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PLANE TALKING AVIATION NEWSLETTER Q2 2016 EDITION

RENEWALS

LOSS ANALYSIS

MARKET NEWS

LEAD LINES

Following a quiet start to the year the second quarter (Q2) picked up the pace and brought the first...

The second quarter (Q2) followed a similar path to the start of the year as we observed a...

A brief round up of the latest market and industry news stories and personnel changes...

Preparing for the Catastrophic Aviation Event

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It is the call that keeps airline executives awake...

Executive Summary Navigating through Headwinds In this edition we find ourselves reporting on the figures and market conditions for Q2, whilst being mindful of the July renewals that are yet to hit our statistics. From our analysis it is clear that the Q2 renewals point to a significant deviation from the previously seen trend, with the results exhibiting a broader range of rate variation due in part to a distinct ‘three-tier’ divide that has developed between the major high-limit buying airlines, the lower-limit carriers and those distressed/loss active accounts. It seems there are signs of headwinds to come and our earlier predictions of a change in underwriting mentality appear to have had some merit. Recognising that a continuation of the previous trend would lead to another loss making year for underwriters, a more resistant and disciplined market has developed with a focus on self-preservation and a desire to improve the loss factor in their portfolios. Underwriting selectivity has notably increased with ever more emphasis on each individual risk and its particular circumstances. Whilst theoretical capacity levels still remain high, the competitive capacity within this is now far more limited than most buyers imagine. Add to that the fact that some placements have experienced reduced differentials between lead and following prices, the actual movement delivered to an airline is often notably different to that which the change in lead price would suggest. Whilst overall market conditions still favour certain buyers and we do not expect a sudden reversal, it is evident that rate reductions appear to be slowing. Underwriting selectivity, high value attritional claims and the constant potential for a substantial loss means the opportunity of an upward movement in rates now perhaps outweighs the likelihood for further significant reductions. As such prudent insurance buyers are placing more emphasis on stability and budget certainty and recognising the value that long-term solutions and hedging structures can provide. 

2 AEROSPACE | PLANE TALKING | Q2 2016

Market Analysis THE DEVELOPMENT OF A ‘THREE-TIER’ MARKET From our analysis it is clear that the airline insurance market is now taking a considerable deviation from the long-term trend that we had been experiencing previously. On average the rate reductions seen across the airline market in Q2 were notably more tempered than those reported in Q1 and indeed those recorded over the last few years. Whilst the average figures alone suggest the idea that the market is beggining to harden, ultimately the devil is in the detail!

Tier Airline/Type A

• Airlines with low-limits. • Typically showing high fleet/ traffic growth.

As we look deeper in to the actual

now also witnessing a third grouping

underlying information, it is evident

which consists of airlines affected by

that a more resistant market sentiment

poor loss records – be that due to major

has developed and this has led to a

losses or poor attritional losses. Whilst

significant variation amongst the results.

in general these loss active accounts will

This disparity is borne largely from an

have always experienced higher pressure

increase in underwriting selectivity as

on pricing in comparison to other ‘clean’

markets focus harder on pricing and on

renewals, in the current environment

limiting potential losses to their portfolio.

they are receiving greater scrutiny and

As a result of these factors the ‘two-tier’ market that has existed for sometime appears to have evolved in to a new ‘three-tier’ market. Now in addition to

attention from underwriters and ultimately are now attracting far less capacity. Below we provide an overview of this ‘three-tier’ perspective as we seek to

the divide exhibited between the results

help improve the understanding of what

of the high-limit airlines and that of the

is happening in the market at present.

low-limit, high growth carriers we are

Market Sentiment

Typical Rate Change

• Rate reductions available based on high exposure growth. • Surplus of capacity due to lower limits. HARD

SOFT

HARD

S

SOFT

HARD

SOFT

HARD

S

SOFT

HARD

SOFT

• Typically lower valued aircraft. B

• Airlines with high-limits.

• Generally flat renewals.

• Typically showing low fleet/ traffic growth.

• Restricted capacity due to high-limits.

• Typically higher valued aircraft. C

• Differentials between lead and following prices being squeezed. HARD

• Airlines with major losses.

• Facing rate increases.

