Page 20 - World Airnews Magazine May 2020 Edition

AVIATION AVIATION
INSURANCE INSURANCE

AVIATION INSURANCE IN directly arising there from. A general aviation Insurers will often write insurance advice and cover to our aviation clients.

for each of these sectors and, to an extent,
grounding under the current circumstances,
which arises from government decree, does losses in one sector will be balanced by WAN: WHAT MAKES DJA AVIATION
STAND OUT FROM THE OTHERS?

A COVID -19 CLIMATE not trigger this type of coverage. profits in others. At present, however, GS: DJA Aviation is SA’s longest-established
all four sectors have been virtually shut

Individual aircraft owners should discuss

down with a concomitant loss of premium
their specific situation with their insurance

organisation, having been formed in 1976
brokers, who will then be able to discuss income for the aviation insurance market. specialist aviation insurance broking

available options with the Insurers con- Many aviation businesses will likely be by now-retired founder Dennis Jankelow.
World Airnews editor Heidi cerned. In some cases, the Insurers may unable to recover once the pandemic has All the senior insurance specialists at DJA
Aviation have been with the firm for in

agree to reduce coverage or may simply
passed and this will create a permanent loss
Gibson asked SA’s longest- note the circumstances and review the po- of income to aviation Insurers. All this will excess of 20 years. The company’s sole

established specialist sition at the end of the lockdown period, or result in Insurers needing to review their busi- mission is to serve its clients and provide
ness plans and it is quite likely that we will see
them with the peace of mind they require
the expiry of the policy, whichever is sooner.

Some commercial enterprises may carry
aviation insurance broking business interruption insurance, but this is further contraction of the aviation insurance in order to achieve their aviation-related
aims and objectives without suffering

market as Insurers elect to withdraw from

organisation director not available from the aviation insurance this class whilst they concentrate their efforts financially in the event of losses occurring.

DJA Aviation refers to its mission as The
Graham Speller to provide market and there is some doubt as to the in other, more sustainable, classes. Right Approach and it is a philosophy to
Quite apart from the potential human loss

extent to which Insurers will consider
his outlook for the state coverage to be triggered by communicable to COVID-19, we are likely to see jobs being which the company and all its 35 directors,

brokers and employees are fully committed.
disease pandemics such as COVID-19, given
lost in the aviation insurance market, as Insur-
of the aviation insurance the general requirement that the business ers, brokers and associated service providers DJA Aviation has been responsible for the

sector in South Africa and interruption should be caused by property are unable to survive, downsize their aviation development of several aviation insurance
activities or merge with others. The light at

damage and, even where a non-damage
products that remain exclusive to this day

the challenges presented extension for communicable diseases is the end of the tunnel may be an approaching and continues to develop new products

included, this is usually limited to specified
train. However, we will ultimately be left with

and enhancements for the benefit of its
by COVID 19 notifiable diseases where there is an out- a smaller but stronger industry as all but the clients. With strong Insurer-relationships

break at or near to the Insured’s premises, fittest will likely be hit by the train. throughout the South Africa and interna-

resulting in the premises being closed by tional insurance markets, DJA Aviation aims

order of a competent/public authority. WAN: WHAT KIND OF NEW AND to provide insurance programmes for its cli-
relatively few new aircraft being injected into navigation services, etc. This market has INNOVATIVE WAYS HAS THE ents that reflect a perfect balance between

the system means that Insurers are facing also suffered substantial losses in recent WAN: WOULD IT EVER BE POSSIBLE COMPANY EMPLOYED TO GAIN Coverage, Cost, Security and Service. Q

aptain AG Lamplugh, a British pilot increasing pressure to increase premium levels years, including the 737 MAX losses and TO INSURE AGAINST THIS TYPE OF NEW BUSINESS AND SUSTAIN AND
PHENOMENA? AND IF NOT WHAT
SOLIDIFY YOUR
Cfrom the early days of aviati on, in order to survive. Naturally, brokers and subsequent worldwide grounding, which IS THE BEST COURSE OF ACTION ORGANISATION?

once famously said “Aviation in itself is their clients resist those increases, but the have led Boeing to present significant claims AVIATION OWNERS SHOULD TAKE GS: The key element

simple truth is that the aviation industry needs
not inherently dangerous. But to an even a healthy insurance sector to support it. to the market insurance market. The Space IN THE CURRENT CIRCUMSTANCES. to grow and sustain NOT YOUR BEST LANDING?

market has been hit hard, too, with multiple
greater degree than the sea, it is terribly The airline insurance market has taken satellite launch failures, resulting in sub- GS: There are no insurance products our business has been

unforgiving of any carelessness, incapacity some huge hits in recent years, including stantial losses for underwriters. Finally, the currently available, of which I am aware, that the development and Insure now with

or neglect.” well-publicised losses such as MH370, MH- General Aviation market has seen significant would provide benefits to aircraft owners sustaining of both DJA Aviation.

