08 January 2026
General Aviation Market Update Q4 2025
As we reach the end of 2025, we are afforded an opportune moment to reflect upon what has been an extremely challenging year for the General Aviation (GA) insurance market. The abundance of capacity that has characterised the sector throughout the year has continued to deliver favourable conditions for aircraft owners and operators, despite a backdrop of significant losses and mounting concerns amongst insurers regarding pricing adequacy. In this edition of Plane Talking, we examine the key trends that have shaped 2025 and look ahead to what lies ahead as we enter 2026.
2025, A Year of Continued Rate Softening
As was predicted in previous editions of this publication, General Aviation Hull and Liability rates have continued to soften throughout 2025. The pace of rate reductions, whilst still notable, has moderated compared to the aggressive decreases witnessed in 2024 and through the first six months of 2025. Through Q3 2025, we observed rates continuing to decline across most segments of General Aviation, though insurers have become increasingly vocal about their concerns regarding the sustainability of current pricing levels.
This is certainly good news for General Aviation insurance buyers, at least in the short term, but it remains to be seen if this is a sustainable situation in the medium and long term. Much will depend upon the frequency and severity of losses in the sector and the continued availability of capacity.
Throughout 2025, we have seen a significant number of buyers taking advantage of new multi-year policy periods and extending existing long-term policies offered by insurers.
Securing multi-year terms at current favourable rates has proven an attractive proposition. However, clients should work closely with their brokers to ensure that policy wordings provide sufficient flexibility for operational changes over these extended policy periods.
Rising Attritional Losses
Beyond the headline-grabbing catastrophic events, the General Aviation sector has experienced a steady increase in accident rates throughout 2025 across all segments.
These incidents are just a small snapshot of the varied losses the General Aviation sector experiences on a day-to-day basis. Overall, losses are widely recognised to have normalised following the industry's recovery post-pandemic, and General Aviation insurance claims are also increasing in severity, driven by:
- Higher aircraft values
- Increased repair costs
- Rising liability awards
- Increased cover afforded by Insurers during the ‘soft cycle’
Attritional losses, which are smaller claims that insurers typically absorb before reinsurance coverage applies, are becoming more impactful due to the reasons outlined above. These losses continue to impact insurer profitability and are prompting insurers to work closely with risk managers to identify and mitigate risks.
Insurer Profitability: Walking a Tightrope
Although there is a general feeling among insurers that current pricing levels are insufficient to return an acceptable underwriting profit, significant overcapacity remains in the sector. Even though many insurers will lose money in both the 2024 and 2025 underwriting years, the drive for market share and the availability of relatively cheap capital have sustained the competitive environment.
It is widely accepted that several significant losses in the GA sector will not significantly impact the current softening of rates, at least in the short term. Only a reduction in available capacity, a significant increase in the cost of reinsurance, or less available quota-share capacity will be the catalyst for market hardening.
However, there is a growing sense amongst legacy insurers, particularly those with established aviation portfolios, that the focus must shift from market share to profitability and long-term sustainability. Whilst newer entrants may be content to accept underwriting losses as they build their portfolios, established carriers are increasingly questioning the wisdom of competing at unsustainable price levels. This tension between established and new market participants may well come to a head in 2026.
Looking Ahead to 2026
A shift in the relationship between Airline and General Aviation market rating?
Historically, the rating cycles in the General Aviation insurance market have tended to follow those in the airline sector, albeit often with a lag of six to twelve months. This correlation has been driven by several factors, including shared reinsurance capacity, insurers operating across both sectors adjusting their overall aviation appetite in response to airline losses, and broader market sentiment influencing capital allocation decisions across the aviation insurance class as a whole.
However, the unprecedented level of overcapacity currently present in the General Aviation sector raises an intriguing question: will this historical relationship between the sectors continue to hold?
The airline insurance market has shown signs of stabilisation in 2025, with rate increases (circa 10%+) the norm in Q4, following the significant losses experienced during the early part of the year. However, the General Aviation market appears to be operating somewhat independently, with its own unique dynamics of new entrants, increased capacity, and fierce competition for market share.
It remains to be seen whether the traditional pattern will reassert itself or whether we are witnessing a decoupling of the two sectors. If the airline market does continue to harden in 2026, as most predict, it may provide an early indicator of potential changes ahead for General Aviation. Conversely, the significant overcapacity specific to the GA sector may insulate it from broader aviation market trends, at least in the near term. This is certainly a development worth monitoring closely as we move through 2026.
The abundance of capacity is expected to remain through Q1 and Q2 2026, with insurers continuing to compete actively for quality business. Clients with strong safety records, well-maintained aircraft, and good claims histories will be particularly well-placed to benefit from favourable terms and conditions.
However, as we look towards the latter half of 2026, there are several factors which could precipitate a change in market dynamics:
Legacy Insurer Discipline
A key development we anticipate in 2026 is that legacy insurers (those with established aviation portfolios and long-term market presence) will increasingly focus on profit and sustainability rather than market share. Having endured multiple years of inadequate pricing, these carriers are likely to prioritise rating adequacy and portfolio profitability over premium growth.
This represents a significant shift in mindset. Whilst newer entrants to the General Aviation market may continue to compete aggressively for business to build their portfolios and establish market presence, legacy insurers have reached a point where continued underwriting losses are simply not sustainable. We expect to see these established carriers taking a much firmer stance on pricing and terms in 2026, particularly for accounts that do not meet their profitability thresholds.
