Looking for Answers HAI launches the HAI Aviation Insurance Working Group.
DURING ITS JUNE MEETING, the HAI Board of Directors identified the need for an aviation insurance working group to address the issue of rising premiums for rotorcraft operators. Over the next several months, Chris Martino, HAI’s senior director of operations and international affairs, will head the search for participants. “The skyrocketing costs
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of insurance across the entire aviation industry have people concerned. The board believes that by providing industry with a way to work closely with insurance companies, we can address concerns and provide some relief to rotorcraft operators,” says Martino. The board intends for the working group to include a mix of insurers, brokers, and operators as well as representatives from every industry sector, including air ambulance, utility patrol, construction, aerial firefighting, and others. The diversity of rotorcraft operations poses challenges for insurers when it comes to assessing risk. “Not all insurance providers are the same, and not all insurance issues are the same for all operators. For example, someone lifting timber out
HAI members interested in learning more about the Aviation Insurance Working Group should contact Chris Martino at
chris.martino@
rotor.org.
of the Pacific Northwest with a big helicopter may have completely different insurance needs than a tour operator with a smaller helicopter. We want and need a variety of perspectives,” Martino says. “By bringing the two groups together, there’s an opportunity to bridge some knowledge gaps and help insurers feel more comfortable with the risk they’re taking to provide insurance,” he says. “Through the working group, we can identify key factors that tie directly to a culture of safety and allow an insurance company to say, ‘We see you’re operating at this level,
and therefore you’ll get this discount.’ ” In addition, Martino hopes to get answers for
rotorcraft operators, including the effect on the helicopter industry of big payouts on behalf of large, commercial fixed-wing operators, as in the Boeing 737 Max accidents. Underwriters typically hold that type of information closely, but the hope is that they’ll share more details in the collaborative atmosphere of the working group, where everyone has the same goal: reducing the risk of incidents and accidents and providing affordable insurance solutions for helicopter operators.
accidents, according to their February 2019 article, “Maintenance and Inspection as Risk Factors in Helicopter Accidents: Analysis and Recommendations” (available online at https://
bit.ly/3QgPDWh). “Will all those things pay for themselves by reducing your
insurance rate? No, but what they will do is help you avoid an accident,” says Gardner. “Anyone who’s ever had one knows that the cost of an accident goes far beyond what the insur- ance company pays for.” In addition to minimizing their operational risks, helicopter
operators should develop a relationship with an underwriter rather than try to chase lower premiums, recommends Gardner. “Te best insurance rate is going to those who are not just the best risk but who are also cultivating a relationship with
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the underwriter. In the long run, you’ll get the best results by staying with an insurance company that fits your opera- tional style, understands your pressures as an operator and manages that, and writes it in accordingly,” he says. Another strategy is to increase your deductible. Insurance
companies look at an operator’s claims ratio, which is gen- erally the number of claims over the past five years divided by the total amount of the premiums paid. If an insurance company pays out on hangar rash and other small claims, an operator can quickly become underwater in their claims ratio. “Even the little stuff hurts. It’s not unusual to see a deduct- ible of 5% to 10% or even more,” says Gardner. “For easy math, consider that if you have a $1 million helicopter and 10% deductible, you’ll pay the first $100,000 of damage out
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