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INSURANCE:

Insurance may be described as a social device to reduce or eliminate risk of loss to
life and property. Under the plan of insurance, a large number of people associate
themselves by sharing risks attached to individuals. The risks, which can be
insured against, include fire, the perils of sea, death and accidents and burglary.
Any risk contingent upon these, may be insured against at a premium
commensurate with the risk involved. Thus collective bearing of risk is insurance.
Definitions

General Definition
In the words of John Magee, Insurance is a plan by themselves which large
number of people associate and transfer to the shoulders of all, risks that attach to
individuals.

Fundamental Definition
In the words of D.S. Hansell, Insurance accumulated contributions of all parties
participating in the scheme.

Contractual Definition
In the words of justice Tindall, Insurance is a contract in which a sum of money
is paid to the assured as consideration of insurers incurring the risk of paying a
large sum upon a given contingency.





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Characteristics of Insurance

Sharing of risks
Cooperative device
Evaluation of risk
Payment on happening of a special event
The amount of payment depends on the nature of losses incurred.
The success of insurance business depends on the large number of people
insured against similar risk.
Insurance is a plan, which spreads the risk and losses of few people
among a large number of people.
The insurance is a plan in which the insured transfers his risk on the
insurer.
Insurance is a legal contract which is based upon certain principles of
insurance which includes utmost good faith, insurable interest,
contribution, indemnity, causes proxima, subrogation, etc.
The scope of insurance is much wider and extensive.



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Origin and Development of Insurance


Insurance in the modern form originated in the Mediterranean during 13/14th
century. The earliest references to insurance have been found in Babylonia, the
Greeks and the Romans. The use of insurance appeared in the account of North
Italian merchant banks who then dominated the international trade in Europe at
that time. Marine insurance is the oldest form of insurance followed by life
insurance and fire insurance. The patterns that have been used in England
followed in other countries also in these kinds of insurance. The origin and
growth of Marine Insurance, life Insurance, Fire Insurance and miscellaneous
insurance are given below:
Marine Insurance
Life Insurance
Fire Insurance
Miscellaneous Insurance


1. Marine Insurance

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The oldest and the earliest records of marine policy relates to a Mediterranean
voyage in 1347. In the year 1400, a book written by a merchant of Florence,
indicates premium rates charged for the shipments by sea from London to Pisa.
Marine Insurance spread from Italy to trading routes in other countries of
Europe.

Marine Insurance in India

There is evidence that marine insurance was practiced in India some three
thousand years ago. In earlier days travelers by sea and land were exposed to risk
of losing their vessels and merchandise because of piracy on the open seas.
Moreland has maintained that the practice of insurance was quite common during
the rule of Akbar to Aurangzeb, but the nature and coverage of insurance in this
period is not well known. It was the British, insurers who introduced general
insurance in India, in its modern form. The British opened general insurance in
India around the year 1700. The first company, known as the Sun Insurance
Office Ltd. was set up in Calcutta in the year 1710. This followed by several
insurance companies of different parts of the world, in the field of marine
insurance. In 1972, the government of India nationalized the general insurance
business by forming GIC.


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2. Life Insurance

The early developments of life insurance were closely linked with that of marine
insurance. The first insurers of life were the marine insurance underwriters who
started issuing life insurance policies on the life of master and crew of the ship,
and the merchants. The early insurance contracts took the nature of policies for a
short period only. The underwriters issued annuities and pension for a fixed
period or for life to provide relief to widows on the death of their husbands. The
first life insurance policy was issued on 18
th
June 1583, on the life of William
Gibbons for a period of 12 months.

Life Insurance in India

The British companies started life insurance business in India, by issuing policies
exclusively on the lives of European soldiers and civilians. They sometimes issued
policies on the lives of Indians by charging extra. Different insurance companies
like Bombay Insurance Company LTD. (1793) and Oriental Life Assurance
Company (1818) was formed to issue life assurance policies in India. Gradually,
the first Indian Company named as Bombay Mutual Life Insurance Society Ltd.
was formed in
Dec. 1870. By 1971, the total numbers of companies working in India were 15,
out of which 7 were Indian and the remaining were British companies.

After several changes have been made for the period from 1930 to 1938, the
Government of India passed Insurance Act, 1938. The act still applies to all kinds
of insurance business by instituting necessary amendments from time to time.

3. Fire Insurance

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Fire insurance has its origin in Germany where it was introduced in
municipalities for providing compensation to owners of the property, in return for
an annual contribution, based on the rent of those premises. The fire insurance in
its present form started after the most disastrous fire in human history known as
the 'Great Fire' in London, which had destroyed several buildings. It drew the
attention of the public and the first fire insurance commercially transacted in
1667. The Industrial Revolution (1720-1850) gave much impetus to fire
insurance. The Nineteenth century marked the development of fire insurance.
Fire Insurance in India

In India, fire insurance was started during the British regime. The oldest of these
companies include the Sun Insurance Office, Calcutta (1710), London Assurance
and Royal Exchange Assurance (1720), Phoenix Assurance Company (1782), etc.

4. Miscellaneous Insurance

Due to the increasing demands of the time, different forms of insurance have been
developed. Industrial Revolution of 19th century had facilitated the development
of accidental insurance, theft and dacoit, fidelity insurance, etc. In 20th century,
many types of social insurance started operating, viz., unemployment insurance,
crop insurance, cattle insurance, etc. This way the business of insurance
developed simultaneously with human and social development. Today, the use of
computers in the field of insurance is frequently increasing. Insurance becomes an
inseparable part of human development. Miscellaneous insurance are of many
types like:

Personal Accident Insurance: protection for loss from injuries or loss of life.
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Travel Accident Insurance : covering loss of life or injury arising during
Level
Unnamed Driver and Passenger Insurance
Health Insurance
All-risks Insurance
Consequential Loss Insurance
General Public Liability Insurance
Burglary Insurance
Golf Insurance
Money Insurance
Fidelity Guarantee Insurance
Workmen Compensation Insurance
Contractual Liability Insurance

Aviation is the most expensive industry means of transport today.
This sector gained importance and created awareness after the 9/11 attack on the
twin towers of America. After this attack lot of changes took place in the aviation
sector and also lot of amendments were made by the law to regulate the aviation
insurance contracts. So let us see what these changes are and how aviation
insurance forms one of the important part of any countrys insurance sector.




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AVIATION INSURANCE


History

Aviation Insurance was first introduced in the early years of the 20th Century.
The first aviation insurance policy was written by Lloyd's of London in 1911. The
company stopped writing aviation policies in 1912 after bad weather and the
resulting crashes at an air meet caused losses on many of those first policies. It is
believed that the first aviation polices were underwritten by the marine insurance
Underwriting community.

