With aviation claims costs continuing to rise, insurers are being forced to set larger reserves and scrutinize policies more closely. But while underwriters weigh pricing and coverage terms, independent adjusters are stepping into a more prominent role: bridging the gap between technical repairs and financial realities.
John Bayley (pictured), global technical director at McLarens Aviation, said that the independence and technical insight adjusters provide has never been more important.
“Independent adjusters have an essential role to play here,” he told Insurance Business.
With costs driven by complex OEM pricing, composite structures, and limited repair options, adjusters are increasingly collaborating with insurers and policyholders. Rather than simply verifying damage, their role now extends to helping shape financial strategies around repairs and replacements, ensuring they are handled in the most efficient and cost-effective way possible, Bayley explained.
“Their independent perspective grows in importance as claims values continue to climb,” he said.
This shift is also altering how insurers approach their own financial planning. Rising claim values are pushing carriers to allocate larger reserves for even routine attritional losses. At the same time, some policies are being examined more closely to determine how they respond in today’s cost environment.
Bayley noted that while adjusters focus on providing factual, technical reporting, the way those findings are applied falls to brokers and underwriters. By supplying a clear and independent view of escalating costs, adjusters give the market a firmer basis for decision-making at a time when expectations and exposures are rising in tandem.
The perspective is echoed in Canada, where Greg Smith, president of Crawford & Company (Canada), has described adjusters as moving from reactive problem-solvers to embedded strategic partners.
Rising client expectations, demographic pressures, and rapid technology adoption mean adjusters are increasingly being pulled into long-term planning conversations with insurers, not just post-loss logistics.
That evolution, Smith has argued, reflects a broader consolidation in the market: fewer vendors, but those that remain will need to combine scale, talent, and trust to stay relevant.
“The pace of innovation, particularly in technology, is faster than we’ve ever seen,” Smith said. “Ideas are moving from concept to implementation at remarkable speed, and that opens up tremendous opportunities for us to enhance service, improve efficiency, and deliver even greater value to our clients.”
Aviation, however, brings its own complexities. Unlike many other classes of business, there is often little flexibility in how a repair is carried out.
“New-technology aircraft have no cost relationship with older technology models, whether large or small variants,” Bayley said.
When OEMs mandate a particular replacement or inspection program, there is sometimes very little room to negotiate alternatives. That reality makes the independent adjuster’s role even more critical, because they can set clear expectations with all parties.
The scale of the challenge is underscored by the latest McLarens Aviation Claims Cost Index, which shows cost inflation well ahead of general economic trends. Manufacturer price lists are rising by roughly 7 percent a year on core items, while maintenance, repair, and overhaul (MRO) providers continue to report bottlenecks and labour costs edging upward across regions.
Even seemingly minor components illustrate the point. Engine fan blades – critical as the first line of defence against foreign object ingestion – have climbed 5-15% in the past year alone, and nearly 46 percent since 2021 for one widely used engine type. For Bayley, those numbers highlight why today’s attritional claims can no longer be treated as routine.
Looking ahead, Bayley said the pressures weighing on aviation claims are unlikely to ease quickly. Even as broader economic inflation shows signs of moderation, the cost environment specific to aviation remains tied to more stubborn structural forces.
“We anticipate that ongoing elevated costs will persist through the remainder of 2025 and into 2026,” he previously told Insurance Business.
He added that there are no clear signs that the imbalance in labour, facilities, and some critical parts supply will resolve in the short term.
“Power-by-the-hour contracts, for example, have increased by 3-7% this year among major providers. While broader economic inflation has moderated, the aviation claims environment is shaped by more structural issues, from OEM pricing policies to the high capital costs of new-generation aircraft technology, indicating that pressure is likely to persist,” he said.
