This archive report was first published on 22 September 2019.
Published on September 22, 2019, aviation industry executives warned of double-digit insurance premium hikes for the first time in about 15 years.
The industry has been experiencing gradual growth in rates since 2017, but the recent grounding of Boeing's 737 MAX jets has put further pressure on rates.
According to Global Aerospace executive Simon Abbott, the level of increases has picked up since the MAX losses, with single-digit increases becoming double-digit this year.
Global Aerospace, a joint venture of Munich Re and Berkshire Hathaway, was the lead insurer on Boeing, and another industry source confirmed that there is plenty of evidence of double-digit hikes.
It is unclear whether airlines are passing on the costs of higher premiums to passengers, but the International Air Transport Association (IATA) declined to comment.
Global Aerospace secured a 59 per cent rate hike from Indonesian carrier Lion Air, which operated one of the two MAX jets that crashed.
The crashes led to the jet's grounding over an anti-stall system, and insurers face claims from interruption to airlines' businesses during the grounding, which Boeing expects to end early next quarter.