In 1929 the Warsaw convention was signed. The convention was an agreement
to establish terms, conditions and limitations of liability for carriage by air, this
was the first recognition of the airline industry as we know it today.
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By 1933 realizing that there should be a specialist industry sector the
International Union of Marine Insurance (IUMI) set up an aviation committee,
and by 1934 eight European aviation insurance companies and pools were
formally established and the International Union of Aviation Insurers (IUAI) was
born.

The London insurance market is still the largest single centre for aviation
insurance. The market is made up of the traditional Lloyds of London syndicates
and numerous other traditional insurance markets. Throughout the rest of the
world there are national markets established in various countries, this is
dependent on the aviation activity within each country, the US has a large
percentage of the world's general aviation fleet and has a large established
market.

No single insurer has the resources to retain a risk the size of a major airline, or
even a substantial proportion of such a risk. The Catastrophic nature of aviation
insurance can be measured in the number of losses that have cost insurers
hundreds of millions of dollars (Aviation accidents and incidents).

Most airlines arrange "fleet policies" to cover all aircraft they own or operate.


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The Risks

Hull "All Risks"

The hull "All Risks" policy will usually refer to something like "all risks of
physical loss or damage to the aircraft from any cause except as hereinafter
excluded".

Airline hull "All Risks" policies are subject to a standard level of deductible (that
is an uninsured amount borne by the Insured) applicable in the event of partial
(non-total) loss. Currently, this deductible can range from $50,000 in respect of a
Twin Otter to $1,000,000 in respect of a wide-bodied jet aircraft, such as a Boeing
747.

Deductibles too can be reduced by means of a separate "Deductible Insurance"
policy. The Deductible Insurance Policy is effected to reduce the large "All Risks"
policy deductibles to a more manageable level. For example the US$1,000,000
applicable to a Boeing 747 can be reduced to say US$100,000.

The term "all risks" can be misleading. "All risks of physical loss or damage" does
not include loss of use, delay, or consequential loss. "Grounding" is a good
example of consequential loss. Some years ago when there had been a couple of
accidents involving DC10 Aircraft, the Civil Aviation Authorities throughout the
world imposed a "grounding order" on that type of aircraft.




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That order in effect said until certain things had been established and checked out
those aircraft could not fly. The operators of those aircraft were unable to fly
them and as a consequence of that they "lost" the use of them. But the aircraft
were not "lost" - it was known precisely where they were but they could not be
used to carry passengers. Such an eventuality would not be covered by an "all
risks" policy because in such circumstances there is no PHYSICAL loss or
damage.

What the policy will cover is the reinstatement of the aircraft to its "pre-loss"
condition, if repairable damage is involved, or some other form of settlement in
the event that more substantial damage is sustained. Exactly what form of
settlement will depend on the policy conditions.

Today, the vast majority of airline hull "all risks" policies are arranged on an
"Agreed Value Basis". This provides that the Insurers agree with the Insured, for
the policy period, the value of the aircraft and as such, in the event of total loss,
this Agreed Value is payable in full. Under an Agreed Value policy the
replacement option is deleted.


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Exclusions

Wear, tear and gradual deterioration - in common with most non-marine
policies these perils are thought to be a trading expense and not a peril to
be insured.

Ingestion damage - caused by stones, grit, dust, sand, ice, etc., which result
in progressive engine deterioration is also regarded as "wear and tear and
gradual deterioration", and as such is excluded. Ingestion damage caused
by a single recorded incident (such as ingestion of a flock of birds) where
the engine or engines concerned have to shut down is not regarded as wear
and tear and is covered subject to the applicable policy deductible.

Mechanical Breakdown - likewise is thought by aviation insurers to be an
operating expense, but subsequent damage outside the unit concerned is
usually covered. However, it is possible to obtain insurance coverage
against mechanical breakdown of engines by way of a separate policy. This
coverage has a high degree of exposure and as a result is relatively
expensive. The majority of airlines do not purchase it probably viewing
such exposure as a part of the "engineering" budget.
Spares

First of all we must identify what we mean by a "spare" or perhaps - "when is a
spare not a spare" to which a simple answer is "when it is attached". Under most
"Hull" policies the word "Aircraft" means Hulls, machinery, instruments and the
entire equipment of the aircraft (including parts removed but not replaced). Once
a part is replaced it is no longer, from an insurance viewpoint, part of the aircraft.
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Conversely once a spare part is attached to an aircraft as a part of that aircraft
(not in the hold as cargo or on the wing as an extra pod) it is no longer a "spare".

If the equipment is insured on the hull "All Risks" policy the automatic transfer of
coverage from "aircraft" to "spare" and vice versa is automatically accomplished.

Having established when a spare is a spare how is it insured as such? Usually in
one of two ways. Either under a "spares" section of a hull policy or by a separate
Spares Policy. In either case the scope of coverage will probably be similar. All
Risks whilst on the Ground and in Transit for a limit of [so much] any one item
or sending or any one location. War Risks can also be covered (in respect of
transits), Strikes, Riots, Civil Commotions can be covered in accordance with
standard market clauses. Spares coverage is usually subject to a small deductible
except, however, in respect of ground running of spare engines when the
appropriate Ingestion deductible will be applied. Spares are normally covered on
an agreed value basis - usually their replacement cost (be it new or reconditioned
- as is required).

Spares installed on any aircraft are not covered by the Spares Insurance. They
become, from an insurance standpoint, a part of the aircraft upon which they are
installed and a part of the Agreed Value for which it is insured. This becomes
particularly important if the parts are loaned to another airline.

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Hull War Risks

The hull "All Risks" policy will contain the exclusion of "War and Allied Perils".
Generally speaking, throughout the aviation insurance world, "War and Allied
Perils" have a defined meaning. In the London Aviation Insurance Market the
standard exclusion is called the War, Hi-jacking and Other Perils Exclusion
Clause (currently known by its reference - AVN48B for short) this lists and
defines these so-called war and allied perils.

