I am not an insurance expert.  In another life I was involved with a bunch of insureds getting screwed with premiums (not aviation) and they got together, formed an offshore entity, funded future years of premiums into a pool and provided their own self-insurance for 7 years.    Umbrella limits were covered with re-insurance cheaply and when the premiums from the insurers eventually dropped, the pool was refunded to the group making the whole thing a profitable venture.

Are you paying too much and did that accident cost you something?   I looked at doing the same thing with TBMs where new owners were getting dinged 25-40k per year.   We looked at 50 owners, 7 years of committed premiums and an offshore entity to grow the premiums tax free.  Stats told us to expect at least two casualties over the period of coverage.  To minimize risk we would require SIMCOM, 500 hours minimum, 50k deductible and some other features. The analysis said that if losses were expected, owners would get back more than half their premiums in time and those premiums would have been far less than industry norms.  The fleet wasn't big enough yet and premiums did start to come down so it was shelved.  Owners did not like the idea of funding future premiums even if they were expected to be refunded.

Premiums cycle like commodities because risk appetite is a commodity.  At no time, did anyone in the industry spend money to actively reduce the risk level.  They simply adjusted premiums to make the business viable.  Premiums are largely independent of the asset IMO.   I tested a number of insurers on aircraft with widely varying hull values and the premium was the same.  When pushed for an answer, the bottom line dollars was the goal.

If someone took all the IV owners (only IVs as example) and culled them into a group, determined the risk scenario for next 7 years and calculated the annual premiums paid versus what a pool size would need to cover, that would tell you if you're getting a deal or getting shafted.  I suspect premiums are probably a "deal" at the moment based on the numbers being tossed around here but it wouldn't take a lot of effort to figure it out.  When you do that, you will realize that you can't stop the riskier IVs from flying, you can only prevent them from getting into your pool.  So, the end result will be the same in terms of accidents but perhaps one insurer will make money and another may not.  Even if the fleet turned safer this year and next, it would take many more years of safer stats to make a difference but I really don't think your premiums are going to be affected by the good news as opposed to simply better market conditions for risk.  My point is that blaming any individual owner for raising rates is nonsense.   Those rates are already baked into the fleet and the industry and largely determined by the level of risk appetite in the world and the ability of insurers to lay off that risk onto third parties.  Accidents are always blamed for premium increases.  Nobody gets credit for not having that accident because the risk is still there.

Good to hear some companies are participating in safety.  None of the insurers I worked with ever participated in any programs whatsoever like that.

Paul
Legacy
Spruce Creek