Aircraft Insurance Market Report 2025 (Global Edition)

Aircraft Insurance Market Size, Share & Trends Analysis Report By Type (Public Liability Insurance, Passenger Liability Insurance, Combined Single Limit (CSL), Ground Risk Hull (Motion) Insurance, Ground Risk Hull (Non-Motion) Insurance, Hanger and Ground Support Equipment Insurance, In-Flight Insurance and Umbrella Insurance), By Application (Commercial Aviation and Business and General Aviation), By End User (Airlines, Airports, Aircraft Product Manufacturers, Leasing Companies, Ground Operators, Individual General Aviation Aircraft Operators, Air Taxi Operators, Corporate Aircraft Operators & Owners and Maintenance, Repair & Overhaul (MRO) Companies), By Region, And Segment Forecasts, 2023 - 2030

Market Overview

According to Cognitive Market Research, the global aircraft insurance market size is USD 3.6 billion in 2023 and will expand at a compound annual growth rate (CAGR) of 6.00% from 2023 to 2030. Aircraft insurance is a financial protection strategy that covers damages or losses to aircraft, providing coverage for physical damage, liability, and associated risks, ensuring financial security for aircraft vendors and operators. The market for airplane insurance is driven by the growing need for protection against risks associated with flying. Market expansion is facilitated by factors like the expansion of the aviation industry, expanding fleets, and regulatory requirements. The growing global need for comprehensive airplane insurance solutions is driven by growing awareness of potential liabilities, which promotes market expansion. Additionally, the market is driven by an increase in freight and air travel, which pushes insurers to revise and amend policies to handle rising risks in the ever-changing aviation industry.

• For instance, in December 2022, New India Assurance launched a “New India Unmanned Aircraft System (UAS/UAV/RPAS/Drone) Insurance” Larger aircraft to individual glider pilots will be covered by the New India Unmanned Aircraft System Insurance.  

How did COVID–19 Impact the Aircraft Insurance Market?

The COVID-19 had a significant impact on the aircraft insurance market. With fewer people traveling and disturbances in operations, there was less demand for insurance. Insurers faced difficulties in evaluating risks due to increased uncertainty. Airlines, dealing with financial challenges, reconsidered their insurance coverage, leading to a drop in premium revenues. As the aeronautics industry slowly recovers, insurers must adjust their strategies to adapt to changing regulations and unpredictable conditions. Despite these challenges, the aircraft insurance market is expected to bounce back as the aviation sector improves, emphasizing the importance for insurers to be flexible in addressing ongoing uncertainties caused by the global health crisis.

MARKET DYNAMICS: KEY DRIVERS

Surge in Airline Travel Propels Growth of Aircraft Insurance

The substantial increase in airline travel has encouraged a corresponding expansion in the aircraft insurance sector. As more people take to the skies, there is a heightened need for comprehensive insurance coverage to diminish risks associated with aviation. The growing frequency of flights and expanding fleets contribute to the rising demand for policies that cover physical damage, liability, and other related risks. Insurers are adapting and innovating to meet the growing needs of the aviation industry, ensuring that aircraft owners and operators have strong coverage to navigate the complications of the dynamic and expanding air travel landscape.

• For instance, according to the Bureau of Transportation Statistics 2022, U.S. airlines carried 194 million more travellers in 2022 than in 2021, up 30% year-to-year. For the full year 2022, January through December, U.S. airlines carried 853 million passengers up from 658 million in 2021 and 388 million in 2020.

Growth of the Aircraft Insurance Landscape Driven by Government Regulations

The growing government regulations governing the aviation industry have become a pivotal force shaping the landscape of aircraft insurance. With increased emphasis on safety standards and risk management, regulatory bodies are imposing stringent requirements on insurance coverage for aircraft. This surge in oversight has prompted insurers to refine their offerings, ensuring compliance with evolving mandates. Aircraft insurance policies now need to align with specific regulatory benchmarks, addressing concerns related to liability, passenger safety, and environmental impact. As government scrutiny increases, the aircraft insurance sector experiences a transformative phase, adapting to the regulatory framework while providing comprehensive coverage for the aviation community.