War Definition :

War - this includes civil war and war where there is no formal
declaration.
The detonation of a weapon of war employing nuclear fission or fusion.
Strikes, riots, civil commotions and labour disturbances.
Political or terrorist acts.
Malicious or sabotage acts.
Confiscation, nationalization, requisition and the like by any
government.
Hi-jacking or any unlawful seizure or exercise of control of the aircraft
or crew in flight.
The exclusion also applies to any loss or damage occurring whilst the aircraft is
outside the control of the operator by reason of any of these "war" perils.
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The majority of the excluded "War and Allied Perils", other than the detonation
of a nuclear weapon and a war between the Great Powers (the aviation insurance
world identifies these as the U.S.A., the Russian Federation, China, France and
the UK), can normally be covered by way of a separate "War and Allied Perils"
policy. Aircraft deductibles are not normally applied in respect of losses arising
out of "War and Allied Perils".
Other exclusions insurers will usually apply are, as follows:-

Confiscation etc. by the "state" of registration (this exclusion can often be
deleted in respect of financial interests - albeit, in some instances at an
additional premium charge)
Any debt, failure to provide bond or security or any other financial cause
under court order or otherwise;
The repossession or attempted repossession of the Aircraft either by any
title holder or arising out of any contractual agreement to which any
Insured protected under the policy may be party;
Delay and loss of use. (Although there is often an extension to the policy
for a limited amount for extra expenses necessarily incurred following
confiscation or hijacking).

The aircraft hull "War and Allied Perils" policy will cover the aircraft on an
"Agreed Value" basis against physical loss or damage to the aircraft occasioned
by any of these perils. This statement is made carefully and deliberately in order
to highlight the essential difference from a "Political Risks" Insurance.


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Liability Insurance

Liability can be divided basically into two categories:

Liability in respect of Passengers, Baggage, Cargo and Mail carried on the
aircraft. These liabilities result from the operations the airline is set up to
perform and are normally the subject of a contract of carriage like a ticket
or airway bill, which provides some possibility of limiting the airline's
liability.

Aircraft Third Party Liability - the liability for damage done to property or
people outside the aircraft itself.

Every airline will arrange liability insurance for these two categories, normally in
a single liability policy. In many countries there are requirements laid down
imposing minimum limits of liability that are a prerequisite to obtaining an
operator's licence. Elsewhere limits are specified for an aircraft to be allowed to
land. The size of limit required is often related to the size of the aircraft
concerned (and its potential for causing damage). A small aircraft operating only
in remote regions and using small airstrips incurs considerably less potential
exposure than an aircraft flying into and out of major airports.


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General Liabilities

The other category of liability covers premises, hangarkeepers and products
liability and is called "Airline General Third Party" - being the liability for
damage done to property or people arising from other than the use of aircraft.
Many airlines cover their "Airline General Third Party Liability" within their
main liability program.

It is called "Airline General Third Party Liability" these days since the insurers
took steps specifically to exclude all non aviation activities (for example hotel
ownership or management) from "Aviation" Policies a few years ago. Basically for
a risk to be considered as "Airline General Third Party Liability" it must arise
from what are described as "aviation occurrences" being those involving aircraft
or parts relating thereto, or arising at airport locations or arising at other
locations in connection with the airline's business or transporting
passengers/cargo or arising out of the sale of goods or services to others involved
in the air transport industry.
This means that there is a definitive language detailing what is considered as
"aviation exposure" such that any other (non-aviation) exposure is excluded.

Most policies are placed on a Combined Single Limit Basis. This means Bodily
Injury and Property Damage combined. In the past, personal injury was included
but now this has been separated. It should be mentioned, however, that these days
the term "bodily injury", in addition to bodily injury, sickness and death resulting
at any time, will include shock and mental anguish. "Personal Injury" on the
other hand is defined as "offences against the person", such as false arrest,
malicious prosecution, invasion, libel or slander and the like.
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In respect of Personal Injury the full policy limit, whatever that may be, is not
available and is usually limited to US$25,000,000 any one offence and in the
annual aggregate.
What is excluded from a liability insurance are such things as:-

Damage to the Insured's own property. (It is after all a third party liability
policy).
War and Allied Risks although these are "written back" by a device called
"The Extended Coverage Endorsement - AVN 52".
Radioactive Contamination.
Noise and Pollution - unless caused by or resulting in a crash, fire,
explosion or recorded "in flight" emergency.

Both the Aircraft and General Liability policies usually includes the "war and
allied perils" exposure by way of a "write back" and will probably provide for
such things as search and rescue expenses, first aid and other humanitarian
expenses and also defense costs.

Hull Total Loss Only Cover
This is similar to Hull All Risks cover given above but will respond only to total
losses of aircraft, whether actual, constructive or arranged. This is particularly
given for old aircraft since the old aircraft are heavily depreciated and insured for
low sums and premium on such low sums would result in low premium, which
would be inadequate for the partial losses. The ratio of partial losses to total
losses in such old aircraft is distorted.
BUYING AVIATION INSURANCE CONTRACT:
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As with many specialized service or commodity purchasing, the use of an
experienced intermediary or middleman is usually prudent for the transaction
process. Although this middleman may not be required in all facets or industries
for successful purchases, in the Aviation Insurance Industry, with only one
exception, it is required. The middleman we are discussing is often referred to as
a Broker; it is quite frankly the only way to accomplish this need. All the Aviation
Insurance companies or groups require the use of a Broker to secure insurance on
behalf of the consumer. So what is this Aviation Insurance Broker we need to
utilize and access most of the companies providing insurance?


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Well, the term broker refers to an independent insurance person who is
licensed by the State to represent and work for the consumer in the insurance
purchasing and service process. Unlike an insurance agent who represents an
insurance company and represents that insurance companys interest, a broker is
independent of the insurance company and represents the needs and interest of
the client. This independence allows the broker the freedom and opportunity to
deal with multiple aviation insurance companies and is considered to be working
the client. The brokers compensation is paid by a percentage of premiums, which
comes from the consumer. This commission structure keeps the brokers attention
to represent the best interest of the client/consumer and places a responsibility
that the broker provides a continuous service and handling of the insurance needs
or requirements.


