Aviation underwriting

Document description

The Introduction to the Paper summarises the conclusions from discussions held with Aviation underwriters including how rating is done in practice. The question that should be asked is can actuaries contribute towards placing the rating of aviation on a more proficient basis. A brief description of the classes of aviation business is given followed by Underwriting Practice which describes the slip system which is the main method used for writing Aviation insurance business. Rating of Aviation insurance is described, firstly in general and then for the main classes giving the rating factors used by the underwriters. Space Risks and Personal Accident are each described in more detail as subjects deserving of special interest. A study by Sigma is described which investigates the nature of Aviation insurance cycles and provides an econometric forecast. Formulae of rate levels for each of Liability and Hull business are derived. The paper also includes discussion of the underwriting cycle, the accumulation risk and market statistics for 1994.