The History of Aviation Insurance
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 insurance has been concentrated within just two insurance pools, with more than 50% of all U.S. aviation 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 the 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. Of course, the states resolved the issue by decreeing that aviation was an unregulated line of insurance, which means there is minimal oversight.
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. The result of all this is that aviation in the United States is one of the most profitable lines of liability insurance. 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 20 years or so. That's thirty points more profit than average!
How We Broke Through
The reason that AAIRRG is thriving is that, with few exceptions, each new aviation marketing effort in the past has been generalized, whereas AAIRRG is exclusively focused on certified Part 145 repair stations. Repair stations are a much safer risk than FBOs, charters, flight schools, firefighting, etc. This is the "miscellaneous" aviation class of business with which repair stations have been lumped.