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SELECTION OF A BROKER:
The selection process of a broker should be more involving for the consumer,
than which insurance company to buy the coverage from. That is a process
consumer and the broker decide upon. The selection of a broker should take
several considerations, such as the experience the broker has in the consumers
segment of aviation or operation, the infra-structure or team support behind the
broker to achieve the demands of technical service and document handling, the
market relationship and credibility with underwriters (the insurance company),
and the overall reputation in the aviation community.
Just as an extensive interview process in conducted to select an employee for a
company, so should the hiring process involve searching for, and selecting the
aviation insurance broker. This can be conducted by an interview process where
the broker sells themselves and the organization they represent as well as a check
upon their credentials with a client list of references. Once this process is
complete and the consumer feels comfortable with the selection, the long-term
relationship the consumer develops with his broker will provide the consumer
years of professional service.
If, however, the client believes his choice was not good or the broker service does
not meet his expectations for a variety of reasons, the client can always change
the broker as in the original selection process by writing a "Broker of Record"
letter which is provided to the current insurance company. This letter will replace
or fire the current broker with the clients new selection, which is based on his
criteria and not that of any insurance company. Whatever the process by which
the client select or remove the broker representation is controlled by the client.
WHAT DOES YOUR BROKER DO FOR YOU?
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Understanding the brokers job should help the client during the selection
process. The broker will gather the "underwriting" information on the clients
"risk", the aircraft or operation, and submit this information to the insurance
company. This gathering of information can be as simple as a one-page
application for small risk such as private aircraft usage or as complex as booklets
of information for large commercial operations. In any event it is important that
the broker knows what information to secure, how to present it and understands
completely its context. Thats because the next important part of the brokers
responsibility to the client is to negotiate the best combination of coverage and
price for clients risk. This can only be achieved with a brokers level of
understanding of clients risk, their experience in this area, and for larger risk
having a support mechanism the underwriter can relate to. It is in this process the
brokers skill is utilized to create the competition between insurance companies to
obtain best industry prices at the current time. Once the broker has negotiated
the clients insurance program, they will continue to advise the client from the
purchasing process through the coverage issues that may arise during the policy
period, usually one year. This expertise in service can deal with changes in your
policy during its term to the most important reason the client bought the policy
in the first place and that is handling a claim should one occur during the policy
term. This service process from the client broker may not involve just one person,
but multiples of support personnel depending on the size and complexity of your
risk. As stated earlier, this is why the selection process is important and should
involve understanding the structure of the entire brokerage firm for which to
represent the client.

WHAT TO GIVE YOUR INSURANCE BROKER:
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AIRCRAFT INFORMATION
Report year, make, model and acquisition
value, plus tail and serial numbers and
information about passenger and crew
seating.

BASE INFORMATION
Give details about home airport, hanger
space and ground handling.

CONTRACTS
Supply drafts of usage, ownership and
storage agreements.

LIABILITY LIMITS &
PROVISIONS
Report average passenger load and profile
and review insurance provisions, deductibles
and warrisk perils.

MAINTENANCE DETAILS
Explain whether youll outsource it, use an
in-house mechanic or do a little of both.

MISSION INFORMATION
Detailed purpose of use, territory of
operations and anticipated annual hours of
operations.

PILOT HISTORY FORMS
Submit signed forms (which are obtainable
from your broker) for all pilots.


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In todays changing and evolving aviation insurance market it is important for
the consumer, to understand the responsibility of the broker and how best they
can to serve. The broker works for the consumer/client and as the consumers
want to hire the best pilot or mechanic, so do they want to hire the best broker.
This is a profession where skill and experience is the best resource for the overall
success in the clients insurance program.

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RENEWING AVIATION INSURANCE

If you're like most owners and pilots, you simply renew your aviation insurance
policy every year. If it was good enough last year it will be good enough this year.
Then you probably don't give it another thought until next year. And this pattern
often repeats itself for many years.

There are two very big problems with this scenario. First, things change. Your
aircraft, where you fly, who you fly with, how much you flymany of these
things can change over the years, and they should be reflected in your policy.
Second, and even more serious, it is quite possible that your policy wasn't the
right one for you to begin with! In that situation, you are simply renewing your
mistake year after year. In either case, your aviation insurance policy deserves a
little bit of your time once a year. Here are the five things you should do to make
sure you are adequately protected.

Choose your broker
Confirm the value of your aircraft
Review your liability
Get the right coverage for your needs
Protect your interests
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1. Choose your broker
When you insure your home or your business, a broker
can choose from dozens and dozens of insurance companies. As a result, shopping
around with a few brokers can make sense. Chances are, they may not even
approach the same companies for your quote.
In the case of aviation insurance, however, there are only four or five companies in
Canada to choose from and even fewer that specialize in light aircraft. Obviously,
it doesn't matter how many brokers you go to, the odds are that they will be
approaching the very same companies on your behalf. This can actually be a
serious disadvantage for you, as some companies will simply refuse to quote in
these circumstances in order to avoid the feeding frenzy that can result when a
number of brokers vie for the same account.
So, as you can see, choosing your broker is the first step. But how do you choose?
And are there any alternatives to a broker?

Let's look at alternatives first. The only alternatives to a broker are the direct
sellers and special programs. In these cases you are dealing with a salesperson
who can only offer you the one product they represent. As a result, these options
tend to be promoted on the basis of cheap ratesbut like bargains anywhere,
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they do so by cutting coverage and often leaving you seriously underinsured. If
you really want to know what they can offer you, check them out. But before you
make your decision; be sure to talk to a broker who works for you and not any one
company.

So how do you choose the right broker? Start by finding an aviation specialist.
Although any general insurance broker can sell you aviation insurance, they
simply do not have the experience or familiarity with the field to be your best
choice. Even more importantly, they usually can't get you the best rates.

If the insured is an aviation specialist, he may deal with the companies and
underwriters every single day. He gets to know them personally and may place a
lot of business with them. Now compare that to the average general insurance
broker who maybe places one or two policies a year with that company. Who do
you think will get you the better results? Finally, make sure that you are
comfortable with the broker you choose. Just because someone special in aviation
insurance doesn't automatically mean they are good. Do they take the time to ask
you questions, get to know your needs, and fully explain things to you in a way
you can understand?? If they docongratulations, you've found your broker!

They will probably ask you to sign a Letter of Brokerage which will let
insurance companies know that you have in fact appointed them to be your broker.
Then you can move on to the other four steps below.

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2. Confirm the value of your aircraft

Neglecting to keep up with the market value of your aircraft is one of the most
common renewal mistakes. If you do this year after year, you could be in for a rude
awakening. Aircraft values have soared in recent years, with many doubling in
price over the last decade.
Unlike home or auto insurance, aviation insurance is a stated value policy. That
means that the owner is responsible for declaring the value of the insured aircraft.
If you undervalue your plane, you risk losing it after even a minor accident. As I
have explained many times in this column, the stated value is the maximum the
insurance company will pay out and they will keep the plane as salvage.

So whether you have simply neglected to increase the value on your policy at
renewal time or have tried to save a few bucks on the premium by insuring for a
lower amount you are taking a very big gamble. Make sure you resolve this issue
at your next renewal.
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3. Review your liability


Make sure your policy doesn't have passenger or family member restrictions. This
is the most common way that companies offer bargain policies. It is also the
most common way owners lose everything they own when courts award large
injury settlements that are not covered by their bargain policy. I regularly see
people with limits of only $100,000 per person. You'd never consider such a low
amount for your home or auto insurance, so why allow it on your aviation policy?
With the high court settlements being awarded today, one to two million dollars
should be the least you consider.


