AAIRRG | Aviation Alliance Insurance Risk Retention Group, Inc.

Photo courtesy of Turbine Standard


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



FAA to drone owners: Get ready to register to fly
11-23-2015: While an actual rule could be months away, drones weighing about 9 ounces or more will apparently need to be registered with the Federal Aviation Administration going forward.
Contract Aviation Maintenance: Safer, More Efficient
11-11-2015: On November 10, ARSA Executive Vice President Christian A. Klein issued this response to James B. Steele's "Disturbing Truth About How Airplanes Are Maintained Today," published in the December issue of Vanity Fair magazine...
FAA to improve helicopter safety, prevent deadly fires
11-10-2015: The Federal Aviation Administration plans to take a major step toward preventing people from being burned to death in helicopter crashes...
The Disturbing Truth About How Airplanes Are Maintained Today
11-09-2015: In the last decade, most of the big U.S. airlines have shifted major maintenance work to places like El Salvador, Mexico, and China, where few mechanics are FAA certified and inspections have no teeth.
Unsecured jet bolts under heightened FAA scrutiny at Allegiant
10-28-2015: When two Allegiant Airlines pilots couldn't control their plane and scrubbed a takeoff from Las Vegas in August, the carrier discovered that a critical piece of equipment in the tail had come loose.
Virgin Atlantic jet was forced into emergency landing at Gatwick because engineers installed a part of the landing gear UPSIDE DOWN
10-23-2015: The lives of 447 passengers were put at risk when a stricken Virgin Atlantic jet was forced to make a dramatic emergency landing because engineers installed a part upside down, investigators found.
FAA to airline passengers: Leave spare batteries at home
10-13-2015: The Federal Aviation Administration is encouraging airline passengers to leave their spare lithium batteries at home when they pack for flights.
US to back ban on lithium battery shipments on passenger planes, citing fire, explosion danger
10-08-2015: The risk of unstoppable fires is prompting U.S. officials to back a proposed international ban on rechargeable lithium battery shipments as cargo on passenger airlines.
FAA To Investigate Cracked Windshield Incident
10-07-2015: Federal Aviation officials said a report will be filed to them after a cracked windshield forced a local flight to return.
How rare are pilot deaths on commercial flights?
10-05-2015: The death of a pilot on an American Airlines flight bound for Boston Monday was the eighth pilot death during a commercial flight since 1994, the Federal Aviation Administration said.  The number included both commercial passenger and cargo pilots and commercial charter pilots.
Lithium Battery Shipping Rules Could Get Safety Overhaul
10-02-2015: International Civil Aviation Organization (ICAO) member nations and airline safety advocates will attempt this month to legislate a safer way to transport billions of lithium-chemistry batteries by air every year.
With FAA's New Kid Seat Safety Rule, Will Kids Fly Safer?
09-30-2015:  Just when you think nothing the government does could surprise you, along comes the FAA's new child safety seat rule and, yes, leaves me surprised.
Inhofe Pilots' Rights Bill Gains Momentum
09-30-2015: General aviation advocates are encouraged that Sen. James Inhofe (R-OK) has secured a more than filibuster-proof 67 co-sponsors for the Pilots Bill of Rights 2 (PBOR 2) bill, clearing the way to move forward on the measure. Inhofe, who told an audience at EAA in July that his goal was to reach 60 co-sponsors on the bill, late last week appealed to his colleagues in the Senate to enable consideration of the legislation "in the next very short period of time."
An Overview of MAG, Change 5
09-28-2015: On September 9, the FAA and EASA signed change 5 to the Maintenance Annex Guidance (MAG). Repair stations must ensure compliance with revisions by December 8, 2015, unless a later date is agreed to by the authorities.
Lawsuit: Plane toilet cleaner poisons consumer drinking water
09-25-2015: Five American Airlines workers have accused the airline of using watercooler jugs to carry chemicals aboard planes to decontaminate lavatories -- and then returning the jugs to commercial circulation to be refilled with drinking water and redistributed.
FAA Provides Incomplete Clarification on Return to Service
09-21-2015: The FAA Chief Counsel's clarification of its letter to ARSA is incomplete—as the association's original letter attempted to delineate, there will be more than one person involved in accomplishing work for an air carrier.
American stops flights at major airports, problems soon resolved
09-17-2015: American Airlines says it has fixed the connectivity issue that stopped flights heading to and from Dallas, Chicago and Miami.
FAA controllers reveal flaw that could cause collisions
09-16-2015: The government's own watchdog agency is calling for Congress and the White House to make the skies safer.
FAA Affirms Repair Station Personhood
09-15-2015: On Sept. 11, the FAA issued a legal interpretation in response to a request for clarification whether a part 145-certificated repair station may prepare an airworthiness release on behalf of an air carrier for work it performed on an aircraft.
ARSA Works: FAA Affirms Part Recovery Rights
08-25-2015: On August 25, the FAA affirmed ARSA's contention that a repair station's rating allows it to make "continue-in-service" determinations on internal or attached articles.

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.