So, what is next in aviation?

Raffaella Basile, Chief Underwriter Aviation, Swiss Reinsurance Company Ltd AIA Director, Reinsurance Division

What an incredible couple of years our market has been through.

The challenges have been numerous, starting with a substantial deterioration of the reserves from a large aircraft manufacturer loss that is proving to be the largest single event loss in aviation history. The market is also still dealing with the challenges facing aircraft lessors and their aircrafts stuck in Russia and increased risk of war or terror events in the new geopolitical climate. To add to this, we see the continued rise of social inflation in the U.S. and the challenging claim severity trend exposing the liability limits offered in our slips.

What an exacerbation of the status quo. Given the impact of the above on company results, it is understandable to see a harsh price reaction and an increased focus around terms and conditions in the aviation reinsurance market. Reinsurers in general have not been able to cover their cost of capital, and there has been enhanced scrutiny at upper management level on the best use of capital.

Our market is proficient in looking backwards and creating views based on facts and data. The more challenging aspect, however, is to take a forward-looking view of risks based on specific market drivers and being able to read trends and emerging risks early.