After a compulsory one-year break: Allianz warns of new flight risks

"Rusted" pilots and angry passengers - the insurers in the aviation industry are preparing for completely new risks after the end of the Corona crisis.

When flight operations slowly started up again at the beginning of the year, dozens of pilots reported errors - for example during landing - because they lacked flight practice, reported Axel von Frowein, who is responsible for aviation at Allianz's industrial insurance division, AGCS.

In the USA alone, the airlines reported rioting passengers in 3,000 cases, who defended themselves against the mask requirement - in normal years there are 150. They often complained afterwards of discrimination. "Such incidents occur less frequently in Europe, but they do happen too," said the AGCS aviation division's head of claims for Central and Eastern Europe, Till Kürschner.

With flight operations sluggish during the corona pandemic, damage at AGCS fell by a good third because fewer passengers fell on the way to the plane or their suitcases got lost, as Kürschner said. But that is only a temporary effect. “We expect claims activity to return to a normal level as soon as passenger numbers rise again.” Some airlines wanted to fly again at 70 percent of their capacities by the end of the year.

But the industry has changed, say the Allianz managers. In the medium term, she is facing a shortage of pilots, which means that many aircraft are threatened with being controlled by inexperienced pilots. The pandemic has also accelerated the replacement of older machines with new, smaller ones, where repairs would be more expensive because of new materials. According to AGCS data, collisions and crashes were responsible for 30 percent of the reported insurance claims from 2016 to 2020, but for more than half of the losses of around 14.5 billion euros. Incorrect processing and maintenance accounted for 13 percent of the damage and 24 percent of the damage.

AGCS therefore said goodbye to parts of the business in the restructuring of the division, which had been struggling with losses for years, said von Frowein, for example from the insurance of helicopters and aircraft suppliers. “In 2020 we had the most difficult negotiations to push through price increases in the biggest crisis in commercial aviation.” After several years of loss, the combined ratio is below 100 again. “Depending on the segment, we're on the right track, but in some cases we're still not quite where we want to be, ”said the AGCS manager.