Allianz: $15B in Aviation Insurance Claims Dominated by Crashes and Collisions

An analysis of 32,000 aviation industry claims over five years shows crashes and collisions account for well over half the value of all claims.

Allianz Commercial’s Aviation Risk, Claims and Insurance Outlook examines an aviation industry beleaguered in recent years by big events like COVID-19, the energy crisis and Russia’s war.

The outlook takes a positive note with record safety results in 2023 and a growing volume of air passengers, yet it calls out some ongoing challenges.

One third of the total volume of aviation industry claims over a five-year period from 2019 to 2024 were crashes and collisions, which account for 63% of the value of all claims, the report shows.

Claims over that period were valued at $15 billion (€14bn). Following collision or crash incidents, faulty workmanship or defective products were accountable for 22% that value. Natural catastrophes (4%), machinery breakdown (3%) and fire (1%) accounted for a much smaller proportion of claims by value, according to the report.

As with other sectors, inflation has factored into claims values, the report notes.

“There has been a significant increase in aircraft repair costs in recent years, driven by higher labor rates and the cost of aircraft parts, among other factors, such as inflation,” the report states. “The shift to next generation aircraft continues to impact claims, especially when it comes to engine disassembly and repair costs.”

According to the report, claims costs related to certain aircraft spare parts increased by 10% to 15% in recent years, resulting in a greater number of aircraft being deemed total losses.

Other claims challenges called out in the report include supply chain issues, a shortage of aircraft mechanics and a growing demand for helicopter sightseeing trips and getaways.

Runway incursion incidents, such as taking off or landing without clearance, are also on the rise. Over the last decade in the U.S. the rate of incursions per 1 million takeoffs and landings rose from 25 to over 30. Airports are becoming busier as global air passenger volume is expected to hit an all-time high in 2024—traffic is up 10.4% year-over-year—so there is increasing scrutiny on what is being done to manage the risks, the report notes.