The aviation insurance market continues to absorb legal and operational pressures without broad changes to premium levels.
According to Gallagher’s Q2 2025 Plane Talking report, available capacity remains high, helping to maintain pricing stability even as claims activity and legal developments increase.
A significant factor under review by reinsurers is the UK High Court decision on the Russia aircraft lessor claims. The ruling confirmed that losses occurred when the Russian government introduced export bans on leased aircraft in March 2022, applying to 147 aircraft and related equipment valued at over US$4.5 billion.
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Payments from insurers are due by July 2, though appeals are pending. Gallagher notes that while the direct market has not seen immediate pricing reactions, reinsurers may revise terms later in the year depending on the final resolution of the case.
Claims from large-scale events continue to mount. Gallagher reports that the crash of Air India flight AI171 could result in losses in the low hundreds of millions. The report also mentions ongoing concerns related to geopolitical volatility, including increased risk exposure in areas such as the Middle East and South Asia. These factors may influence underwriting and risk aggregation decisions, particularly for reinsurers exposed to multiple regions.
Despite these developments, overall market capacity remains strong. Gallagher notes that recent exits, such as Swiss Re, have had limited impact. New players – including Whitecap Re and XS Global – are entering the space, keeping downward pressure on rates.
However, insurers with legacy exposures are facing internal pressure to improve profitability, which could lead to rate adjustments by year-end.
The report also outlines a shift in how aviation risk is managed. Cyber, supply chain, and political risks are becoming more prominent, with many insureds turning to self-insured retentions, captives, and multi-line coverage programs. Cyber coverage, in particular, remains fragmented, with gaps in policy language and low modeling confidence around aviation-specific digital threats.
Claims resolution remains a friction point, especially within co-/reinsurance structures where delayed settlements can occur.
Gallagher highlights the need for technological adoption in claims and underwriting processes to improve efficiency and reduce inconsistencies.
While conditions remain steady for now, Gallagher suggests that the upcoming Q4 renewal season may bring tighter underwriting, especially if further large losses emerge or reinsurance pricing begins to shift.
What should reinsurers anticipate if litigation outcomes and systemic risks continue to expand? Share your view in the comments.
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