• In October 2023, Aviation war insurers gave notice to abandon cover for some airlines domiciled in Israel and Lebanon because of the clash in the region, with some dissolution already taking effect, three industry sources with direct knowledge of the matter said.

MARKET DYNAMICS: KEY RESTRAINTS

Natural Disasters Restrict the Growth of the Aircraft Insurance Market

Natural disasters pose a significant hurdle for aircraft insurance, impacting coverage for aircraft and hindering market growth. Insurers must carefully navigate the delicate balance between providing comprehensive protection and addressing the heightened risk exposure associated with these disasters. Adapting strategies is essential to address these challenges and foster the growth of the aircraft insurance market during environmental uncertainties.

How are Segments Performing in the Global Aircraft Insurance Market?

Type Segment Analysis

According to Cognitive Market Research public liability insurance holds the major share in the aircraft insurance market, driven by its essential role in covering injuries and damages related to plane operations. The emphasis on third-party liabilities positions it as a critical driver of the market. As aviation activities grow, the demand for comprehensive coverage against potential public and property risks increases, making public liability insurance the leading force in shaping and propelling the growth of the aircraft insurance sector

Passenger liability insurance is experiencing rapid growth, driven by its crucial role in covering injuries and damages to passengers. As a driving factor in the insurance industry, the increasing emphasis on passenger safety and regulatory compliance fuels the remarkable expansion of this coverage, making it one of the fastest-growing segments in the market.

Application Segment Analysis

According to Cognitive Market Research, commercial aviation dominates the aircraft insurance sector, primarily driven by substantial investments required for insuring several jets and valuable commercial aircraft. The continuous global growth of the aviation industry increases the demand for insurance, placing commercial aviation as a leading force. Insurers must adapt to address the distinctive risks inherent in large-scale commercial operations, strengthening their critical role in shaping the dynamics of the aircraft insurance market.

The fastest-growing segment in aircraft insurance is business and general aviation, fueled by the surge in small and private aircraft operations. The increasing accessibility of private flying encourages a higher demand for insurance coverage. As the sector expands, insurers are improving to provide for the exclusive risks associated with business and general aviation, contributing to its prompt growth in the aircraft insurance market.

End User Segment Analysis

According to Cognitive Market Research, the airline segment dominates the aircraft insurance market, driven by the fundamental factor of rising demand for air travel coverage. The extensive market share reflects the industry's reliance on airlines as key players. As global air transportation needs increase, insurers recognize the essential role of covering these fleets. Airlines, with their wide networks and adaptability, become essential in shaping the aircraft insurance landscape, sustaining their dominance in the market due to their critical role in meeting the evolving coverage demands of the aviation industry.

Airports emerged as the fastest-growing segment in aircraft insurance, propelled by the rising need to cover infrastructure and liability risks. The driving force behind this growth is the expansion of global air travel and the increasing complication of airport operations. Insurers respond by modernizing insurance policies to address the distinctive challenges and risks associated with airport facilities and services.

Which Region Dominates the Market in 2023, and Which Region is Expanding at the Fastest CAGR?

According to Cognitive Market Research, North America dominated the market in 2023 and accounted for around 40% of the global revenue, primarily attributed to the rise in airport operations in the region. The region's dominance stems from increased air traffic, requiring comprehensive insurance coverage. As airport activities expand, insurers respond by tailoring policies to address the specific risks associated with the dynamic aviation landscape in North America.

Europe is the fastest-growing category driven by stringent government regulations ensuring aircraft and passenger safety. The continent's rapid growth in air travel requires comprehensive insurance coverage. Insurers adapt policies to comply with evolving European regulations, emphasizing safety standards. As the aircraft industry expands, the demand for insurance designed according to European standards accelerates, positioning the region as a key player in shaping the growth route of the aircraft insurance market.

COMPETITIVE LANDSCAPE: AIRCRAFT INSURANCE MARKET

The major players rapidly evolve with new strategies to attain a competitive edge and capture significant market share. The major aircraft insurance market participants emphasize expanding creative offerings to serve a large consumer base and gain a competitive benefit.