WAN: THE GENERAL AVIATION 17, Lion Air, Ethiopian Airlines and Ukraine losses, particularly arising from commercial arising from their inability to operate their our relationships with
aircraft during periods of pandemic or other

insurers and equally

SECTOR OF THE AVIATION International, to name just a few. Added services in the tourism area, coupled with general health emergencies. As mentioned, the development

INSURANCE MARKET HAS BEEN to this, the current COVID-19 pandemic general attritional losses against historically coverage can be restricted to “ground/ of our staff. We see

HARDEST HIT IN THE RECENT PAST has seen 90% of global airline activity low aviation insurance rates. the relationship with

AND IT IS UNDER HUGE STRAIN. completely at a standstill, which will result WAN: AS THE OLDEST AVIATION stored”, at a reduced premium. The best

WHAT ARE YOUR COMMENTS? in airline failures and reduced income INSURANCE BROKERS IN THE course of action would be to communicate insurers as a partner-
ship, such that we
with their insurance brokers and allow their
which, notwithstanding the concomitant

GS: The aviation insurance market as a reduction in operational losses, will further COUNTRY COULD THE COVID19 brokers to advice on possible options and are, to the best of our

whole has been loss-making for the past deplete insurers’ reserves. VIRUS AND ITS ASSOCIATED negotiate with Insurers on their behalf. ability, able to obtain

three years, following a decade on decline The Aerospace market includes manu- EFFECTS IN ANY WAY BE INCLUDED the right cover for
in premium income, which started in about facturers, maintenance, repair and over- IN ANY AGREEMENT? AND WOULD WAN: CAN YOU DESCRIBE our clients. With the
2003, shortly after 9/11. The four sectors haul organisations, airports, air traffic and THERE BE ANY KIND OF RELIEF FOR THE MARKET THAT YOU FIND substantial changes DJA Aviation is the longest-established aviation insurance

of the market - General Aviation, Airline, OWNERS? YOURSELVES IN, THE CHALLENGES being experienced broking specialist in the South African insurance market and a
Aerospace and Space - have each had their GS: Whilst insurers are mindful of the AND THE POSSIBLE POSITIVE in the entire aviation market leader in developing customised insurance products for

own issues to deal with, but rarely have all predicament faced by many commercial OUTCOMES FOR THE NEAR AND NOT insurance market, we the aviation industry. We employ more than 30 staff and utilise
four been hammered simultaneously, which aviation enterprises, with an almost total SO DISTANT FUTURE? consider this a key this great depth of aviation insurance knowledge, skill and

is what we’ve seen in the past 12-18 months. shut down of all but the most essential GS: The immediate challenge facing the differentiator. expertise to manage our clients’ aviation insurance portfolios.

In South Africa, the GA insurance market aviation activity, there is a limit to the relief aviation insurance market worldwide is Equally so is the

has been particularly badly affected by the that can be offered to aircraft owners. survival. Whilst insurance is considered an development of

increased cost of spares, virtually all of Where individual insurance programmes essential industry, most (if not all) business our staff. We are

which are imported, due to the decline in make provision for “lay ups”, this will allow premises have been closed and staff are continually up skilling

the value of the SA Rand. This has resulted for coverage to be restricted to “ground working from home during the lock-downs and training our staff

in significant claims cost escalations for risks” or “rotors not in motion” and for being experienced in most countries and encouraging new

even the simplest and most straightforward a premium adjustment (credit) to be around the world, particularly US, Europe entrants into the PROUD SUPPORTER OF

THE SOUTH AFRICAN
of losses. SA is also becoming known as calculated and paid at the expiry of the and the USA. aviation insurance GUIDE-DOGS ASSOCIATION

a litigious society and Insurers are facing policy, subject to no claims having arisen. Currently, all aviation Insurers remain op- broking industry.

increased numbers of claims by passengers This provision is usually only available under erational but there are significant concerns This is mission critical Defining the Right Approach to Aviation Insurance

and other parties affected by aircraft ac- policies covering fleets of aircraft. Where regarding the future, given the aviation in- in maintaining our

cidents, and the average quantum of such “loss of use” insurance is affected, coverage surance market’s reliance upon a viable avi- sustainability, and www.dja-aviation.co.za | Tel: 0800 FLYING

claims is also increasing substantially. is only triggered by accidental damage to ation industry, whether General Aviation, ensuring we continu-

Added to this, an aging fleet of aircraft with the aircraft and is limited to loss of income Airline, Aerospace or, indeed, Space. Major ally provide the best An Authorised Financial Service Provider FSP No. 15808

World Airnews | May 2020 World Airnews | May 2020
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