Responsible Insurer

Aircraft: the virtuous combination

Air traffic increases and accidents decrease

Over 4 billion 100 million passengers transported in 2017, and the figure rose further in 2018.

This confirms an average growth trend over the past ten years of around 6.7%, also considering the rest that occurred right after the 2008 economic crisis. These are the data taken from the official statistics published by the specialised United Nations agency ICAO (International Civil Aviation Organization), data that are compared with figures not as important in cargo traffic subject to the heavy sea freight competition for decades.


And so it is legitimate to ask oneself whether a parallel increase in accidents matches the constant growth in number of aircraft streaking across our skies and the multiplication of miles flown.

This question is justified by the fear always associated with the psychological perception of greater peril connected with being suspended in the void inside a vehicle inevitably subject to the force of gravity. In reading the statistics, both the extremely low absolute number of accidents that led to losses of human lives (ten in 2017) and the ratio to the number of flights made (around 0.3 per million flights) are therefore amazing.

These figures are measured on civil aircraft for commercial use with transportation capacity of at least 14 people, so naturally all smaller private aircraft are left out of the calculation.


It is therefore intuitive to conclude that the progress made in the flight safety area has been incredibly extensive and that, as we often hear repeated time and again, today the plane is the safest transportation vehicle par excellence.

But how did the air transport insurance market react to this evolution?

First of all, the reduction of risk associated with mechanical breakdowns is obvious. Technological evolution, improved maintenance and renewal of fleets – whose value has considerably gone up in recent years – have extremely reduced losses caused by this type of risk. On the other hand, human risk remains unaltered, which however is to be split between pilot error and the human factor, but regard to which losses have literally been halved starting from the 2000s. This arises from the fact that the auxiliary flight support systems have enormously decreased piloting risk which, however, corresponds to an increase in human factor risk, meaning those voluntary and mostly malicious behaviours of crew members.

The risk of terrorism is instead very much on the rise, and air transport has always been a priority objective in consideration of the potential of loss of human lives, the psychological impact and the heavy media coverage dedicated to these extremely painful events.

What only remains more moderate is cyber risk, which mainly aims at the booking or logistic support systems, and that therefore sets out to cause substantial economic damage due to the grounding of the aircraft even for just a few hours or through the temporary paralysis of air traffic.

Lastly, the drone risk emerges. In a certain sense, it is comparable to that of birds in flight owing to possible collisions with the aircraft and in particular damage to and the shutting down of the engines. Faced with this somewhat balanced mixture, the most recent research studies have pointed out that the value of the premiums, even if in a growing market, has constantly dropped since the beginning of the millennium, also as a result of an increased insurance capacity that in any case continues to show strong interest in this sector, however reinforced by the heavy fall of yields following the monetary slowdown and the growing search for alternative investments decorrelated by the trend of the financial markets.