• In February 2020, Skywatch AI, A US-based on-demand telematics-based insurance platform introduced its drone insurance product. The Insurance was underwritten by a member of Starr Insurance Company for professional drone pilots to manage their coverage through mobile and desktop devices.

Some Prominent Players in the Global Aircraft Insurance market include:

• Arthur J. Gallagher & Co.
• Marsh LLC.
• Allianz
• American International Group, Inc.
• AXA XL
• Munich Re
• STARR INTERNATIONAL COMPANY, INC
• Chubb
• Willis Towers Watson WTW
• ACE Gallagher Holding W.L.L.

Market Summary:

• The global Aircraft Insurance market will expand significantly by 6.00% CAGR between 2023 and 2030.
• The demand for Aircraft Insurance is rising due to the numerous strategies adopted by key participants.
• The aircraft insurance market is driven by the increasing demand for coverage against aviation-related risks
• Airlines command the major market share in the aircraft industry, propelled by the fundamental driving factor of global air travel demand.
• North American Aircraft Insurance will continue to lead, whereas the European Aircraft Insurance market will experience the most substantial growth until 2030.

SEGMENTATION: Aircraft Insurance Market

Type Outlook:

• Public Liability Insurance
• Passenger Liability Insurance
• Combined Single Limit (CSL)
• Ground Risk Hull (Motion) Insurance
• Ground Risk Hull (Non-Motion) Insurance
• Hanger and Ground Support Equipment Insurance
• In-Flight Insurance
• Umbrella Insurance

Application Outlook:

• Commercial Aviation
• Business and General Aviation

End User Outlook:

• Airlines
• Airports
• Aircraft Product Manufacturers
• Leasing Companies
• Ground Operators
• Individual General Aviation Aircraft Operators
• Air Taxi Operators
• Corporate Aircraft Operators
• Corporate Aircraft Operators & Owners
• Maintenance, Repair & Overhaul (MRO) Companies

Regional Outlook:

• North America
  • The US.
  • Canada
  • Mexico
• Europe
  • Germany
  • France
  • UK
  • Italy
  • Spain
  • Rest of Europe
• Asia Pacific
  • China
  • Japan
  • India
  • South Korea
  • South East Asia
  • Rest of Asia Pacific
• Latin America
  • Brazil
  • Argentina
  • Rest of Latin America
• Middle East and Africa
  • GCC Countries
  • South Africa
  • Rest of MEA

Frequently asked questions regarding the global Aircraft Insurance market

1. What is the market size for the aircraft insurance market in 2023?

Answer- The global market size for aircraft insurance in 2023 was 3.6 USD billion.

2. What is the growth rate for the aircraft insurance market over the forecast period?

Answer- The global aircraft insurance market is expected to grow with a CAGR of 6.00% over the projected period.

3. Which is the leading region of the market for Aircraft Insurance?

Answer- North America held a significant global aircraft insurance market revenue share in 2023.

4. Which region is projected to detect the fastest growth in the aircraft insurance market over the forecast period?

Answer- Europe will witness the fastest growth of the global aircraft insurance market over the coming years.

5. Which country is leading in the aircraft insurance market in 2023?

Answer- The US had the most significant global aircraft insurance market revenue share in 2023.

6. What are the key drivers for the growth of the Aircraft Insurance market?

Answer- The main drivers of the growth of the aircraft insurance market are increased air traffic and increased government regulations to promote the market.

7. Which is the significant aircraft insurance market segment by application?

Answer- The commercial aviation segment had the largest share in the global aircraft insurance market by distribution channel.

8. Which is the significant segment in the aircraft insurance market by type?

Answer- The public liability insurance segment commands the largest share in the aircraft insurance market.

