Breckenridge’s aviation line records successful take-off
Parsons “fell into aviation insurance” by way of being a flight instructor. Prior to 9/11, the regional airlines were requiring prospective pilots to have a minimum of 1,500 flight hours – Parsons, who was flight instructing in North Georgia at the time, was sitting on about 500 hours. He described the prospect of securing 1,000 more hours as a “long, rough way to go.”
But luck came his way when a friend told him about the aviation insurance sector, which seemed to Parsons “a nice mix of aviation and business”. His interest was piqued by the fact that many aviation insurers at the time owned small airplanes, and they would hire pilots as underwriters who were able to operate the aircraft for the purpose of visiting brokers and clients on behalf of the aviation markets.
In 2000, Parsons left his job as a flight instructor and took his first underwriting position with United States Aviation Underwriters, a subsidiary of General Re Corporation, a Berkshire Hathaway company. Over the next 18-years, he earned his stripes as an aviation underwriter and took several leadership roles, including assistant vice president and assistant branch manager for AIG Aerospace Insurance Services, Inc. and vice president and senior business development manager for Berkley Aviation.
When W. R. Berkley exited the US aviation market in 2018, Parsons joined AssuredPartners Aerospace, Inc., where he was an aviation insurance sales executive and underwriter specializing in all lines of aviation risks. And then in July 2020, the “aviation risk guru” was hired by Breckenridge Insurance Services as a senior vice president, senior broker, with the remit of building a book of aviation businesses.
“I’ve been in the aviation insurance sector for going on 22 years. In addition to that, I’ve also been on the board of directors for the Georgia Business Aviation Association (GBAA) in Atlanta for over 12 years. My commitment to the GBAA, as well as being a long-term underwriter in the business, has enabled me to develop a vast network of aviation insurance underwriters and brokers in this marketplace,” said Parsons. “My experience, and those relationships over the years, definitely came to fruition when Breckenridge hired me to start their aviation product line. I’ve been able to knock on the doors of companies and underwriters that I’ve known for years and get the appointments I needed in order to start placing business.”
Some may have considered it an uphill struggle to launch a new aviation product line a few months into a global pandemic (when airplanes were grounded, and people were told to stay at home) and a few years into a hard aviation insurance market – but Parsons welcomed the challenge with the knowledge that his extensive expertise and market relationships would grant him take-off.
The aviation insurance marketplace is currently experiencing a “correction,” according to Parsons, following a 12-year soft market cycle from 2006 to 2018. The past few years have seen some turbulent conditions, with carriers seeing poor underwriting results due to inadequate rates, higher claim costs caused by costly liability settlements and increased repair costs, and a greater frequency of attritional losses. As a result, several insurers have exited the aviation marketplace, which enabled the remaining insurers to reevaluate their pricing strategies and risk selection criteria.
“The hard market continues,” Parsons told Insurance Business. “With regard to the COVID-19 pandemic, people might think aviation risk reduced because airlines haven’t been flying as much, but we still had a higher fatality rate in the airline market in 2020 than we did in 2019. From a fatality standpoint, those claims are having to be paid out. We also had ground collisions, the Boeing 737 Max grounding issues and weather-related incidents and accidents due to hurricanes and tornadoes – and all of this continues to drive the rate up.
“It’s a steep hill to climb after a 12-year soft market cycle. I do foresee this hard market continuing up to a point. There are some rumors of new capacity entering the marketplace, but until that happens, markets will continue to push rate where they need to, and do what they can to retain their renewals. One trend that has emerged, going into our third year of hard market conditions, is that carriers seem to be more willing to negotiate around coverage issues, limits, and to a small degree, premium, in order to retain their renewals.”
This is where Parsons’ next-level understanding of aviation risk sets him and his agents up for success. In his capacity as aviation product leader for Breckenridge, he can draw on his vast knowledge of products liability, workers’ compensation and commercial general liability exposures to alleviate underwriters’ concerns before they consider submissions. This has enabled him to find solutions for hard-to-place risks – such as helicopters, owner-flown turbines, older piston aircraft, and aviation maintenance facilities – which have been widely rejected by underwriters in the hard market.
“My goal is to have Breckenridge at the forefront of the top producers in aviation insurance,” said Parsons. “Most aviation-centric producers are specialists – they only deal with aviation risk. But in recent years, there’s been a lot of consolidation as many experienced aviation brokers have reached retirement age and have sold their agencies to the larger corporate brokerage houses, who aren’t necessarily hiring aviation specialists to service those accounts.
“In aviation, it’s so important to have somebody that knows the territory, understands the industry, knows aircraft, and can speak the language to not only the underwriters, but also the aviation operators and aircraft operators and owners out there that are purchasing the policies. What I would like to see in the next five to 10 years is Breckenridge being at the forefront of those specialist aviation brokerages that offer the right coverages and can continue to provide the level of service that these aircraft owners and operators expect from brokers that truly know the business.”
Breckenridge Insurance Services is a national wholesale insurance brokerage/MGA delivering commercial coverage solutions in all 50 states. To find out more about the aviation product line, visit: https://www.breckis.com/solutions/aviation/
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