At the end of 2025, aerospace reinsurance underwriters were expected to impose tougher renewals as they struggled under the weight of significant claims, however, direct insurers were able to negotiate relatively benign renewals at the start of 2026, according to WTW.
In its recent Aerospace Insurance Market Renewal Outlook, WTW noted that while rumoured reinsurance increases were lower than expected at the 2026 renewals, further price rises in the primary treaty reinsurance layer could make purchasing this layer uneconomical. This would force direct insurers to retain a larger proportion of risk on their own balance sheets, potentially leading to tighter scrutiny of underwriting decisions.
Capacity in the aerospace reinsurance market remains widely available. WTW said it will continue to monitor this area closely, as movements here can affect direct insurers’ underwriting strategies.
WTW stated that the strong capacity in the aerospace insurance market continues to provide insureds with a degree of choice and competitive tension. This environment can help moderate pricing outcomes, although challenges can arise when seeking surplus capacity.
Major claims in 2025 put the aviation insurance sector under the spotlight, with underwriters needing to justify their strategies to senior management, particularly where profit margins may appear constricted at current pricing levels.
For its 2026 outlook, WTW said, “The key message of the Q3/4 2025 edition of the Willis Aerospace Insurance Market Update was that the market had not moved away from its relatively soft position yet, and that message still broadly holds true. Aerospace insurers are still operating in a very competitive environment, which has held back price increases for insureds that are profitable for insurers, demonstrate proactive risk management strategies and engage with their insurance partners in a thoughtful manner.
“While conditions remain good for buyers, insureds should always prepare ahead in case any capacity reduction leads to changes.
“Even now, insurers are examining their portfolios and strategies towards specific sub-sectors. The best advice for insurance buyers is to identify the areas of focus for insurers and develop a strategy with your broker to address these in a structured and timely way. Good data and early engagement remain key for achieving the best results.”
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