10 April 2026
Aerospace Manufacturing & Infrastructure insurance market update Q1 2026
The Aerospace Manufacturing and Infrastructure sector insurance market continues to demonstrate robust capacity, offering insureds a range of options and fostering competitive pricing. This environment has helped moderate pricing outcomes, although challenges persist in accessing surplus capacity in some areas.
The significant airlines claims of 2025 have placed the aviation insurance sector under scrutiny, compelling underwriters to justify their strategies to senior management, particularly where profit margins appear constrained at current pricing levels.
The Aerospace Manufacturing and Infrastructure (AM&I) sector concluded 2025 with minimal changes compared to 2024. It was anticipated that the resolution of uncertainties surrounding Russia/Ukraine claims would significantly influence the major reinsurance renewals on 1 January, subsequently impacting all aviation sectors. However, while reinsurance rates did rise, the increases were not substantial enough to create a ripple effect within the AM&I sector.
Although 1 January has traditionally been a key renewal date in the aviation reinsurance market, several major programmes now renew on 1 April, 1 July, and 1 October. This shift could lead to further rate increases during 2026, potentially compelling insurers to retain more risk. This scenario could have two possible outcomes:
- Increased Underwriting Scrutiny: Insurers may focus on more profitable risks while avoiding those with challenging loss records.
- Pressure to Generate Premium Income: Insurers may prioritise generating premium income to cover reinsurance costs, which could sustain market capacity and competition, thereby preventing rate increases in the AM&I sector.
In our Q4 2025 report, we noted that trends in the airline sector often influence the General Aviation and AM&I sectors, albeit with a delayed and more measured impact. As of the conclusion of Q1 2026, there is still no indication of this upward trend being mirrored. Insurers’ attempts to secure premium increases during renewal negotiations are frequently tempered by the abundance of market capacity or growth in risk exposures.
While the overall AM&I market remains stable, certain sub-sectors, such as ground handling and Maintenance, Repair, and Overhaul (MRO), are facing heightened scrutiny due to more active loss records. Additionally, concerns over US litigation are growing, leading to reduced capacity in the London market for insureds with direct US exposures compared to those without.
Long-Term Agreements and Market Stability
Long-term agreements continue to serve as a key indicator of market stability. Despite insurers advocating for rate increases and market adjustments, these agreements remain widely available for accounts with modest growth prospects and low claims activity. Such agreements provide an excellent opportunity for clients to secure their positions through to 2027.
Loss Trends and Underwriting Challenges
Although the AM&I sector has not experienced catastrophic losses in recent years, large legal liability claims continue to erode the premium base. The long-tail nature of liability cases remains a challenge, as evidenced by the 2018 UK helicopter crash involving the Leicester City FC owner. The reserve for this incident was significantly increased in 2025, seven years after the incident following a GBP2.15 billion demand from the deceased’s family. This is not the only example of such claim deterioration which raises further concerns amongst insurers around reserving practices and their long-term profitability.
The potential impact of the UPS crash in Kentucky in November 2025 on the AM&I insurance sector is still uncertain. At least three aerospace companies have been implicated in lawsuits related to the incident. The extent of their involvement and the financial implications for the sector remain unclear but are expected to be significant, potentially influencing future pricing.
Key Challenges and Future Outlook
In our Q4 2025 Plane Talking edition, we predicted a shift towards more technical underwriting, with risks being assessed on their individual merits. While this trend has begun to materialise in 2026, a distinct change in technical underwriting practices has yet to emerge. The focus remains on profitability, with risks associated with active loss records requiring more extensive negotiations.
Insurers are increasingly seeking detailed information on how insureds are addressing industry challenges, such as talent shortages, training, and the infrastructure changes necessitated by advancements in sustainable aviation fuel (SAF), electric and autonomous vehicles, and eVTOLs. This demand for knowledge is expected to persist, alongside ongoing pressure to maintain profitability.
While the AM&I market is currently stable, it remains precariously balanced. Even minor disruptions could potentially destabilise the sector in the near future.
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