• Airlines with poor attritional records.

• Capacity limited due to the loss factor.

• Airlines with adverse loss ratios

• Typically losing insurers money over a two

HARD

SOFT

or three year period.

HARD

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Q2 Renewal Analysis EXPOSURES

PREMIUM

RATES

For the largest part the renewals in Q2

Whilst a minimal reduction can be

Reductions are still available

continued to show growth in the usual

seen for the renewals in Q2, essentially

dependent on each carrier’s individual

areas with steady increases seen in both

premium was maintained on an ‘as

circumstances, exposures and claims

passenger numbers and fleet values.

before’ basis.

history. When viewing the individual

The smaller low-limit buying carriers

What reductions in rates we have seen

accounted for the largest increases in

have been driven by growth in exposures

exposure growth with most of their larger

and therefore this has had a tempered

higher-limit counterparts presenting less

effect on premium levels.

significant, and it would appear that the market seems to be adopting a new ‘three tier’ view to renewals as mentioned on the previous page.

growth than the quarterly average.

Exposure Exposure Exposure

results the variation is therefore

Premium Premium Premium

Rates Rates Rates

Year on Year Exposure % change.

Year on Year Premium % change.

Year on Year Rate % change.

Q2. 2016 versus Q2. 2016 (Like for Like basis) Based on the latest Information as at 30 June 2016. Lead basis. Source: JLT



10%10%

10%

10%10%

10%

10%10%

10%

5% 5%

5%

5% 5%

5%

5% 5%

5%

0% 0%

0%

0% 0%

0%

0% 0%

Change

15%

Change Change

15%15%

Change

15%

Change Change

15%15%

Change

15%

Change Change

15%15%

0%

-5%-5%

-5%

-5%-5%

-5%

-5%-5%

-5%

-10% -10%

-10%

-10% -10%

-10%

-10% -10%

-10%

-15% -15%

-15%

-15% -15%

-15%

-15% -15%

-15%

Q2 Q2 2016 2016

Average Average FleetFleet ValueValue AveragePassengers FleetPassengers Value

Q2 2016

Passengers

Average Average Fleet Fleet Value Average Value Fleet Value Passengers Passengers Passengers

Hull Hull

Q2 Q2 2016 2016

Liabilities Liabilities Hull

Liabilities

HullHull Hull Liabilities Liabilities Liabilities

Q2 2016

Hull Hull

Q2 Q2 2016 2016

Liabilities Liabilities Hull

Q2 2016

Liabilities

HullHull Hull Liabilities Liabilities Liabilities

Whilst we report renewal analysis in each edition, the figures are purely an average of the combined results and therefore caution needs to be applied when viewing them as they do not always reveal and portray an accurate picture of the level of reduction/ increase that each carrier is receiving. When viewing the individual results the variation is often significantly greater than the average figures would suggest. As always we seek to ensure that our reporting is as accurate as possible, however with increasing variation and complexity existing in the market at present it is important to highlight the ambiguous nature of the statistics presented. In addition to market conditions, each placement is often subject to a number of other issues that affect its result, such as specific deal factors relating to a particular Leader or markets. It is therefore important that we highlight that the numbers we report on are based on London Lead terms and as such are often influenced by additional factors like Leaders fees, Leader changes and special additional premiums applied for a loss. Reduced differentials between the Lead price and the following market prices also needs to be considered.


Renewal Summary Q2 AIRLINE RENEWALS

FORTHCOMING AIRLINE RENEWALS

Following a quiet start to the year the

FORTHCOMING AIRLINE RENEWALS

second quarter (Q2) picked up the pace

July is now the second busiest month

July Renewals

and brought the first assortment of major

The 5 largest airline renewals in July are

renewals to the market.

shown in the table below:

From our analysis of the Q2 renewals

Renewal Date

Expiring AFV (USD)

HNA Group (Hainan)

8 Jul

23.4bn

FedEx Express

1 Jul

16.8bn

Singapore Airlines Group

1 Jul

14.5bn

Aeroflot Group

1 Jul

11.8bn

Indigo Group

1 Jul

8.5bn

Airline

there was little of note to comment on with no particularly unusual or surprising results witnessed. There were a number of placements that were extended in Q2 and which will now renew later in the year. As such we recorded 50 renewals for Q2 as opposed

grouping. ANA did not renew in June as Expiring AFV (USD)

