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Allianz marks a century in the air

Allianz is celebrating the 100th anniversary of its aviation underwriting business, which started out insuring airships.

The insurer soon expanded into fixed-wing aviation and airlines but continued with the airship business, covering the loss of the Hindenburg in New York in 1937.

“Allianz has been a partner to the aviation industry for much of its history,” Global Head of Aviation Henning Haagen said.

“Since insuring some of the very first aviation risks in 1915, we have evolved into a global aviation insurer with clients ranging from small gliders and balloons to the world’s largest airlines, airports and manufacturers.”

Today, the aviation insurance business operates in a much safer environment, but it faces the challenge of premiums also being at their lowest levels when compared with risks.

Allianz says there has been a 50% increase in exposure since the turn of the century, driven by rising fleet values and passenger numbers.

Exposures have risen from $US576 billion ($736 billion) in 2000 to $US896 billion ($1.1 trillion) in 2013.

If growth continues at the same rate, the figure will top $US1 trillion ($1.28 trillion) by 2020.

“New materials can lead to new losses, but it is the speed of innovation and the need to keep pace with understanding the risks that is the major challenge today compared with the past,” Mr Haagen said. “Claims costs are also affected by values, which have been steadily increasing across the board, from the largest airliner to corporate jets.

“An Airbus A380 was the first aircraft to require an insured limit in excess of $US2 billion ($2.56 billion), while the hull of a Dassault Falcon 7X business jet is now typically insured for about $US60-$US70 million ($76-$89 million).”

Mr Haagen says the aviation business will continue to be an integral part of Allianz’s group offering.

“Many insurers see aviation as a diversification play, but for us it is a core part of our business. In the current market there is opportunistic market capacity being offered, but we have been writing aviation insurance for 100 years and are here for the long term.”