AAIRRG | Aviation Alliance Insurance Risk Retention Group, Inc. Polaris Enterprises | Providing 
	administrative services to AAIRRG since 2009
Photo courtesy of Med-Air, Inc.


To learn about AAIRRG's history, please refer to our Home page

The first aviation insurance policy was written by Lloyd's of London in 1911. The company stopped writing aviation policies in 1912 after bad weather and the resulting crashes at an air meet caused losses on many of those first policies. Since then the majority of aviation's insurance has been concentrated within just two insurance pools.  Think of it, over 50% of all U.S. aviation was and is still written by either USAIG or AAU. In 1932, the New York Department of Insurance commenced an investigation regarding this concentration and, again in 1958, Congress also commenced an investigation into the aviation marketplace. The intent was to break up the cartel, much like Standard Oil a decade or so before.

The industry dodged the bullet by appointing a "committee" to work with first with New York Department of Insurance and then later with Congress, but that went away when Congress passed The McCarran-Ferguson Act which turned regulatory control of the insurance industry over to each individual state and exempted insurance from anti-trust laws to boot. (This exemption is enjoyed by only a few other "activities" such as unions, baseball and newspapers.)

Of course, the states resolved the issue by decreeing that aviation was an unregulated line of insurance, which means there is minimal oversight. To give you an example of just how incestuous the aviation industry is, more than half of all insurance regulators come from the industry and, after serving a period of time as a regulator, return to the insurance industry — typically in a more exulted position than when they left. Talk about the "fox guarding the hen house."

If this was any industry other than insurance, the Justice Department would be having a field day in court with these scoundrels facing more prison time than Bernie Madoff!

The result of all this is that aviation in the United States is the first or second most profitable line of liability insurance just before or after surety (principally, performance and completing bonds). All other liability lines would be delighted with an 80% loss ratio (percentage of dollars paid out in claims from premiums paid) whereas aviation has averaged in the mid 50% range for the past twenty plus years. That's thirty points more profit than the average!

Of course, over the years, other insurance providers have tried to break the cartel, but each time, the cartel has driven them out of business by savagely cutting prices until the new competitor fails and then they predictably revert back to their old ways.

The reason that AAIRRG is thriving is that, with few exceptions, each new aviation marketing effort in the past have been 'generalized' whereas AAIRRG is exclusively focused on certified Part 145 repair stations. Please read on to learn why repair stations are a much safer risk than FBO's, charters, flight schools, firefighting, etc. This is the "miscellaneous" aviation class of business that repair stations have been lumped in with. So in effect, all these years, you have been subsidizing "others" with your enviable low rate of claims.


Resource: Introduction to Aviation Insurance & Risk Management, second edition, Alexander T. Wells and Bruce D. Chadbourne, authors



Employers Have Six Months to Prepare for New Overtime Requirements
05-23-2016: On May 18, the Department of Labor (DOL) announced its highly-anticipated revisions to the Fair Labor Standards Act's (FLSA) overtime provisions, which will go into effect Dec. 1, 2016.
Should airlines pay to get FAA tech past the 1990s?
05-13-2016: Without stable funding, the Federal Aviation Administration might never successfully modernize the nation's air traffic control system. That's why many are calling for the government to take a big step back from air traffic control and let a not-for-profit corporation run the show.
Bald Eagle Blamed For Deadly Plane Crash
05-04-2016: The Alaska fireball was the first US civilian plane crash to result in deaths after an impact with a bald eagle, say authorities.
FAA Warns of Fatigued Latch Springs on Pilot Seats
05-03-2016: Worn-out latch springs could cause the pilot seats on some Dassault Falcons to slide aft and the pilot or copilot to lose contact with the flight controls, according to an FAA Airworthiness Directive issued yesterday.
ARSA Works: FAA Policy Jeopardizes AD Compliance
04-29-2016: On April 29, ARSA requested the FAA revise a legal interpretation regarding second and third-tier documents that are purportedly incorporated by reference (IBR'd) in an airworthiness directive (AD). ARSA's letter points out that the legal interpretation — and existing guidance — violate the Administrative Procedure Act (APA) and force maintenance providers to divine what is required to comply with the AD.
Boeing Ramps Up Push Into the Airplane Parts Business
04-24-2016: Boeing Co. is ramping up its push into the parts business, as part of a broad effort to cut costs and secure a new source of revenue even more lucrative than making aircraft.
Aircraft Maintenance Is Key Industry For U.S. Economy
04-26-2016: According to the 2016 Global Fleet & MRO Market Assessment released at a Capitol Hill briefing by the Aeronautical Repair Station Association (ARSA), the U.S. civil aviation maintenance industry — often an unseen part of the aviation industry — employs more than 270,000 people and generates $43.1 billion in economic activity.
FAA orders 'urgent' engine fixes for Boeing 787 Dreamliners
04-23-2016: Describing it as an "urgent safety issue," the Federal Aviation Administration has ordered modifications on specific General Electric engines on some 787 Dreamliners because an icing problem could force those engines to shut down in flight.
New Parts-Release Requirements Pushed Back To October
04-21-2016: The FAA and European Aviation Safety Agency (EASA) pushed back introduction of a key provision in the newest maintenance regulatory guidance shared by the agencies, citing input from repair stations that need more time to work the changes into their procedures.
Federal Aviation Act Does Not Preempt Products Suit
04-20-2016: In a case involving a malfunctioning airplane engine that led to a fatal crash, a federal appeals court has ruled that the Federal Aviation Act, which largely governs in-flight safety, does not pre-empt state law products liability claims.
Arizona flight school was in the 'best position' to prevent Germanwings crash
04-20-2016: More than half of the families affected by the March 2015 Germanwings crash have filed a suit against the Arizona flight school that trained suicidal co-pilot Andreas Lubitz. DW spoke to the law firm behind the suit.
Thousands of Zodiac seats subject of FAA proposed AD
04-19-2016:  US FAA officials are proposing to issue an airworthiness directive (AD) for the removal of certain aircraft seat components produced by Zodiac Seats California LLC, after determining that over 10,000 seating systems "may cause serious injury to the occupant during forward impacts when subjected to certain inertia forces."
Survey Spotlights Repair Station Audit Burden
04-19-2016: Input from nearly 70 repair stations in a recent industry survey on audits underscores the thoroughness that regulators and customers exhibit when auditing facilities to ensure they comply with rules and standards.
ARSA Takes Aim At McCaskills Repair Station Amendments
04-14-2016 The Aeronautical Repair Station Association (ARSA) is taking aim at two proposed amendments -- both from U.S. Sen. Claire McCaskill (D-Mo.) -- to the Senate's FAA reauthorization bill.
Survey Shows Audit Frequency Still Hampers Repair Stations
04-14-2016: FAA-certificated repair stations continue to undergo scores of audits each year, including duplicative ones that the agency is working to reduce, an Aeronautical Repair Station Association (ARSA) survey...

Older News Articles & Press Releases


Notice: AAIRRG is a licensed insurance company in the state of Montana. AAIRRG operates in 46 states under the authority of a Federal Law which requires registration with each state in which it wishes to operate. You can ascertain your state's status by visiting www.aairrg.com/states. If you should find that your state is not included, AAIRRG will register upon your request to become an insured. This offer is void in any state or jurisdiction in which it would violate their rules or regulations.