This divergence between legacy insurers seeking rating adequacy and newer market entrants still building their books will create an interesting dynamic. For buyers with strong risk profiles, this may present opportunities to work with hungry new capacity at attractive terms. However, those with more challenging loss histories or higher-risk operations may find that the most established and financially robust carriers are no longer willing to compete at unsustainable price levels.
The loss activity of 2025, including the American Airlines collision and other meaningful losses to the GA market, will continue to develop throughout 2026. Should liability awards reach the higher end of current estimates or should frequency and severity trends continue their upward trajectory, insurers may be forced to reassess their pricing models and risk appetite more fundamentally.
What This Means for Aircraft Owners and Operators
Whilst beneficial to aircraft owners and operators in the short term, persistent overcapacity presents long-term challenges for the stability of the General Aviation insurance marketplace. Industry stakeholders should prepare for eventual market withdrawals and pricing corrections.
Our advice to clients remains consistent: engage with the market early, work closely with your broker to present your risk in the best possible light, and consider taking advantage of multi-year terms where appropriate and available. Those who maintain strong safety management systems, invest in training and risk mitigation, and can demonstrate a commitment to continuous improvement will be best positioned to weather any market hardening that inevitably will occur.
Technological Developments and Emerging Risks
The General Aviation insurance market continues to adapt and evolve to anticipate our clients' needs. Insurers are increasingly leveraging data analytics, telematics, and flight data monitoring to enhance their underwriting capabilities and risk selection. For operators who embrace these technologies and can demonstrate their commitment to safety through data-driven insights, there may be opportunities to differentiate themselves in the market.
We are also seeing the emergence of new risks and exposures, particularly around:
- Electric Vertical Takeoff and Landing (eVTOL) aircraft
- Unmanned Aerial Systems (UAS) and drone operations
- Advanced Air Mobility (AAM) operations
- Cyber risks affecting aircraft systems and operations
These developments are creating new insurance products and specialised underwriting approaches. Clients operating in these emerging sectors should work closely with their brokers to ensure appropriate coverage is in place as the regulatory and operational landscapes continue to evolve.
To summarise
The good news is that the General Aviation insurance market enters 2026 from a position of strength, with abundant capacity and competitive pricing creating favourable conditions for aircraft owners and operators. However, the underlying fundamentals: inadequate pricing, elevated losses, and potential capacity reductions, would suggest that this cannot be sustained indefinitely.
For those looking to renew in 2026, early engagement with the market will be key. Market conditions can change quickly, and those who are proactive in their approach will be best placed to secure optimal terms and conditions. We encourage all clients to maintain close dialogue with their brokers throughout the year, not just at renewal time, to stay abreast of market developments and position themselves advantageously.
The aviation insurance industry is resilient and cyclical, continually adapting to new exposures, emerging technologies, and unforeseen events as they arise. Whatever challenges lie ahead, we remain committed to supporting our clients through all market conditions, ensuring they have access to the coverage and capabilities they need to operate with confidence and certainty.
US insurance market overview and the latest trends in the General Aviation sector
On one hand, this year’s headlines tell the story of several high-profile aviation disasters that are already pushing rates for airlines and posing major risks. On the other hand, an abundance of insurance underwriting capacity in the less-volatile General Aviation (GA) sector, particularly among operators with limits under USD 25 million, means rates for them will likely remain flat or continue to trend slightly downward in 2026.
Since 2021, with only a relatively modest increase in demand, the US aerospace insurance market supply has grown by 40% from 18 to 26 underwriters, with all new entrants primarily targeting GA business. This helped take the sting out of a hard market cycle that began in 2019, with some buyers starting to see some rate relief in 2024. That has continued to be the case for many in 2025. And while there will ultimately be a trickle-down effect from airline and major risk increases, those effects likely will not be felt in the GA marketplace until 2027 due to simple supply and demand competitive economics.
For those operators who carry limits of USD 50 million or more – even GA operators - now is the time to prepare for what might be coming in the near future. The number of aviation insurance underwriters capable of providing that type of capacity has not changed significantly since 2019, and many of these underwriters are the same ones that, along with their reinsurers, are experiencing the impact of recent major losses. Worse, a few of these markets might have under-reserved prior-year claims, and this adverse loss development could put additional pressure on them to make rate corrections sooner rather than later.
This bifurcation sets 2026 up to be another strategic year for aerospace insurance buyers, regardless of which end of the limits-buying spectrum.
High-limit buyers should initiate their 2026 renewal process as early as possible, consulting with their broker about current and evolving risk exposures, as well as the impact of the market on their specific operations. They should then design a proactive placement strategy that considers the potential for 2027 to usher in another hard market. Take every advantage of residual underwriting capacity and flexibility in 2026 to buttress against this possibility. If premium savings can still be realised, consider ploughing those dollars back into risk management and safety programs for the future.
Lower-limit buyers should consider purchasing higher limits of liability. The stakes are always higher in aviation, and many operators have discovered they had insufficient coverage to properly protect themselves only after a loss occurred. Options for higher coverage, from USD2m up to USD25m, should still be readily available in 2026 for those operators who can demonstrate their commitment to safety best practices and regular training. Even light aircraft owners who carry USD 100,000 per-seat liability sub-limits should at least consider removing those sub-limits, if possible, or perhaps increasing their per-seat sub-limit.
All in all, the 2026 US aerospace marketplace is expected to continue providing ample insurance capacity and options for most operators. It will be a good year to prepare for the possibility of another market swing in the longer term.
Jump back in to Plane Talking Q4 2025
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