Pegasus Airlines

24 Aug

2.7bn

Monarch Airlines

1 Aug

1.4bn

Kelowna Flightcraft Group

1 Aug

79m

it had cancelled and replaced its policies at the end of 2015, it is now scheduled

Renewal Date

Expiring AFV (USD)

InterJet

9 Sept

2.3bn

Vistara

11 Sept

456m

VIM Airlines

10 Sept

393m

BoraJet

29 Sept

358m

Tarom

1 Sept

200m

Airline

The July renewals list brings a large number of major airline group placements to market including HNA, Airlines, Indigo the low cost carrier

The largest of these and indeed the biggest placement of July is the HNA Group of China, which renews this year having changed broker from Aon to JLT. French carrier Aigle Azur an overseas subsidiary of HNA has also changed

Other omissions from this year’s Q2

company of HNA will now also renew in

renewals list include, regional carrier

July as opposed to in August.

CommutAir which will now renew in

Argentinas and Air Namibia all extended

are shown in the table below:

of the total airline premium for the year.

its broker from Aon to JLT. Additionally

Continental Group. Arik Air, Aerolineas The 5 largest airline renewals in September

renewals account for approximately 8%

to renew in December instead.

December after it joined the United September Renewals

in excess of USD1 billion. The July

grouping and Republic Airways Holdings.

Peach Aviation and Star Flyer under its

Renewal Date

Airline

of which almost half have fleets valued

The largest renewal placement missing

also includes Air Do, Ibex Airlines,

shown in the table below:

represents around 47 airline placements,

Singapore Airlines, Aeroflot, Ethiopian

carrier All Nippon Airways (ANA), which

Just 3 airlines now renew in August as

renewals that come to market. July

to 61 in the same period last year.

from the Q2 list was that of Japanese August Renewals

of the year in terms of the number of

their policies until July whilst VIM Airlines

Africa World Airways a joint venture

The Singapore Airlines Group is another significant placement that also renews in July with a change in broker, with JLT replacing Willis as the Lead broker and

and Borajet extended to September.

Marsh being appointed co-broker. This

One change of broker was recorded in

Singapore will also join the placement.

Q2 as regional carrier Chilean Airways moved from Aon to JLT.

year NokScoot of Thailand and Tigerair

Air Côte d’Ivoire the national airline of Ivory Coast also renews with a change in broker after moving to JLT from Willis. One other potential renewal change of note involves the TNT placement, which looks set to dissolve as its operations are split up following the recent acquisitions of its various subsidiaries by FedEx and ASL Aviation respectively. 

WWW.JLT.COM | PLANE TALKING 5

Q2

Loss Summary

Q2 AIRLINE LOSS SUMMARY*

Q2 AIRLINE LOSSES Batik Air & Trans Nusa

B737-800 & ATR42600 (PK-LBS) & (PK-TNJ)

04/04/2016 0 Fatalities

Indonesia

USD67.8m

Whilst performing a takeoff at night the Batik Air aircraft collided with a Trans Nusa ATR which was being towed across the same runway. Both aircraft sustained considerable damage. There were no injuries or fatalities reported.

TAME Ecuador

ERJ 190-100 (HC-COX)


HULL LOSS ESTIMATE:

Ecuador

LIABILITY LOSS ESTIMATE: USD85.0m NUMBER OF FATALITIES: 73

On landing at Cuenca Airport, Ecuador in rainy conditions, the aircraft skidded off the end of the runway before coming to rest in soft ground on its tail and engines. The aircraft sustained substantial damage but no passenger or crew injuries were reported.

All Known Airline Losses Net of

100

500

Afghanistan

80

60

Egyptair

40

The aircraft was en-route at FL370 and about to enter Egyptian airspace when communication with the aircraft ceased. The aircraft 200 was later found to have crashed into the Mediterranean Sea. All 56 passengers and 10 crew lost their lives.

