Safer air travel isn’t translating into profitability for aviation insurers

Despite an uptick in headline-grabbing aviation losses this year — among them the Delta Air Lines crash at Pearson Airport in early 2025 — air travel remains safer than ever, says Norm Warner, senior vice president and aviation team leader at Aon Canada.

“That safety, though, doesn’t necessarily translate into profitability [for] insurers,” he tells Canadian Underwriter. “Insurers are undoubtedly getting squeezed in the aviation insurance market right now.”

As of September 2025, nine accidents and 404 fatalities involving commercial passenger and cargo flights have been reported by the Flight Safety Foundation. Over the past five years, the annual average has been seven accidents and 161 fatalities.

Based in Virginia, the Flight Safety Foundation provides three accident/incident databases, including a global database with 23,000 airliner (more than 12 passengers), military transport, and corporate jet aircraft accidents dating back to 1919.

“There definitely have been some [statistical] anomalies” in 2025, Warner says. “But if we look at loss fatality trends, they [have] consistently declined decade-over-decade since the 1970s.”

Nevertheless, aviation insurers are currently contending with several cost pressures, including stiff competition, rising reinsurance costs, social inflation, and increasing claims and repair costs. “That’s creating a definite squeeze on insurers’ results,” Warner says.

Some signs point to potential aviation market shifts in 2026, though it’s not clear what that will mean for insurers, Warner suggests.

“Clients have enjoyed a very buyer-friendly market for the last few years, and we’re starting to see some shifting in that sort of [underwriting] behaviour,” he says. “[Market] segments and clients with claims activities, and clients with large limits that require access to global markets, they’re facing a more challenging Q4 and likely into 2026 as well.”

Profitability problems

Airline clients whose portfolios have become unprofitable for insurers are beginning to see “real scrutiny of those results,” says Warner.

Next year, the market is expected to fragment, with some clients landing good renewal outcomes and others facing wave-offs.

Although safety trends continue to improve industry-wide, the financial impact of accidents on insurers remains significant, increasing aviation insurers’ scrutiny of individual client risks and safety practices.

As the market fragments, clients are wise to set themselves up for a favourable renewal, Warner says.

“Now is a really key time for clients to have a story to tell around their safety investments and the actions that they’ve taken to minimize their claims and maximize their safety,” he says. “It’s really key for clients to differentiate themselves in this market, whereas in the past, perhaps insurers were looking at a portfolio-wide basis” when underwriting.

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“Start your renewal process early. Engage with your insurers to address their concerns,” he adds. “An open dialogue is really key.”

One thing working in the aviation industry’s favour is that it tends to respond to disasters by relying on one of its core strengths — information-sharing. That helps improve safety within the industry as a whole, as Warner notes.

“Airlines are competing on price, they’re competing on a number of different factors, but when it comes to safety, they’re very collaborative,” he says. “Following any major incident, the local aviation safety investigative authorities, such as the Transportation Safety Board [of Canada], are going to conduct a thorough review and share information.

“Regulations are updated. Airlines’ processes and procedures are updated. The safety records have improved significantly as a result of this collaborative, industry-wide approach.”