Title: The international aviation insurance regime in times of industry uncertainty

Authors: Triant Flouris, Paul Hayes, Kuntara Pukthuanthong-Le, Thomas Walker

Addresses: Daniel Webster College, Nashua, NH, 03063, USA. ' Ascend Worldwide, London TW6 2AS, UK. ' Department of Finance, San Diego State University, San Diego, CA, USA. ' Department of Finance, Concordia University, Montreal, QC, H3G 1M8, Canada

Abstract: The aviation industry has been hard hit in recent years. While there are numerous factors that have contributed to the industry|s dilemma, rising and volatile insurance premiums – particularly after the events of 9/11 – have posed a particular problem for many airline managers. Despite a general trend for accident rates involving commercial passenger airplanes to decrease as aviation technology has advanced over the years and airplanes have become safer, the aviation insurance market has been far from stable. This paper provides an overview of how the aviation insurance industry works and how it has changed in recent years. The authors take a look at how the risk is spread between insurers, how insurers treat deliberate acts of violence and, lastly, how insurers price the risk. The authors| paper shows that the aviation insurance market has undergone considerable changes in recent years and that it has adjusted to the post 9/11 aviation insurance realities being reasonably ready to handle events of an even more catastrophic magnitude.

Keywords: aviation industry; aircraft accidents; aviation insurance; risk assessment; risk pricing; September 11 2001; 9/11; airline management; passenger airplanes; commercial airplanes; acts of violence.

DOI: 10.1504/IJPL.2009.024476

International Journal of Private Law, 2009 Vol.2 No.4, pp.343 - 357

Published online: 06 Apr 2009 *

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