The global aviation insurance market is estimated to be valued at $6,326.30 million by 2028, surging from $4,282.90 million in 2020, at a noteworthy CAGR of 5.20%
COVID-19 Impact on Aviation Insurance Market
The aviation industry has had its “worst year in history” as a result of COVID-19. The pandemic has taken a toll on the Aviation Insurance Market. With travel restrictions in place across the globe for an extended period of time, as fleets remain grounded for nearly a month, one of the major challenges currently facing the aviation industry is a massive drop in cash reserves. Many airlines from developing countries such as India are on the verge of going bankrupt as their cash reserves deplete due to the nationwide lockdown. As international travel came to a halt in 2020 as a result of the COVID-19 pandemic, the aviation industry experienced “the worst year in history for air travel demand.” According to the International Air Transport Association (IATA), global passenger traffic in revenue passenger kilometers fell 65.9%from 2019 levels, with international passenger demand falling 75.6% and domestic demand falling 48.8%.
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Global Aviation Insurance Market Analysis
Rising middle-class affluence in developing countries is the primary driver of increased air passenger traffic. Domestic flight demand is increasing as a result of growth in the business, tourism, and other sectors. Domestic passenger traffic is increasing primarily in emerging and developing economies. Domestic passenger traffic growth in emerging economies such as China and India is expected to support the growth of the airport service market. India has the world's third-largest domestic aviation market. Aviation insurance market is expected to be driven by the need for increased spending at domestic airports and an increase in passenger traffic.Increasing cost of the premiums can hamper the growth of the aviation insurance market.
With opportunities in aircraft handling and cargo management, the aviation insurance industry appears to be promising. The evolution of the aviation industry has had a significant impact on the aviation insurance market. The market will be driven by an increase in passenger traffic in developing economies as well as infrastructure development. The constant increase in the number of airport terminals, as well as the renovation of present airport infrastructure is expected to fuel the growth of the aviation insurance market.
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Global Aviation Insurance Market Size, by Segmentation
The global aviation insurance market is segmented into type of insurance, application, and region.
Type of Insurance:
Based on type of insurance, the market has been divided into public liability insurance, passenger liability insurance, ground risk hull insurance not in motion, ground risk hull insurance in motion, and in-flight insurance. The passenger liability insurance sub-segment is the fastest growing sub-segment of the type of insurance segment, with revenues exceeding $1,632.20 million by 2028, up from $1,057.80 million in 2020. Passenger liability insurance used for physical injury liability protects the insured against liability for bodily injury, disease, mental distress, or death caused solely by passengers in the event of an insurance event specified in the insurance contract. One of the major drivers of growth is the increasing number of international travelers.
Application:
The application segment is further classified into commercial aviation, business & general aviation, and others. The commercial aviation sub-segment is the largest sub-segment of the aviation insurance market and is expected to garner a market share of $3,196.50 million by 2028, up from $2,121.40 million in 2020. Commercial aviation is a subset of civil aviation that includes scheduled airline services that use aircraft to transport passengers and cargo. Because of strong domestic demand, the aviation industries in both developed and developing countries across the globe are expected to recover faster, propelling the growth of commercial aircraft market in the coming years. These are some factors that are boosting the market demand.
Region:
The aviation insurance market for the Asia-Pacific region is predicted to be the fastest growing. The market in Asia-Pacific generated a revenue of $1,248.90 million in 2020 and is projected to reach up to $1,983.90 million by 2028. Commercial air travel is becoming more popular, particularly in emerging economies, while economic recovery means that civil helicopters and business aircraft are also in high demand. Rising international airline expenditure has increased the need for travel insurance, which is expected to propel the growth of the aviation insurance market.
Key Players in the Global Aviation Insurance Market
Some of the leading global aviation insurance market players are
- AXA Xl
- Starr Aviation Insurance
- American International Group Inc
- Avion insurance
- Allianz
- Marsh LLC
- ARTHUR J. GALLAGHER & CO.
- Great American Insurance Company (American Financial Group)
- USAIG
- London Aviation Underwriters, Inc.
Along with the company profiles of the key players in the market, the report includes the Porter’s five forces model that gives deep insights into the competitive environment of the market.
Porter’s Five Forces Analysis for the Global Aviation Insurance Market:
Bargaining Power of Suppliers: Global aviation insurance suppliers are plenty, and they are becoming increasingly globalized. As a result, aviation insurance suppliers lose bargaining power. As a result, the supplier's negotiating power is constrained.Thus, the bargaining power suppliers is low.
Bargaining Power of Buyers: Buyers have considerable bargaining power as a result of rising demand for aviation insurance with additional benefits. As a result, many aviation insurance providers offer various types of aviation insurances at low premiums. As a result, buyers have a wide range of options to choose from at various price points. The bargaining power of the buyer is high.
Threat of New Entrants: Companies entering the aviation insurance market must deal with high investment costs while also adhering to government regulations. Thus, the threat of the new entrants is low.
Threat of Substitutes: There are very low or no substitute available in the market. There is still huge demand for the aviation insurance services worldwide the across the globe.Thus, the threat of substitutes is low.
Competitive Rivalry in the Market: To maintain their market position in the aviation insurance industry, ventures are employing a variety of business development strategies. Furthermore, companies in order to provide customers with high-quality of financial services, are looking ahead. Therefore, competitive rivalry in the market is high.
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