Regional Insights

• North America

According to Cognitive Market Research, the global aircraft insurance market size was estimated at USD 3.6 Billion out of which North America held the major market of more than 40% of the global revenue with a market size of USD 1.44 billion in 2023 and will grow at a compound annual growth rate (CAGR) of 4.8% from 2023 to 2030 due to increase in air traffic in North America. This increase in air travel has led to a growth in demand for aircraft insurance resulting in rising premiums. According to Cognitive Market Research, the number of aircraft in the sky increases the likelihood of accidents, collapses, and other insured incidences. The higher risk promotes the market for coverage products. In conclusion, the North American aircraft insurance market, airlines, leasing companies, and other stakeholders need support, leading them to buy more comprehensive and exclusive insurance policies. Airlines acquire larger, upgraded aircraft at significantly higher prices as passenger and passenger traffic increases.

• Europe

According to Cognitive Market Research, with a market value of USD 3.6 billion in 2023 and projected to expand at a compound annual growth rate (CAGR) of 5.0% from 2023 to 2030, Europe accounted for a share of over 30% of the global market size of USD 1.08 billion due to strict safety regulations led by government in Europe resulted in rising aircraft insurance in the region. Additionally, increased crashes must be followed by rigorous inspections and certifications, which boosts operating costs and insurance liability periods. According to Cognitive Market Research, Strict guidelines for regulation discourage new insurers from accessing the market, which limits competition and hikes prices. Further, the increasing prevalence of drones and the potential of cyber-attacks drive insurers to account for new risks, which forces up the cost of coverage. In conclusion, the European aircraft insurance market is thriving due to complex regulations and additional price levels which results in increased insurance costs for passengers and airlines as well as a rise in insurance premiums in Europe.

• Asia Pacific

According to Cognitive Market Research, the global aircraft insurance market size was estimated at USD 3.6 Billion out of which Asia Pacific held the market of more than 22% of the global revenue with a market size of USD 0.76 billion in 2023 and will grow at a compound annual growth rate (CAGR) of 7.8% from 2023 to 2030 due to the region's demand for coverage by regional airlines, growing fleets of aircraft, which are being fueled by government infrastructure investments, an increasing middle class, and fast urbanization. According to Cognitive Market Research, the region's leading insurance companies anticipate significant expansion as a result of the region's growing flight traffic, rising aircraft values, and strict safety standards. In conclusion, a growing number of air travel, increasing aircraft values, and stringent security measures are the main drivers boosting the airline insurance industry in Asia Pacific. These components assure constant development and prepare the industry for a prosperous future.

• Latin America

According to Cognitive Market Research, the global aircraft insurance market size was estimated at USD 3.6 Billion out of which the Latin America market of more than 5% of the global revenue with a market size of USD 0.18 billion in 2023 and will grow at a compound annual growth rate (CAGR) of 5.8% from 2023 to 2030 due to the rising middle class and booming economies and rising insurance demand. The booming private aircraft and merchandise markets compete with commercial aviation, each with a distinct set of insurance considerations. According to Cognitive Market Research, New air corridors and airport enhancements offer accessibility to new markets and travel routes, driving up demand for insurance coverage. Furthermore, drone advancements in security and logistics improve the insurance market and bring up growth opportunities. In conclusion, the growing airspace of Latin America represents an encouraging prospect for aviation insurance, which is ready to execute a seamless transition within the insurance portfolios of regional and global companies, irrespective of the obstacles presented by changing laws and economic fluctuations.

• Middle East and Africa

According to Cognitive Market Research, the global aircraft insurance market size was estimated at USD 3.6 Billion out of which Middle East and Africa held the major market of more than 3% of the global revenue with a market size of USD 0.11 billion in 2023 and will grow at a compound annual growth rate (CAGR) of 5.9% from 2023 to 2030 due to growing aircraft dimensions, the stronger regulatory focus on safety, and growing aviation requirements in the Middle East and Africa. The region has been designated as the center for continuous growth and enhancement in the aviation insurance market owing to this dynamic environment. According to Cognitive Market Research, the aircraft insurance market in the Middle East and Africa is driven by rising regional economic development, aerospace technology developments, and increasing risk management expertise. In conclusion, the Middle East and Africa's aviation insurance industry is expected to grow at an exponential pace as long as suppliers modify their offerings to satisfy the particular demands of the region.