20

United Parcel Service (UPS)

0

Hull

A320-232 (SU-GCC)

300 19/05/2016 66 Fatalities

100


MD-11F (N277UP)

Mediterranean Sea

EC Air/JetAirFly /TUI AG

Hull


Czech Republic

The aircraft was damaged by fire during third party cleaning of the aircraft in a Hangar at Prague Airport. The aircraft was in the colours of EC Air of the Congo but operated by JetAirFly/Tui AG. The extent of the damage sustained has yet to be confirmed.

Singapore Airlines


B777-300ER (9V-SWB)

90

60

30

Liabilities

B737-700 (OO-JJI)

120

South Korea

Accelerating for takeoff at Seoul Incheon Airport, 0the crew rejected takeoff at high speed 2015 2016 H1. 2015 2016 forMAY. unknown reasons,MAY. the aircraft subsequently overran the end of the runwayH1.coming to rest on soft ground and with nose gear collapsed. Liabilities

Deductible 150

The aircraft suffered engine failure on departure from Camp Dwyer Airfield on a cargo flight and lost height before crashing within the airfield perimeter. Seven of the nine crew lost their lives. 400

USDm

USDm

AN-12B (4KAZ25)


USDm

Silk Way Airlines

Singapore

Whilst on a flight from Changi Airport to Milan the aircraft was forced to return to Singapore after reporting an engine oil warning message. Shortly after landing a fire broke out causing damage to the plane’s right engine and wing. Airport fire services arrived and put out the fire. No injuries to the 222 passengers and 19 crew were reported.

0

Q2 2015

Hull

Q2 2016

Liabilities

*Figures shown are provided only as a guide. Not all losses include a reserve estimate and are reflected in the figures. Excludes Hull War hull reserves. Source: JLT.


H1

Loss Analysis

AIRLINE LOSS SUMMARY (JAN-JUN 2016)*

JUN

HULL LOSS ESTIMATE:

The second quarter (Q2) followed a

In addition to the fatal losses witnessed

similar path to the start of the year as we

in Q2, a number of other incidents look

observed a string of typical accidents

likely produce some reasonably costly

and incidents of varied nature.

Hull claims, especially if the aircraft

Of the three fatal accidents to occur in

USD144.69m

Q2, the largest was that of an Egyptair A320 aircraft which crashed in to

LIABILITY LOSS ESTIMATE:

the Mediterranean Sea killing all 56

USD115.50m

passengers and 10 crew on-board. The cause of the crash is uncertain at this

NUMBER OF FATALITIES:

Q2

166

NUMBER OF FATAL ACCIDENTS: 6

assessed by loss adjusters and therefore as yet we do not have accurate loss reserves to report on.

recovered both black boxes it could be

combined 2016 Hull and Liability figure

some time before it is clarified.

to around USD260 million for the year to

believed both the Hull and Liability and

500

these aircraft are in the process of being

The losses in Q2 have brought the

surrounding the cause of the crash, it is

Deductible

Total Loss (CTL). However at present

point and despite the search team having

In the meantime, due to the uncertainty

All Known Airline Losses Net of

involved are declared a Constructive

Hull War parties have mutually agreed to pay the Hull claim of USD18 million

date (excluding attritionals). As always we must note that this figure is subject to change, as not all recent losses recorded include a reserve estimate and are reflected in the figures.

equally (50:50) between the two policies,

As we have come to expect these recent

with150 scope

losses have 2000 had little effect on present

for an adjustment if the

uncertainty is later resolved. The liability

market conditions. 

aspect of the loss, regardless of the 400

120 circumstances, will be paid entirely by

1500 5 Year Average

90

USDm

300

USDm

USDm

the Hull and Liability insurers.

1000

5 YEAR HULL & LIABILITY CLAIMS* 60

200

2000

500 100

30 1500 H1. 2015

Hull

H1. 2016

Liabilities

*Figures shown are provided only as a guide. Not all losses include a reserve estimate and are reflected in the figures. Excludes Hull War hull reserves. Source: JLT.

0

Q2 2015

USDm

0

1000 Hull

0

Q2 2016

5 Year Average 2013

2014

2015

Liabilities

500

0 2012

2013

2014

2015

2016 YTD

*Figures shown are provided only as a guide. Hull and Liability reserves only including a pro-rata attritional estimate. Not all losses include a reserve estimate and are reflected in the figures. Excludes Hull War reserves. Source: JLT.