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4. Get the right coverage for your needs


At every renewal, you should discuss your flying habits with your broker. Many
companies have territorial restrictions to the and some have restrictions for dirt or
grass landing strips. Make sure your policy covers the kind of flying you do.

If you have madeor are planning to makeany upgrades or changes to the
configuration of your aircraft, you may need to make some adjustments to your
policy. Otherwise, you may find yourself out of luck in case of an accident.


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5. Protect your interests


Finally, you should discuss any other unusual circumstances regarding your
aircraft. You may need to arrange for special coverage to protect your interests.

One common example I run into is an owner who has his aircraft on lease to a
flying school or commercial operator. If the lessee commits an illegal act or
omission, your aviation policy could be nullified. In these situations, you should
obtain Breach of Warranty coverage which will pay a lien holder's interest
despite the policy being otherwise invalidated.

Following these simple steps once a year at renewal time is an easy way to make
sure that your aviation insurance policy continues to protect you. So don't take the
easy way outdon't just say renew it as is for another year.


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AVIATION INSURANCE IN INDIA: TAKE OFF
STAGE



The unbridled growth in the aviation sector has come as a bonanza for the
insurance sector. Thanks to capacity addition and the entry of new aviation
players, a host of insurance companies are eyeing this growing market to offer
insurance cover to new planes that are being brought to India.

The aviation insurance market is looking up and is currently at Rs 350 crore.
But with new aircraft being bought by new players entering the business and the
existing one on an expansion mode, the aviation market is set to take off, said
Bajaj Allianz General Insurances Head-Underwriting K. Krishnamoorthy. With
the entry of several low cost airlines along with fleet expansions by existing ones
and increasing corporate aircraft ownership, the Indian aviation insurance market
is all set to take off in a big way.

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Industry trackers believe that with several airlines including IndiGo, East West
Airlines and Magic Air set to enter the market in the coming weeks, the airline
premium income could be up 50 per cent in the next two years.

Though Indias contribution to the total global insurance premium paid by
airlines which stands at US $ 5.86 billion is miniscule, the growth in aviation
premium payout is highest in China followed by India, experts say. Airline
insurance which is typically offered to passengers, cargo airlines or company or
individually-owned aircraft generally consists of coverage to the aircraft and
liability to passengers.

Before the boom in the Indian aviation sector, the airline insurance market was
dominated by the four state-owned general insurance companies: New India
Assurance Company, Oriental Insurance Company, National Insurance Company
and United India. However, with the growth in the Indian aviation story, private
players like ICICI Lombard, Bajaj Allianz, Iffco Tokyo General Insurance and
Reliance General Insurance Company are also trying to muscle their way into
this lucrative sector.

The unprecedented growth in this sector is also seeing private players join hands
with each other to bid for accounts. The latest such case is the ICICI Lombard-
Bajaj Allianz tie-up where they are jointly bidding for Air Indias insurance
account which includes providing cover for 50 planes valued over $3 billion.

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Currently, a consortium of public sector insurance companies including New
India Assurance, Oriental Fire and General Insurance and United Fire and
General Insurance handle Air Indias account for which the airline is paying an
annual premium of close to US $ 14 million.

Aviation insurance business is a high severity loss business and in the future you
could see a lot of Indian insurance companies joining hands to manage airline
accounts.
Experts say that the role of an reinsurer generally foreign insurance
companies is also bound to increase in the future. Indian insurance companies
do not have the financial muscle to address claims of airlines and generally go in
for reinsurance which means sharing the risk of loss with another insurance
company.

The role of an reinsurer is important in the Indian context as most of the
companies do not have the requisite experience of handling a market of this size.
The reinsurer helps in providing the technical expertise, capacity to underwrite
the business and their ability to handle such large risks, the official said.

Estimated to be in the region of Rs.3.5 billion, aviation insurance premium
business is growing at a fast clip. At present the government-owned four non-life
insurers are the major players in this segment as they cover public sector airlines
like Air India and Indian.


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Out of the eight private players, Bajaj Allianz General Insurance Company and
ICICI Lombard General Insurance Company Limited are most active in this
segment.

The Pune-based Bajaj Allianz is co-insurer for Kingfisher Airlines, Go Air, Indigo
Air among the scheduled airlines and has also insured aircrafts owned by
corporates like the Bajaj Auto consortium, Force Motors, Ranbaxy group,
Shamanur Sugar group and Orient Flight School. ICICI Lombard has insured
around 75 aircrafts.

Aviation insurance is offered to scheduled airlines (passenger or cargo airlines)
and non-scheduled airlines (company or individual-owned aircrafts) and also
crafts owned by flying clubs.
The basic coverage offered is to the hull of the aircraft, liability to passengers and
third party and also can include personal accident cover to the crew members.


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Normally the types of insurance covers available are:

Aircraft owners / operators
Aircraft hull policy - covering loss of or damage to aircraft
Aircraft liability policy
Liability of aircraft owner/ operator in respect of accidental bodily
injury or property damage.
Liability towards passengers both in respect of accidental bodily
injury and also towards loss or damage to baggage and personal
belongings of passengers.
Aviation war and allied perils
Aviation product's liability
Airport operator's liability
Aviation service provider's liability

The policy covering aircraft hull insurance is usually on an agreed value basis. In
the event of a total loss the stated amount can be paid as agreed and the option to
replace the aircraft can be avoided. This frequently occurs because of development
of newer and faster types of aircraft or due to purchase of an aircraft on mortgage.

The insurers base their rating on variables like: aircraft age, type of aircraft i.e.
fixed wing or rotor, geographical area of flying operations, maintenance facilities,
past experience, experience of the pilots, claims experience of the fleet and the
carrier, the number of passengers, etc.
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Normally the premium would depend on the aircraft and its size besides
operations. However it would vary from 1 to 2.5 per cent of the aircraft value.
Interestingly the aviation insurance premium is highly reinsurance-driven as the
value of risk covered is so huge that the primary insurers do not want to shoulder
on their own. For instance Oriental Insurance Company Limited retained just
Rs.60 million out of the Rs1.5 billion aviation premium earned last fiscal.

In terms of loss experience the domestic aviation business is quite profitable with
very few claims - except for a few improper landing and bird hit damages -
registered in the recent past.

