50 Years of Aviation at TMHCC

50 Years of Aviation at TMHCC

Smoking, fine dining and folks dressed in their finest. Not what we usually associate with travelling by plane today, but these were the hallmarks of airplane journeys in the 1970s. A lot has changed since then, and while some of the luxuries may be lost to the past, Tokio Marine HCC's commitment to providing best-in-class aviation insurance remains the same.

Aviation was the first line of insurance we offered when HCC was founded back in 1974. Over the last 50 years, we have been a guiding hand in transforming the industry, assisting the exponential growth of air travel from an experimental mode of transport through to its present-day mass-market availability. The industry provides a strong platform for creativity and innovation, and our consistent presence in the market is down to our commitment to clients operating in this sector.

This has not always been a straightforward endeavour. By its very nature, air travel is a cyclical industry, and a core part of Tokio Marine HCC's model has been our ability to operate as a trusted and stable partner, whilst remaining agile in the face of setbacks. Aviation has undergone some of the most intense spurs of innovation, ingenuity and advancement, but also endured some of the most serious tragedies and setbacks.

Building our expertise

While we have a long history of underwriting aviation risk, it was in 1997 when this line of business cemented itself as a key pillar of our growth.

This was the year we moved ahead with the acquisitions of four individual specialty aviation insurers, which immediately doubled our existing premium. Three of these four businesses were consolidated to become our USSIC Aviation business unit, which now covers a deep and diverse portfolio across airports, general aviation and specialty aviation risk.

The fourth business acquired was Avemco, which proudly stands as the only direct-to-consumer aviation insurer in the US. One of the few acquisitions we have made of a publicly traded company, this has become an incredibly successful part of our organisation, and is the leading private business and pleasure insurer in the US, consistently delivering excellent results.

Our final branch of business that works in this sector is HC aviation, which focuses on international business specialising in speciality risks across military operations, cargo, second and third tier airlines, firefighting among others.

Today, TMHCC's aviation business is a team of 115 experts, writing $160 million in gross written premium across 55,000 policies globally.

Creating tailwinds with innovation

Technological innovation has changed insurance across the spectrum, while we once communicated via telex and fax and drew up spreadsheets on a piece of paper, technology has completely modernised and accelerated the way we operate.

We now move at a pace once thought impossible. When HCC first started insuring aviation, it would take months to quote, bind, issue a policy, prepare invoices and countersign contracts.

A turbulent world

From the devastation that can be caused through the weaponisation of commercial aeroplanes seen during 9/11, to the halting of international travel caused by the response to the Covid pandemic, to the unlawful invasion of Ukraine which resulted in the loss of over 600 aircraft, these cataclysmic events have wreaked havoc on the lives and businesses involved. They highlight the ongoing insecurity that aviation firms face and the need for insurers to attempt to predict the unpredictable.

These black swan events have made the world a very different place from what it was 50 years ago. A tangled web of economic sanctions, legal issues and financial arrangements has heightened the need for strong due diligence when taking on new clients and projects.

Having a trusted insurance partner has proven critical in surviving the numerous economic cycles of the aviation industry. TMHCC's employees, some of which have been with our organisation for over 40 years, have worked alongside clients through thick and thin, working conscientiously to improve understanding when disaster strikes. Critical to this has been consistency. Consistency of our team, consistency of our approach and, as a result, consistency of our clients, many of whom we have worked with for decades.

Looking to the future

The last few decades of development have got us to an incredible stage. Airliners are more aerodynamic, much lighter in weight and far more fuel efficient than ever, resulting in much more profitable journeys. The industry is also facing some of the harshest scrutiny it has ever seen, with constant threats of litigation and major immediate risks posed by geopolitical instability.

The aviation industry is showing little sign of slowing its rate of technological innovation. Drones are on the rise, and present a wide range of consumer and commercial applications such as transport, powerline inspections, mapping, crop spraying, search and rescue, law enforcement and cargo delivery to name a few, this is a subsector we are tackling head-on.

Even commercial space travel is now within the grasp of those who can afford a six-figure ticket. As more challenger brands continue to stretch the limits of what is possible for the everyday consumer, insurers will be faced with new challenges. Wherever the industry flies to in the decades to come, we will be here to support progress.

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