2016 YTD

WWW.JLT.COM | PLANE TALKING 7

Market & Industry News IATA: Airline Industry profit forecast

MS Amlin operating under one brand

The International Air Transport

MS Amlin has started operating as

Association (IATA) revised its 2016

one brand in the Lloyd’s market, as

financial outlook for global air transport

a single Managing Agency, MS Amlin

industry profits upwards to USD39.4

Underwriting Ltd.

AVIATION ARRIVALS & DEPARTURES •

Jason Klevens, formally of Willis Towers Watson, joins JLT’s US

billion from USD36.3 billion forecast in

Aerospace practice as Executive Vice

December 2015.

EU Air Safety list is updated

The forecast would represent a 12%

The European Commission has updated

rise in profits over last year’s figure of

the EU Air Safety List, the list of airlines

USD35.3 billion. IATA cited lower fuel

JLT’s US Aerospace practice as

that do not meet international safety

prices, robust passenger demand and

Senior Vice President, based in Dallas.

standards, and are therefore subject

improving airline efficiency as the primary

to an operating ban or operational

contributors to the increase.

restrictions within the European Union.

In its report IATA said, 2016 is expected

All airlines certified in Zambia are now

to be the fifth consecutive year of

cleared from the list, along with Air

improving industry profits, with the

Madagascar and Indonesian carriers

industry expected to generate revenues

Citilink, Lion Air and Batik Air. In addition

of USD709 billion in 2016.

most aircraft of Iran Air (excluding Fokker

However the fortunes of carriers vary dramatically by region. North American profits, more than half of the industry’s

remain banned from EU skies; 214 of

profits. Airlines in most other regions are

those owing to a lack of adequate safety

expected to record an increase in profits,

oversight on behalf of their respective

but IATA forecasts a loss of USD500m

national civil aviation authorities. Two

for African carriers, compared to a

individual airlines - Iraqi Airways and Blue

USD700m loss in 2015.

Wing Airlines have been banned due to safety concerns. An additional six airlines

first General Aviation (GA) consortium on

•

aircraft types.

Executive. Tom Fadden will now become regional Head of Aviation for AGCS London with immediate effect, alongside retaining his current role as Global Airline Product Leader. Mike Hansen has been named regional Head of Aviation for North America. •

with combined limits up to USD15m Hull

General Aviation. •

and USD200m Liability on any single risk. The consortium will write all turbineengine GA aircraft, both fixed wing and

•

•

rotor wing. Piston-engine GA aircraft are excluded. Capacity comes from “A+” rated Lloyd’s Syndicates Argo, Antares and Allied World.

Group Leader. •

USA, based in Washington DC. •

carriers, airports, traffic-control agency Nav Canada, along with other aviationindustry providers.

Chris Blanchard is retiring from his position at Aon.

•

Jared Seth has left Global to join Willis Towers Watson.

in the aftermath of the 9/11 attacks in the US, provided war-risk coverage to air

elseco has appointed Mr. Nishant Choksi as Managing Director of elseco

June 2016 expiry date. The programme, which was established

Malcolm Brett, formally of Chubb, has joined MS Amlin as Aviation Product

that it has decided not to extend the Liability insurance programme past its

Richard Bayman has left ArgoGlobal to join Chubb.

The Canadian government announced federally funded Aviation War Risk

Chubb has appointed Martin Stevens as Chairman of its Aviation division.

Canada cancels its Aviation War Risk Insurance programme

Nigel Griffiths has left his CV Starr to join Travelers Syndicate as Head of

the Lloyd’s Asia platform. The consortium will be able to write lines

Allianz Global Corporate & Specialty to the new role of Global Aviation

are subject to operational restrictions and can only fly to the EU with specific

Jason Hendrix, formally of Aon, joins

(AGCS) has promoted Matthew Farrell

to resume operations to the EU. With this revision, a total of 216 airlines

Tokio Marine Kiln (TMK) has launched its

•

F100 and Boeing 747 type) are allowed

airlines will generate USD22.9bn in

TMK launches GA Consortium

President, based in Atlanta.

