To read this content please select one of the options below:

Pricing issues in aviation insurance and reinsurance

Morton N. Lane (Lane Financial LLC, Kenilworth, Illinois, USA)

Journal of Risk Finance

ISSN: 1526-5943

Article publication date: 1 July 2005

3863

Abstract

Purpose

This article aims to examine the risk inherent in the insurance of the aviation industry, to take an outsider's look at those risks and to develop certain “capital market” pricing rules.

Design/methodology/approach

The aviation industry presents a classic low‐frequency/high‐limit insurance problem. Pricing such exposures is difficult because of the high degree of uncertainty involved. After a review of the considerations that an insurance underwriter traditionally brings to the problem, the author applies a simple pricing rule incorporating current thinking on risk evaluation.

Findings

The results of the author's approach are compared with the results of traditional pricing rules, generating interesting insights. The application of the new methodology to the analysis of current pricing and of alternative proposals is suggested.

Originality/value

The article will be of value to those interested in the aviation industry and in the pricing of insurance and reinsurance.

Keywords

Citation

Lane, M.N. (2005), "Pricing issues in aviation insurance and reinsurance", Journal of Risk Finance, Vol. 6 No. 3, pp. 192-207. https://doi.org/10.1108/15265940510599810

Publisher

:

Emerald Group Publishing Limited

Copyright © 2005, Emerald Group Publishing Limited

Related articles