Meanwhile, players also feel that airlines can also benefit from this growth in the
market as growing competition could mean lower premiums. The Indian
aviation industry has had a few good years with no major losses reported and
hence the players can have the benefit of reduction in premiums for good records.
This would encourage clients to go for higher covers or optimize it,
Krishnamoorthy says.



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CURRENT SCENARIO OF AVIATION INSURANCE:

The magic of multiplier effect is now working for the aviation ancillary industry.
Reaping the benefits of the aviation boom is not only maintenance, repairs &
overhaul (MRO) operations but also the insurance sector. In fact, the spiraling
growth in the aviation sector has given an upshot to the insurance segment.
As per an airline risk management survey - commissioned by international
magazine Airline Business and global airline insurance broker Aon - airlines are
spending no less than $8.36 bn a year on risk management, with around 70%, or
$5.86 bn, spent on insurance premiums. Aviation premiums are, on an average,
growing by 15.5% post-9/11, the survey reports. It further states that while the
industry's loss record has been respectable in the last four years, traffic and
passenger numbers have risen significantly, increasing the exposure to risk.
In India, a majority of the private players, including Bajaj Allianz, ICICI
Lombard, Reliance and the four public sector general insurance companies -
Oriental, New India Assurance, United India, National Insurance - offer aviation
insurance in the market.
Although there are no official estimates, industry players put a ballpark figure of
the Indian aviation insurance market at somewhere around Rs 400 cr to Rs 500
cr. "With new aircraft being bought by new players entering the sky and the
existing one in expansion mode, this segment will only grow," says T A
Ramalingam, head, underwriting, Bajaj Allianz.

Bajaj Allianz is one of the most active players in the market and a co-insurer with
Kingfisher Airlines, Go Air, Indigo Air and Air India among the scheduled
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airlines and also insured aircraft owned by India companies such as Bajaj Auto
consortium, Force Motors, Ranbaxy group, Shamanur Sugar group, Orient
Flight school, Asia Aviation, a part of the BILT group, Mundra Port and SEZ
Ltd, an Adani group company.
In India, this segment is highly reinsurance-driven. A majority of the players
have re-insured the value of risk covered with foreign companies. Take the case of
Air India where almost 90% of the risk is insured overseas through reinsurance
arrangements, while the remaining cover rests domestically.

According to Ernst & Young, a global consultancy firm, Indian skies would have
over 700 aircraft - from 235 currently - by 2012, an increase of almost 200%. The
numbers speak for the potential of this segment in the market, which is one of the
fastest growing in the world.
"Predictions for aircraft deliveries to meet the increasing demand for air travel,
particularly in Asia, mean that some 4,000 new airliners are on order, with this
region at 1,242 leading the way. Growth in purchasing power of passengers and
entry of low cost airlines has driven the upward movement of the airline industry
both in terms of equipment and staff and opening new opportunities for this niche
segment," believes Kartik Jain, head, marketing and e-channel, ICICI Lombard.
The company has insured more than 75 aircraft till date.
The shot in the arm for this industry has further come from the fact that aircraft
are becoming bigger in size with large seating capacity. This, in turn, increases
the risk for insurers, sometimes even catastrophic. With the emergence of bigger
aircraft such as Airbus A 380 and Boeing 777 Dream liners, the values of the
aircraft as well as the liability are slated to increase tremendously. The severity of
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each loss is also expected to go up proportionately. Currently, at least 10-15 re-
insurers participate in an airline insurance programme. However, with the
introduction of larger aircraft, the number of re-insurers participating would
increase to 25.

The total premium figures for aviation insurance in India for 2006-07 stood at Rs
417.29 cr. Reliance, which does not hold a major share in the airline business till
now, is counting on its experience of handling major risks pertaining to energy/
off-shore risks/ package policies of large clients and strong network of
international underwriters. "National reinsurer, GIC, leads our reinsurance
treaties.

As reinsurance support is essential in getting competitive quote in aviation
insurance, we aim to increase our share considerably in this financial year," says K
A Somasekharan, CEO, Reliance General Insurance. Typically, the premium
depends upon underwriting factors such as age of the aircraft, experiences of the
pilot flying the aircraft, make and model and use of the aircraft. It is generally 1%
to 3% of the aircraft value.


On the profitability part, Oriental Insurance chairman-cum-managing director M
Ramadoss says that the domestic aviation business is enjoying the benefits of a
softening market with claim ratio being very low. Save for a few cases such as
improper landing or bird hit damages, there are not many claims made in the
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recent past. The company's client includes Jet Airways, Paramount Airways, and
Air India, among others.

Industrialists, however, does not anticipate terror risks pushing up the aviation
insurance costs. This space is very price competitive. The number of players in
the market are increasing, which has led to insurance rates steadily coming down
in spite of recent air crashes in the world.


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MAJOR PLAYERS OF AVIATION INSURANCE IN INDIA


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AVIATION INSURANCE OF KINGFISHER AIRLINES
(PRIMARY DATA)


Two private sector general insurance companies, ICICI Lombard General
Insurance and Bajaj Allianz General Insurance, have bagged the insurance
account of Vijay Mallyas Kingfisher Airlines.

This is for the first time that the private sector general insurance companies have
made major inroads into the aviation sector, which has mainly been the forte of
the public sector insurers.

Both ICICI Lombard and Bajaj General Insurance will share the Kingfisher
Airlines account in a 75:25 ratio. After a beauty parade by the public sector and
private general insurance companies, the account was awarded to the two private
sector general insurance companies last week. ICICI Bank, one of the promoters
of ICICI Lomabrd, has also financed the aircraft acquisition plans of the
Kingfisher Airlines. The insurance deal will be executed the moment Kingfisher
Airlines acquires its fleet of aircraft. Kingfisher will be the first private carrier to
be launched with an all-new fleet. The airline has signed an agreement with
Airbus Industrie of France for the purchase of three brand new Airbus A319
aircraft. With this new purchase, Kingfisher Airlines, which will launch its
operations on May 7, has ordered a total of 33 brand new aircraft. Of these, a total
of 13 aircraft 10 A320s and 3 A319s are on firm order, with options for
buying a further 20 aircraft.
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AVIATION INSURANCE OF AIR INDIA
(Primary data)


New India Assurance Company participated in the Aviation Insurance of Air
India way back in 1946. New India Assurance Company provides professional
aviation insurance advice and solutions to the needs of small aircraft operators as
well as scheduled airlines.

The aviation portfolio of New India Assurance Company encompasses following
type of covers.