•

Benjamin Davy is leaving Chaucer to join Antares.

PROFILE


Lead Lines - Preparing for the Catastrophic Aviation Event It is the call that keeps airline executives

foreign air carriers operating into the

awake at night: “One of our aircraft is

United States or its territories.

down.”

No US carrier, nor any foreign carrier

Joseph P. Taccetta, Esq.

That one sentence sets into motion plans

flying into the United States, is exempt

Executive Vice President,

and activities for which the airline has

from filing a Plan with the US Department

JLT Aerospace (North America), Inc.,

long-prepared but had hoped would

of Transportation (DOT) Office of Aviation

JLT Specialty USA

never actually have to implement. But

Enforcement and Proceedings that

accidents occur and when they do, they

delineates how families of victims are

also trigger responses by governments,

to be treated after a catastrophic loss

Biography

underwriters, lawyers and the entire

and, in fact, no foreign airline will receive

Joe joined JLT’s Aerospace Team in July

cottage industry that has evolved around

an economic certificate to operate

2015 having come from Global Aerospace,

the response to aviation catastrophes.

until it does so. The Plan is really an

where he was a Senior Vice President, Senior Claims Executive and Airline Claims Practice Leader. Prior to Global, Joe worked for a number of years at United States Aviation Underwriters. He began his career in aviation with Pan American World Airways. Joe’s major focus will be Catastrophic Claims Consulting for JLT’s growing number of airline clients. Over the years, Joe has had a major role in resolving a variety of significant airline litigation and claims while also responding on-scene to numerous

For domestic airlines in the United States, the event also obligates the carrier to follow the dictates of the Aviation Disaster Family Assistance Act that was passed by Congress and signed into law as part of the Federal Aviation Reauthorisation Act of 1996. It grew from perceived mishandling of victims’ families after the ValuJet accident of May 1996 and the Trans World Airlines tragedy involving Flight 800 that followed in July of that same year. Then-President Bill Clinton

affirmation by the carrier in the form of assurances that explain that what the carrier is undertaking is required by law. The original Act as well as the Foreign Act listed eighteen obligations tasked to the air carrier. That number has morphed into thirty-two victim support tasks (VSTs) as enumerated in the NTSB Federal Family Assistance Plan for Aviation Disasters, first published in 2008 and currently being reviewed, updated and amended so as to include tasks to be assigned to airports at which accidents occur or which are to receive

major accidents.

established a panel to investigate how

Joe graduated from The Catholic University

were treated and it was chaired by

of America, Washington, DC where he

Vice President Al Gore. The resulting

received his undergraduate degree. He

recommendations were codified with the

earned a Juris Doctor from The Seton Hall

passage of the Family Assistance Act.

The filing of the Plan itself is easily

University School of Law and is a member of

The Act delineates obligations that each

achieved. Where the airline may face

the New York, New Jersey and Federal Bars.

of three organisations is to statutorily

difficulty is enacting the very obligations

undertake following a major aviation

that it promises the DOT it will execute.

disaster: the National Transportation

“Acceptance” of the Plan by the DOT

Safety Board (NTSB), the American Red

does not constitute “Approval” of the

Cross (the current designated non-profit

Plan as neither the NTSB nor the DOT

organisation) and the airline involved

audit or approve the airline’s Plan. How

in the loss. Realising the limitations of

well the airline meets its obligations is

the Act, in the following year the US

determined by the NTSB which reports

Congress passed the Foreign Air Carrier

deficiencies in enacting the Plan to the

Family Support Act of 1997 that made

DOT which may levy a fine against the

compliance with the Act mandatory for

airline if the obligations are not well-met

Want further information on this topic and JLT’s capabilities in this area? If so then please contact your Account Executive or alternatively email us at: [email protected]

the families of victims of the accidents

families of the victims. Whereas the Acts themselves describe “what has to be done,” the VSTs are more in the nature of “how it gets done.”

Continued on page 9 

WWW.JLTGROUP.COM | PLANE TALKING 9

“JLT has developed a Catastrophic Claims Consulting programme designed to assist JLT airline clients in navigating both the pre- and post-accident processes required of airlines flying within and into the US.”

