08 October 2025
Lead Lines: Turbulence on Lime Street
A contribution by Gareth Howell, Chief Underwriting Officer, Europe, Global Aerospace
Leadenhall Market has always occupied a special place in the heart of the insurance market. Walking through the cobbled streets last week, I was reminded of my formative days in the aviation insurance market, a graduate in a broking house, with everything to learn about this fantastic industry, steeped in tradition and history. Standing under Leadenhall’s magnificent roof, you feel a part of this history and the magic that surrounds it. And whilst the market still buzzes on a Thursday evening, the traders here are evolving, and it is much the same way in the surrounding streets lined with insurers, brokers and reinsurers.
Aviation has always sat in an interesting position in the commercial insurance marketplace, being a very small niche whilst also finding itself regularly in the spotlight. It is perhaps the allure of the aviation industry itself that attracts insurance entities into this specialist sector. Insuring flight takes us back to the early days at Lloyd’s, where innovators came to find solutions for the most complex risks, and aviation remains that way today – a complex industry, with complex risks.
Aviation insurance is a critical service, enabling a vital industry to operate by providing the balance sheet and risk transfer necessary to manage the cost of both frequent operational events and potential catastrophic loss. The headlines leading into 2025 brought this sharply into focus with news of multiple aviation accidents on a scale we have not observed for a number of years. The American Airlines mid-air collision with a US Army Black Hawk helicopter was a stark reminder that losses can occur in even the most developed aviation ecosystems. Combine this with the largest aviation claim in history arising from the Russian detention of leased aircraft, and the indicators are there for a turbulent time ahead.
At this point, calling upon my business background leaves me somewhat lacking, for on pure economics alone, certain parts of the aviation insurance market start to defy logic.
With a cursory look, aviation insurers have achieved good premium growth in recent years, with market premiums in 2024 exceeding USD8bn; however, a dive beneath the surface reveals a disparity between sub-class performance. In the airline sector, the 2024 market premium of circa USD1.7bn will be far surpassed by claims activity, with attritional claims, those under USD10m, accounting for around USD900m alone. This is before factoring in a sharp uptick in claims activity in the USD10m to USD50m range. For airline insurers, the premiums of the many are not sufficient to pay for the losses of the few, and aviation is once again in the spotlight. Whilst the airline class has been regularly underperforming, aerospace, banks, space and general aviation have also experienced increased loss activity which demands attention. Early in 2025, Lloyd’s stated that the aviation insurance market had moved to unsustainable levels; the premium volume is simply not keeping pace with the level of claims growth, whether that be from rising repair costs, increasing liability awards or simple accident frequency.
Whilst the airline class has been regularly underperforming, aerospace, banks, space and general aviation have also experienced increased loss activity which demands attention.
We can agree that a healthy supply of insurance capacity is necessary for the industry; clients have a choice, and coverage can be found for the most complex risks. Too much capacity and competition suppress pricing below the economic equilibrium. So, what does it take to succeed in such a marketplace? The insurance cycle has existed since the dawn of aviation insurance, and the leaders in this cyclical industry are those that excel at the core competencies while evolving to meet their clients’ needs. At Global Aerospace, we take great pride in our 100-year history, and yet it is not that history that drives us forward. Our people are at the heart of what we do. We are investing in recruitment, training and development across our business, enabling our employees and the next generation of talent to drive our business forward. We are also embracing new tools, and a vast pool of data is assisting us in making smarter decisions about our portfolio, helping us to refine strategies and navigate the cycle.
We should also remember that an oversupply of capacity can create demand-side opportunities – it is widely acknowledged that the insurance protection gap is widening, and many of the risks sitting on corporate risk registers lack a viable insurance solution. Growth, as is so often the corporate mandate, can’t come solely from a finite pool of risks. The aviation insurance industry excels at providing protection for property damage and liability events, and yet if you consider the risks facing aviation companies, many leaders will cite challenges such as workforce shortages, business interruption, regulatory changes, cyber incidents and sustainability. We need to be smarter as an insurance industry and work towards creating solutions for the uninsured risks. Put simply, a client-first approach.
Stepping back into Leadenhall Market, insurers could well learn something from the iconic clothing brand Barbour that stands proudly in the centre of the market. This 131-year-old icon of the fashion industry occupies its own premium niche. Proudly family owned and without quarterly stock market expectations, no aggressive growth targets and a solid reliance on the value of their products. With revenues of GBP322m, a 50% gross margin and profits of GBP39m, they consistently deliver sound financial results. The fashion industry attracts disruptors that succeed and fade with their trends. Succeeding over the long term, Barbour exemplifies that it can consistently deliver a valuable product, sold with financial discipline and adherence to their long-term strategy. The aviation insurance market could learn a lot from this unexpected parallel.
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Let's talk
Gareth Howell
Chief Underwriting Officer, Europe
Global Aerospace
The Walbrook Building he Walbrook Building 25 Walbrook London, EC4N 8AW
Arthur J. Gallagher (UK) Limited is authorised and regulated by the Financial Conduct Authority. Registered Office: The Walbrook Building, 25 Walbrook, London EC4N 8AW. Registered in England and Wales. Company Number: 119013.