American International Group Inc. (AIG) has been reported to be the lead insurer for the recent Asiana Flight 214 tragedy in San Francisco. AIG’s role is not surprising, given its presence in Asia and focus on the aviation market, according to an analysis of aircraft insurers by SNL Financial.
In addition to its foreign writings, AIG is a top writer of aircraft insurance in the U.S., according to SNL The insurer wrote about $372.6 million in aircraft premiums on a direct basis in 2012, giving it about a 20 percent share of the U.S. market, SNL data shows. While it ceded a fair portion of its business, AIG was still the leader in 2012 when measured by net premiums written.
Other major U.S. aircraft insurers are Allianz, Starr International, ACE and Berkshire Hathaway, SNL said in its report.
The aircraft line comprises coverage for the aircraft and its contents, as well as the liability of the aircraft owner and manufacturer to passengers, airports and other third parties.
Incurred loss ratios on aircraft insurance have been relatively low for the U.S. property/casualty industry within the past few years. From 2007 to 2012, the highest annual loss ratio was 54.1 on a direct basis and 60.1 on a net basis, the report said.
Regarding the Asiana wreck, South Korea’s Financial Supervisory Service said insurers provided $130 million in insurance coverage for the aircraft and $2.25 billion worth of liability coverage, according to a July 7 report translated by SNL. The report also named the Korean insurers, a group that included LIG Insurance Co. Ltd., Samsung Fire & Marine Insurance Co. Ltd. and Hyundai Marine & Fire Insurance Co.
Some of the other top U.S. insurers assuming premiums from South Korean insurers in 2012 were W. R. Berkley Corp. and Berkshire Hathaway Inc., according to SNL data.