Aviation reinsurance underwriters are expected to implement tighter renewals by the end of 2025 as they struggle under the pressure of major claims, but direct insurers will be able to negotiate relatively modest renewals in early 2026, WTW said.
WTW noted in its latest aerospace insurance market renewal outlook that while rumored 2026 renewal reinsurance growth is lower than expected, further price increases in the major treaty reinsurance layers could make purchasing this layer uneconomical. This would force direct insurers to retain a greater proportion of risk on their own balance sheets, potentially leading to greater scrutiny of underwriting decisions.
The capacity of the aerospace reinsurance market remains broad. WTW said it will continue to monitor this area closely as changes there could impact direct insurers’ underwriting strategies.
WTW said the strong capacity of the aerospace insurance market continues to provide a degree of choice and competitive pressure for insureds. This environment should help moderate pricing outcomes, although challenges may arise in seeking spare capacity.
Significant claims in 2025 have thrust the aviation insurance industry into the spotlight, with underwriters needing to justify their strategies to senior management, especially as margins are likely to be constrained at current pricing levels.
Regarding the outlook for 2026, WTW said: “The key message from the 2025 Q3/4Q Willis Aerospace Insurance Market Update is that the market has not yet emerged from relative softness, and this message remains broadly applicable. Aerospace insurers continue to operate in a very competitive environment, which has suppressed price increases for insureds, which is profitable for insurers, demonstrating proactive risk management strategies and working with insurance partners in a thoughtful manner.”
“While conditions remain favorable for buyers, insureds should always be prepared in advance in case reduced capacity results in changes.
“Even now, insurers are reviewing their portfolios and strategies for specific sub-sectors. The best advice for insurance buyers is to identify areas of focus for insurers and work with brokers to develop strategies to address these in a structured and timely manner. Good data and early engagement remain key to achieving the best outcomes.”
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