Gallagher says aerospace manufacturer market dynamics defy logic

By Michael Jones Oct 13 (The Insurer) — Conditions in the aerospace manufacturing and infrastructure (AM&I) segment have remained stable despite growing exposures and worsening loss trends, raising questions about the market's long-term sustainability, Gallagher's Claire Vincent said. In the latest edition of Gallagher's Plane Talking newsletter, the broker's aerospace senior partner said there had been a disconnect between industry growth and insurance pricing in the AM&I market in recent years. Much of the aerospace infrastructure sector has reported annual growth rates of between 5% and 10%, with some companies growing considerably more, but insurance costs have remained stable or increased only marginally, Vincent said. Despite profitability concerns, Vincent said excess capacity remained the dominant market characteristic, adding that available insurer participation exceeded 100% of program requirements for many placements. Buyers continue to hold significant leverage for well-performing accounts, she said, although risks with adverse loss records face more challenging renewal negotiations. "There is currently little evidence of meaningful capacity withdrawal, and as long as c