LSA Insurance: Planes Yes, Pilots Maybe
For aviation insurers, its the best of times and the worst of times. In many traditional parts of the aircraft insurance market, an overabundance of capital and new insurers is forcing premiums-especially those for corporate airplanes-down to new lows. At the same time, buyers are snapping up new airplanes of all sizes faster than manufacturers can build them. And the two new market areas of the decade, Very Light Jets and Light Sport Aircraft, are beginning to take off.In some ways, Light Sport Airplanes are an insurers dream. If the glass-half-full guys are even remotely right, there will be shoals of them. And from an underwriters viewpoint, theyre attractive because they have what insurers call “low severity.” Severity is essentially the average cost of an accident.