CONCLUSION

I started this Project by asking the question Why Aviation Insurance is

Required?In the course of the analysis various trends and developments in the
aviation industry were discussed that provide partial answers to this question.
Airlines employ a wide variety of business Models while taking an aviation
insurance contract. For example, some companies like Kingfisher Airlines take
policy with high premium while others like Air India take an aviation insurance
contract with low premium. The aviation insurance market is highly volatile due to
the inherent nature of the risk and the underwriting cycle of insurance. Historically,
the market wide premium appears to be almost as volatile as the claims, suggesting
a lack of consistency in underwriting this business. The aviation insurance market,
by its own nature, is highly volatile. There are many causes including the overall
insurance underwriting cycle, the major accident risk, the short-term memory of
the insurance market, and the long tailed nature of determining responsible parties.
However, the increasing involvement of analytical professionals such as actuaries
should introduce more effective methods for pricing airline insurance and this
should help stabilize the premium component of the loss ratio equation.