computer security , computer science , philosophy , epistemology , aerospace engineering
The aviation industry has been hard hit in recent years. While there are numerous factors that have contributed to the industry's dilemma, rising and volatile insurance premiums—particularly after the events of 9/11—have posed a particular problem for many airline managers. Despite a general trend for accident rates involving commercial passenger airplanes to decrease as aviation technology has advanced over the years and airplanes have become safer, the aviation insurance market has been far from stable. This article provides an overview of how the aviation insurance industry works and how it has changed in recent years. We take a look at how the risk is spread between insurers, how insurers treat deliberate acts of violence, and lastly, how insurers price the risk. Our article shows that the aviation insurance market has undergone considerable changes in recent years and that it has adjusted to the post‐9/11 aviation insurance realities being reasonably ready to handle events of an even more catastrophic magnitude.