Hull All Risk Insurance Policy: This policy is suitable for small aircraft
operators belonging to flying clubs, companies engaged in agricultural
spraying operations, aircrafts especially designed for VVIPs, business
executives and for those engaged in industrial aids. The policy scope
includes all physical loss or damage sustained by the insured aircraft
including total loss, disappearance. All losses are paid subject to
deductibles.

Spares All Risk Insurance Policy: Covers loss or damage to spares, tools,
equipments and supplies owned by the insured or the property for which
the insured is responsible whilst on ground or in transit by land, sea, air
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including in own aircraft or whilst on the premises of others for storage
only.

Hull/Spares War Risk Insurance: Indemnity is provided to the aircraft as
well as spares caused by war, invasion, acts of foreign enemies, hostilities,
civil war, rebellion, revolution, resurrection, martial law, strikes, riots, civil
commotion, malicious acts, sabotage.
Hull Deductible Insurance: Airlines at times have to bear a proportion of
loss due to application of a deductible under All Risk Policy, which may
impose considerable financial difficulty on the insured. Therefore the
operators insure part of their deductibles under this kind of insurance.

Aviation Personal Accident (crew member) Insurance: This cover is
designed to cover insured person against injury, disablement or death
arising as result of an accident that is generally granted on annual basis.
The cover operates while mounting or dismounting from and whilst
traveling an aircraft while the aircraft is being used within the geographical
scope as per its permitted usage. This cover can also be on 24 hours basis.
The capital sum insured varies according to the status of the insured or
earning capacity and fixed by the insurers.

Loss of License Insurance: Operating crews of the aircraft are required to
have valid license. License is liable to be suspended either temporarily or
permanently on medical grounds. Consequential financial loss is covered by
the loss of license policy. Cover provided is in respect of incapacity causing
permanent total disablement or temporary total disablement due to bodily
injury or illness.
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Besides the aforesaid general aviation policies New India Assurance Company
also provides various other tailor-made insurance as per specific requirements of
the insured.
Claims: In case of claims following are illustrative documents that are
generally called for from the insured.

Documents in connection with aircraft details
Documents in connection with flight details
Documents in connection with the accident
Certificate of airworthiness/registration
Crew details
Maintenance & engineering information
Operational manual passenger documentation in case of claims


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EFFECTS OF 9/11 ATTACK ON AVIATION INSURANCE

Following the September 11
th
attack in the United States, the subject of aviation
insurance attracted much attention in the media and elsewhere after aviation
insurers worldwide withdrew cover for the specific acts of war and terrorism. As
a result, many national governments stepped in to provide temporary insurance
cover to ensure that airlines continued flying.

Short to medium term solutions
At the request of the airline industry the International Civil Aviation
Organisation established a special group on war risk insurance (SGWI) which,
as a short and medium term measure recommended the setting up of an
international mechanism funded by insurance premiums to provide
noncancellable third-party aviation war risk coverage through a non-profit
special purpose insurance entity (GLOBALTIME) with multilateral government
backing for the initial years. As a long-term solution the SGWI recommended
that an international convention be developed which would limit the third-party
liability of the aviation industry for losses arising from war, hijacking and allied
perils.
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Uncertainty ahead?

Some four years on from 9/11, most governments have withdrawn guarantees for
hull and liability war cover to airlines and airport service providers. Notable
exceptions include the United States, China and Singapore. The market has now
responded with certain insurers offering major airlines limited no cancellable
third party coverage.
Enthusiasm for GLOBALTIME has waned and a new convention on damage
caused to third parties on the ground has yet to be agreed. In Asia at least, the
airline industry has experienced a dramatic turnaround in fortunes with renewed
prosperity. However, as with other classes of catastrophe business, there remain
underlying uncertainties in the aviation insurance market that could dramatically
change the environment. One of those uncertainties is the prospect of a
catastrophic event caused by dirty bombs, bio-chemical and electromagnetic
devices or weapons of mass destruction (WMD). The fear is that the use of a
dirty bomb at a major international airport could not only lead to immediate
multiple aircraft, passenger and third party losses, but also long term
contamination of sites preventing access and the uncontrolled spread of diseases.


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Convention and statutory limits

The Montreal Convention 1999, which governs the liability of airlines in relation
to passengers and cargo interests, requires airlines to obtain adequate insurance
to cover their liabilities under the Convention. In addition, airlines are required
by many states to have minimum insurance limits to cover such liabilities
including third party surface damage.
After the September 11, 2001, terrorist attacks on the United States, the
insurance costs for commercial airlines and college aviation programs rose
sharply. The prevailing assumption is that increased aviation insurance costs are
the result of an increased risk of life and property loss from additional terrorist
attacks. This paper questions the assumption and posits that the September 11,
2001, attacks were a catalyst for and not the cause of increased insurance costs.
Two alternative explanations for the increased costs are offered. First, after
September 11th, insurance managers became aware that they had not been
making the incremental rate increases necessary to maintain acceptable profit
margins. Second, sharp declines in the value of the insurance company stock
portfolios eroded profits. Increases in aviation insurance cost will be compared to
increases in other types of insurance, such as medical insurance, to determine if
the rate of increase in aviation insurance cost is significantly higher than in other
sectors of the economy. The impact of these insurance rate increases on domestic
and international air transportation and commerce is presented.


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Future of Aviation Insurance:


As the industry enters into the millennium, the insurance industry must look at
several problems that also face the aviation industry. Survival for the small FBOs
is getting harder each day; the threat of financial devastation is real when it
comes to lawsuits. General aviation may be forced to change its way of doing
business and become more like the military and commercial airlines. One can only
hope that society will change their attitude towards the aviation industry and the
litigation that surrounds the industry. We all hope for a positive future for the
community.

Insurance and the Future of Aviation the aviation industry, as it is known today,
has grown into a set of definable industries. Modern aircraft range from military
to commercial airlines to the most diverse group, general aviation. Aviation has
come a long way the last 100 years. The industry is still developing. With growth
comes problems that must be solved before the industry can go to the next level.
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As the industry enters into the millennium, the insurance industry must look at
several problems that face the aviation industry. Legal concerns, in many cases,
theyre influenced by our society. The court system plays a big part by their
decisions that are passed down. Its rare when an aviation case goes to court,
because insurance agencies know theyll lose when the jury hears the case. Its
just too easy to prove pilot negligence; most aviation accidents result from pilot
error. Also, when they do go to court, they very seldom mount a defense due to
the unreasonable verdicts, and ridiculous awards. These practices has forced
aircraft owners to stay away from new policies and let their insurance coverage
lapse. Aircraft owners pay three to five times the amount for adequate liability
coverage than their counter parts elsewhere in the world. Survival for the small
business operators is getting harder each day due to the General Aviation
Revitalization Act (GARA); the threat of financial devastation is real when it
comes to lawsuits. The (GARA) defects lawsuits from manufacturers to aviation
service providers.

