The aerospace insurance market is poised for growth, with an expected increase of US$763.67 million from 2022 to 2027. During this forecast period, the market is projected to advance at a compound annual growth rate (CAGR) of 4.36%.
A new report from Technavio revealed that this market is categorised by end-user segments including service providers, airport operators, and others, and by types such as in-flight insurance, public liability insurance, passenger liability insurance, and more. Geographically, the market spans across regions like Europe, North America, Asia-Pacific, the Middle East and Africa, and South America.
Key players in the market include Ace Aviation, Allianz SE, American Financial Group, AIG, Aon, Arthur J. Gallagher and Co., Avion Insurance Agency, AXA Group, Berkshire Hathaway, BWI Aviation Insurance Agency, Chubb, Global Aerospace Underwriting Managers, Hallmark Financial Services, London Aviation Underwriters, Marsh and McLennan Companies, Munich Reinsurance, Starr International, Tokio Marine Holdings, Wells Fargo and Co., and WTW.
The market is also characterised by its fragmented nature, and it is anticipated to observe a 4.1% year-over-year growth in 2023.
A key driver for this market growth is the ongoing expansion and construction of new airports. The airline industry is witnessing a surge in air passenger traffic, leading to the development of new terminals. The Asia Pacific region, along with the Middle East and Africa, is particularly focused on establishing new airports to ease traffic congestion and accommodate the rising passenger numbers.
One notable trend in the aerospace insurance market is the evolution of non-airline aviation services. Commercial airlines are currently grappling with various challenges such as heightened security checks, frequent cancellations, delays, and restrictions on routes. These issues, particularly evident at major hubs, are influencing the commercial aviation insurance market.
However, the market faces a significant challenge in the form of limited awareness and delayed aerospace insurance services. Insurers typically offer medium-to-long-term coverage, but the slow processing of claims, especially those involving multiple offshore utilities, has weakened confidence in travel insurance products. This erosion of trust has led to reduced investment in travel insurance services by airline operators and travellers, subsequently impacting demand.
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