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Pilot Shortage?

Well, it’s just now beginning to impact insurance. The pilot shortage, that is. After years of debate, it appears a bona fide lack of highly-experienced pilots might be closer to reality.

Many business aircraft operators we talk to are having a harder and harder time finding and keeping talent in the cockpit. This is becoming directly evident to us as well, based upon some of the submissions for pilot candidates we’ve received for insurance approval over the last several months.

The “magic number” of 1,500 hours total time has become a magic number indeed this side of the post-Flight 3407, Congressional push to amend airline pilot minimum qualifications. As pilots near this mark, once considered minimums for business jet SICs, many are scooped up by the regional carriers. This is having a larger impact on general aviation than ever before as companies have to pay more than ever before to keep a qualified crew.

And when their pilot does head for the exit? The reserve pool waiting in the wings for their wings typically does not bring nearly the same amount of experience to the interview table. Requests to add lower-time professional pilots are becoming more frequent, with some underwriters struggling to adjust.

Factor in the expense of sending said pilot to training and you can understand the trepidation of hiring managers who wonder whether they’ll be able to get a return on that investment or are they merely a short-term stepping stone for someone’s future that does not include them.

From an insurance perspective, underwriters of course always have more “skin in the game” than the regulators. So even though the FAA minimums might be met in terms of experience and training, for the millions of dollars underwriters often have on the line, they continue to look for much more than those minimums – pilot shortage or not.

A well-thought-out transition plan goes a long way to help smooth any underwriting turbulence that might be encountered when it comes time to hire new pilots and co-pilots who are a bit light on experience. Always best to talk this through with your broker before making that all-important hire decision.


Age & Aviation Insurance

Weighing the Pros and Cons of Hiring a Veteran Pilot

With the above-described pilot shortage starting to make itself known, one useful strategy is to consider a "veteran" pilot who has lots of experience and isn't quite ready to hang up their wings just yet. 

Probably the benchmark most often used to define an "older" pilot is the mandatory retirement age for airline pilots. In the USA that limit is 65, increased from age 60 several years ago by the FAA. Insurance underwriters do not have a mandatory cut-off for insurability of pilots, but are largely influenced by the age 65 rule.

Typically age is not a factor for corporate aircraft flown by a single pilot who has not reached his or her 65th birthday. But for every year past that age, he or she becomes more difficult to insure (without some modification to the policy wording, conditions, etc.) While underwriters don't like to "non-renew" an account, they might be reluctant to continue some policies beyond 65.

PROS AND CONS

Among the pros of retaining or hiring an older pilot is that they bring a tremendous amount of experience to the table for a flight department. Many valuable safety lessons in aviation are simply learned through "the school of hard knocks" – namely, experience. Many passengers feel safer with an older, more seasoned-looking aviator than with a young "wet behind the ears" pilot.

In addition, older pilots typically aren't looking to move up the career ladder, thereby making them potentially stable longer-term employees
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To read the rest of this article, click here!


 

BasicMed Begins May 1

According to the FAA, beginning May 1, 2017, general aviation pilots will be able to fly without holding an official FAA medical certificate as long as they meet certain requirements.   

Under BasicMed, a pilot will be required to complete a medical education course every two years, undergo a medical examination every four years, and comply with aircraft and operating restrictions such as a maximum of six (6) seats and 6,000 pounds MTOW, and no flights for compensation or hire.

Further, a pilot flying under the BasicMed rule must:

  • possess a valid driver's license;
  • consent to a National Driver Register check;
  • have held a medical certificate that was valid at any time after July 15, 2006;
  • have not had the most recently held medical certificate revoked, suspended, or withdrawn;
  • have not had the most recent application for airman medical certification completed and denied;
  • have taken a BasicMed online medical education course within the past 24 calendar months;
  • have completed a comprehensive medical examination with any state-licensed physician within the past 48 months;
  • have been found eligible for special issuance of a medical certificate for certain specified mental health, neurological, or cardiovascular conditions, when applicable; and
  • not fly for compensation or hire.

(For more details from the FAA website, click here).

BASICMED & INSURANCE

When it comes to insurance coverage, our advice is to not make any assumptions about what BasicMed means. Some might think they don't need to do anything at all anymore with regard to their medical status and can just keep on flying. Clearly, there's still some level of documentation and numerous restrictions on the type of flying conducted under the BasicMed.

Among other things as described above, pilots will need to retain their current exam checklist (filled out by a physician) with their logbook, along with a copy of their completion certificate from the online course, One insurance carrier aptly stated, "The new rule does not mean the pilot is absolved from maintaining their medical fitness for flight, rather they have a new option available."  


 

In This Issue

Online Drone Insurance

AIA 2017 Conference

Bench Strength!

Age & Aviation Insurance

BasicMed

Market Update

 
Hope Aviation Insurance
(800) 342-4673 USA
(803) 771-7766 INTL
Hope Aviation Insurance is an aviation-only brokerage firm specializing in turbine aircraft and commercial aviation operations in over 40 states and abroad. 

Client Testimonial

"It is very reassuring to know that, whatever the situation, Hope Aviation will quickly and very satisfactorily resolve it."

HOPE Notes

Marion Hope and Eric Barfield will be attending this year's Aviation Insurance Association conference. This annual event brings together brokers, underwriters, claims adjusters, and attorneys for continuing education, networking, and the latest industry updates. Featured speakers this year include aircraft design legend Burt Rutan and John Kuhn, CEO of Endurance Specialty Insurance.

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This year, the Carolina's are proud to boast NCAA national championships in baseball and football, as well as men's and women's basketball. A big part of these winning teams is their bench strength.

At HOPE, we're proud of our own bench strength that features six brokers along with the excellent work and daily customer care performed by Senior Account Executives, Kelli Feathers, Tami Davis, and Bernadette Manglaris. They themselves are backed by a great group that includes Account Executive Kathleen Naramore, Assistant Account Executive Stephanie Adkins-Parrott, and CPA Carmen Kennedy. Now that's a winning team!        


Online Drone Insurance!

Hope Aviation Insurance is pleased to announce the availability of a new online portal for insuring commercial drones. Underwritten by a leading provider of worldwide aerospace insurance, Global Aerospace, the portal is “designed to provide drone owners and operators the ability to quickly and efficiently purchase an annual policy online and pay securely via credit card.”

Hope Aviation Insurance has been providing insurance brokerage services exclusively for aviation risks since 1963. Our new online portal for drone insurance is another innovative step forward into the future as part of our “2020 Vision.”

To visit our new online commercial drone insurance portal, click here!



Market Update

Effective February 1, 2017, Aerospace Insurance Managers, a subsidiary of Hallmark Financial Services, Inc., began servicing aviation accounts that were previously underwritten by Meadowbrook Insurance Group since Meadowbrook has elected to exit the aviation insurance market.

As such, affected policyholders will receive non-renewal letters from Meadowbrook as official notification. All Meadowbrook policies are being considered for renewal by Aerospace but each account will be underwritten on a case-by-case basis and, as with all aviation insurance policies, there are coverage differences between Meadowbrook and Aerospace.

Either way, in our view sufficient market capacity remains for now to successfully place renewal coverage for all of these policies.

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