Against all the odds the aviation market is still booming.
The thwarted terrorist plan to blow up a number of aircraft travelling between the UK and the US has done little to dampen enthusiasm for the aviation market. September heralded the arrival of two new London operations, including broker Oxygen Re, which will include aviation treaty reinsurance in its portfolio. This follows the August launch of new war exclusion and write-back clauses from the London-based Aviation Insurance Clauses Group.
On the launch of its reinsurance division, Nigel Barton, chief executive officer of Oxygen Holdings said, “We have focused on this sector as we feel there is a seismic shift taking place in the reinsurance sector at the moment. Our aim is to build a progressive and enterprising alternative in the reinsurance market.”
Meanwhile, QBE added an aviation syndicate to its Lloyd's portfolio a month ahead of schedule. Steven Burns, CEO of QBE's European operations, was confident that the new operation would not detract from Limit's (the Lloyd's division of QBE's European business) aviation reinsurance interests. “Limit has been a leading London market aviation reinsurer for some years. Whilst the direct aviation sector has clearly benefited from unusually low loss activity in recent years, we believe that market is now showing much greater stability and underwriting discipline than it has historically.”
Meanwhile Flagstone Re and Sirius International Insurance announced from Bermuda they were “delighted to have established an agreement to underwrite aviation reinsurance.” Mario Montelatici, of the Sirius Zurich office, will underwrite excess-of-loss aviation reinsurance business on behalf of Flagstone Re with immediate effect.
Mark Campe, aviation business unit head for JLT Re, said the market had viewed the recent Flagstone Re underwriting agreement with Sirius as a good example of new capacity backing a market practitioner, namely Mario Montelatici, who has a responsible and proven track record in the aviation reinsurance arena. He said the “Class of 2005” Bermudian reinsurers began with non-marine property catastrophe business as their main core business, but as time moves on it is only natural that they would look to diversify.
Aviation has been viewed as quite an attractive class since 9/11, due to the benign major loss experience. The recent airline terrorism threat did not cause an immediate reaction in the London marketplace, he added. “Whilst underwriters were extremely concerned about the potentially horrific consequences of such a threat, it has not caused a market re-evaluation of clauses/coverage's at this time.”