In a recent article published in the Middle East Insurance Review, Andrew Metcalfe, Sompo International SVP Aerospace, London Market & Europe, shares his perspective on changing airline risk profiles and why the Middle East aviation market may take even longer to recover from the effects of the COVID-19 pandemic than those elsewhere in the world.
“It’s important to remember that although the aviation market in the Middle East is subject to the same forces as those in the rest of the world, it is also characterised by its own unique dynamics,” said Mr. Metcalfe. “The major Middle Eastern airlines typically operate modern fleets with very large and expensive aircraft that require a high level of insurance capacity. In addition, this is a market that even pre-COVID-19 was having to deal with operational challenges around safety and security with regional disputes – most recently in Syria – forcing aircraft to reroute.”
He added that, “Airlines’ risk profiles changed from dynamic to static risk at the height of the lockdown, while infrastructure risk for airports and air traffic control
has obviously reduced during this period. This situation creates unique risks such as mental health, skill fade and potential mechanical issues for machines created to fly, not sit on the ground for extended periods. These are just some of the additional risks for insurers to consider.”