 Continued from page 8 as has happened to a number of airlines

leaders at many of the airlines, that at

since the carrier is responsible for any

previously.

least two persons be assigned to an

deficiencies on behalf of those entities.

individual victim’s family as round-the-

It is important for those carriers which

clock coverage is necessary. In addition,

choose to employ the services of their

the carrier must assign personnel to

partners and other outside sources

those family members who do not

to know just how extensive those

travel to the accident destination as

response services will be and must make

“Air carriers must now not know only

well as provide escorts at the origin and

assurances that all of the obligations

how to implement and effectively

destination airports (and connecting

of the Act are met. This requires

manage their family assistance plans,

cities) to ease the travel of those who

regular updating of the Plan, frequent

but also to know the corporate intent

do decide to journey to the accident

communication with the contracting

behind those plans, the spirit in which

scene. This, of course, poses problems

vendor and partner as well as tabletop

they are responding to those impacted

for smaller domestic carriers with limited

and real-time drills to guarantee that the

by an accident. Family assistance

workforces as well as non-US carriers

needs of the families will be met.

is an extension of customer service,

which may have few employees in the

albeit under very tragic circumstances.

US, particularly if a wide-body, fully

Because it involves the emotions and

loaded aircraft is involved. Many of those

expectations of those affected, family

carriers have contracted with outside

assistance is more than a checklist

vendors which supply the necessary

exercise.”

personnel to respond to the accident and

All carriers that fall under the law,

comply with the Act, a costly undertaking

Paul Sledzik, Director of the Office of Transportation Disaster Assistance for the NTSB cogently states the philosophy behind the Plan as follows:

regardless of size or staffing abilities, must guarantee that each victim of the accident will be treated equally. Originally applicable only to passengers on the affected aircraft, the Act was amended in 2005 and was extended to include “any victim” of the accident and mandates that the families of the aircraft crew as well as ground fatalities be included within the definition of “victim”. It is the recommendation of the NTSB, as well as Emergency Response

to which underwriters usually respond based of course on policy language. Additionally, with the advent of code share and airline alliance agreements (e.g., Sky Team, One World, Star Alliance), some carriers have contracted with their domestic US partner(s) to provide some or all of the services required by the Act and that also comes at a significant price. Carriers should fully understand the response capabilities of their chosen vendors and partners

JLT has developed a Catastrophic Claims Consulting programme designed to assist JLT’s airline clients in navigating both the pre- and post-accident processes required of airlines flying within and into the US. Through this our highly experienced aviation insurance industry experts will provide the highest levels of professionalism and expertise to assist in the accident environment, whilst working to preserve and protect the brand and reputation of the carrier involved. Our services include major accident preparation and planning as well as the provision of on-scene guidance to the airline and its insurers. Other non-accident services are also offered to JLT’s airline clients that choose to participate in the programme. 


JLT Specialty Limited provides insurance broking, risk management and claims consulting services to large and international companies. Our success comes from focusing on sectors where we know we can make the greatest difference – using insight, intelligence and imagination to provide expert advice and robust - often unique - solutions. We build partner teams to work side-by-side with you, our network and the market to deliver responses which are carefully considered from all angles.

CONTACTS SUBSCRIPTIONS & GENERAL QUERIES [email protected] EDITORIAL TEAM Richard Adams Aerospace, JLT Specialty Limited +44 (0) 207 466 5220 [email protected] Brad Hills Aerospace, JLT Specialty Limited +44 (0) 207 466 1434 [email protected] BUSINESS CONTACTS Nigel Weyman Aerospace, JLT Specialty Limited +44 (0) 207 466 1448 [email protected] William Smith Aerospace, JLT Specialty Limited +44 (0) 207 466 6654 [email protected]

JLT Specialty Limited The St Botolph Building 138 Houndsditch London EC3A 7AW www.jltspecialty.com Lloyd’s Broker. Authorised and regulated by the Financial Conduct Authority. A member of the Jardine Lloyd Thompson Group. Registered Office: The St Botolph Building, 138 Houndsditch, London EC3A 7AW. Registered in England No. 01536540. VAT No. 244 2321 96. © JUNE 2016

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