FBOs insurance rates are skyrocketing because of this, which contributes to the
cycle by causing higher repair cost. Many small business operators really dont
want to take the chance and cant afford the rising cost thats associated with
liability insurance. As of February 2000 at least three aviation insurance under
writers ceased writing coverage for the small business operators, saying its a
major risk. One of the main reasons is the cost to the underwriters. Aviation
insurance companies have paid out a dollar and quarter for every dollar theyve
taking in, for each of the last several years. No wonder so many are closing down,
merging, or getting out of the historically riskier aviation activities, General
aviation may be forced to change its way of doing business and become more like
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the military and commercial airlines. Maintenance problems may be identified by
computers, and then repaired by the manufacturers. The industry is coping with
the mounting cost associated with liability insurance. Remove and replace
maintenance is the attitude the industry must lean towards. The manufacturers
would set up new factory service centers and repair facilities for the general
aviation customers. This system wouldnt help the rising cost of insurance, but
maintenance and ground liabilities would rest on the shoulders of the
manufacture.

The market itself is shrinking, weve had a generation of pilots from WWII,
Korea, and Vietnam that was introduced to aviation and trained at the
governments expense. Because of modern technology, well never again have the
numbers that we once had. The ageing fleet and pilots cant help the situation
that the industry is facing; the average aircraft age is 15 to 20 years, and the post
Indian pilot is now 50 to 60 years of age. The underwriters are very worried
about the age of both the pilots and the aircraft.

During a telephone interview with Darrel Hyde of CS&A Insurance, he stated;
Aircraft hull and liability insurance for the senior pilot has become such a
concern that the insurance industry should develop a special task force to help
deal with this problem. The need to extend the insurable age of the senior pilots
and to introduce new blood in to the cockpits will only help matters with the
attempt to lower insurance cost for the industry.

Insurance cost for the industry remains high, with the shrinking fleet of aircraft,
means that the training cost will increase. The value of airplanes is soaring; the
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GURUNANAK COLLEGE
high cost of new replacement aircraft for training isnt feasible. The FBOs are
facing insurance thats inadequate and expensive, and its forcing companies to
reduce their operations or even cut them all together. Owners of flight schools
are having a hard time just staying in business. The shortage of qualified
instructors has slowed the flow of new pilots, which in turn is putting a hardship
on the industry. The future of the industry could hold a brighter out-look. One
can only hope that society will change their attitude towards litigation, this
would hopefully drive down cost of liability coverage insurance.

The industry hopes that with the use of simulators at all levels of training will
increase the number of bettertrained pilots and hopefully lower insurance cost at
the same time. Insurance can be one of the most expensive elements in the fix cost
of owning an aircraft. To keep insurance cost under control in this difficult
environment, aircraft and aviation business owners are going to have to make
some changes in the way they purchase and think about insurance. There are
ways to reduce your insurance cost, remember buying cheap insurance isnt
always the best way to go, and its not heavily regulated by our government.
Companies can write policies pretty much the way they want to, you must pick
the right company for you and your aircraft. When shopping you can ask your
friends who they do business with and ask them their feelings on that company,
and are they treated well. Looking in one of the aviation trade magazines for
information dealing with aviation insurance companies is a great source; get a
phone number or a web address so you can make contact.
Saving money is the key when shopping for insurance. Only buy the needed
coverage; if you dont fly passengers, why pay for the protection against them?
You can always change your coverage when the need arises. Most people pay for
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GURUNANAK COLLEGE
coverage in the winter even if theyre not flying. In the winter paying for in
flight liability insurance can be a waste. Why not store the aircraft in the winter,
and change to storage coverage for that period of time. In most places flying
without heater would be very uncomfortable. Get extra training from the FAA
(Federal Aviation Administration) and other workshops, and prove to the
insurance company that youre safe and deserve a break on you insurance. Self-
insure whenever possible. Choose the highest liability limits you can qualify for
and afford, to guard against the catastrophic loss, and only as much hull
protection that you can afford. Match your equipment to your needs.

Aviation has come a long way the last 100 years, and the future could hold a
brighter out-look for the industry. One can only hope that society will change
their attitude towards the aviation industry and the litigation that surrounds the
industry. In the future, this could drive cost down and make liability insurance
affordable to the private owners, and to the FBOs.



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CONCLUSION

In the course of the analysis various trends and developments in the aviation
industry were discussed that provide partial answers to this question. Airlines
employ a wide variety of business models while taking an aviation insurance
contract. For example, some companies like Kingfisher Airlines take policy with
high premium while others like Air India take an aviation insurance contract with
low premium. It was also observed that airlines with huge and expensive airbuses
like ATR 42-500 aircraft tend to generate high amounts of risk; while relatively
less expensive aircraft like A330 aircraft tend to generate less risk.

The aviation insurance market is highly volatile due to the inherent nature of the
risk and the underwriting cycle of insurance. Historically, the market wide
premium appears to be almost as volatile as the claims, suggesting a lack of
consistency in underwriting this business.

The major caveat to my conclusion is that there is significant amount of public
data available to assist in underwriting and pricing aviation insurance. This data
can be used to develop more effective underwriting rating models for aviation
insurance and this should result in better selection of risks and more consistent
profits for the insurer.


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The aviation insurance market, by its own nature, is highly volatile. There are
many causes including the overall insurance underwriting cycle, the major
accident risk, the short-term memory of the insurance market, and the long-tailed
nature of determining responsible parties.

However, the increasing involvement of analytical professionals such as actuaries
should introduce more effective methods for pricing airline insurance and this
should help stabilize the premium component of the loss ratio equation.

Aviation has come a long way the last 100 years, and the future could hold a
brighter out-look for the industry. One can only hope that society will change
their attitude towards the aviation industry and the litigation that surrounds the
industry.



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BIBLIOGRAPHY
BOOKS:

Insurance in India
-P.S. Palande
-R.S. Shah
-M.L. Lunawat

Insurance (Fundamentals, Environment and Procedures)

-B.S. Bodla
-M.C. Garg
-K.P. Singh

Fundamentals of Risk and Insurance
Emmett J. Vaughan
Therese M. Vaughan

Insurance Chronicle- The ICFAI University Press (September, 2004)

WEBLIOGRAPHY



www.irdaindia.com
www.google.com
www.avbuyer.com
www.nationair.com
www.flykingfisher.com
www.niacl.com
www.airindia.com