For aviation brokers, hull and liability will almost inevitably dominate the placement conversation. But a much smaller specialist line could carry disproportionate value when it comes to keeping hold of the client.
Around 98% of brokers placing aviation loss of licence cover are aviation specialists, according to Ian Groves, head of aviation loss of licence at Orvia Underwriting in London. Yet he believes the product is often treated as secondary to the larger aviation lines, meaning brokers can overlook both its complexity and its potential value to the client relationship.
Groves has underwritten the class since 2003 and said it developed because conventional personal accident insurance was not designed around the medical standards applied to aviation professionals.
"One of the reasons loss of licence was created in the first place was because the existing products didn't meet their specialist needs," Groves said.
A pilot recovering from a concussion sustained on a rugby pitch, for example, could be cleared by a GP to return to an ordinary job within days but remain unable to fly for considerably longer.
"From an aviation medical standard, that's not permitted," he said, with aviation authorities potentially imposing a grounding period of three to six months while further injury is ruled out.
That distinction matters for brokers because loss of licence cannot simply be treated as another standard personal accident product. The exposure also changes according to the occupation being insured.
"Air traffic controllers are slightly different from pilots, trainees are different from air traffic controllers," Groves said.
Rather than applying one wording across each group, underwriters have to adapt the cover to the medical and occupational requirements of the people being insured, limiting how far loss of licence can be treated as an off-the-shelf add-on.
That nuance extends to how claims experience shapes the product. Groves pointed to a 2015 plane crash as a significant turning point in the industry's treatment of pilot mental health. He described a historic culture in which discussing mental health or admitting vulnerability could be difficult to talk about.
Underwriting increasingly considers not only an individual's medical history but the support infrastructure an airline has in place, including access to mental health practitioners and peer-to-peer schemes involving trained pilots.
"Pilots ultimately trust pilots more than they trust anyone else," Groves said, "because they know they're living that life and they know the experiences they're going through."
Mental health can also be more difficult to assess than conditions with clearer diagnostic markers.
"It's not like a heart condition or a cancer where you've got a bona fide medical test that tells you what you've got," he said.
That makes claims experience particularly important in understanding how exposures are developing. Groves pointed to one helicopter operator where his in-house claims team identified a cluster of hearing-related complaints, which investigation traced to older headsets with insufficient noise cancellation, allowing the operator to upgrade its equipment.
Examples like that demonstrate that the line can provide more than an indemnity after a pilot is grounded. Claims patterns can expose underlying problems within an aviation operation that might otherwise be missed, giving brokers more to bring back into the client conversation.
Groves said loss of licence can still be overlooked alongside the larger hull and liability placement. Some aviation brokers "perhaps don't know the product well enough," he said, particularly when they place relatively few loss of licence policies compared with hull and liability business.
There is also a lingering perception that the cover is administratively difficult, dating back to a time when individual paper application forms were required for every pilot. Groves said that reputation no longer reflects how policies are processed.
Loss of licence premiums can range from a few thousand pounds to millions depending on the size and age profile of a scheme, but Groves argued that its value to a broker should not be judged on premium alone.
"Even if the broker misses out on a hull and liability policy, if they can get their loss of licence home, that means they're having a conversation with that client year on year," he said.
That annual renewal provides another opportunity to understand what has changed within the client's business and potentially identify cover being placed elsewhere. It also turns the conventional hierarchy of an aviation placement on its head. Hull and liability may carry the larger premium, but losing those lines does not necessarily have to mean losing the client.
The smaller policy may carry less premium, but it can provide something the larger placement cannot guarantee: another reason to be back in front of the client next year.
