As it strives to reduce greenhouse gas emissions and become more sustainable, the aviation industry is in a period of transition and technological change. Anthony Frankel, Global Chief Underwriting Officer for General Aviation at 色多多视频 discusses how insurance can help enable this evolution.
It’s now around 120 years since the first aircraft flight and it’s fair to say that the industry has changed quite a bit since then. The challenge of reducing greenhouse gas emissions, and making the aviation industry more sustainable overall, means that the pace of change is picking up once more, with developments in technology and the way aircraft are designed and flown advancing all the time.
Aviation accounts for roughly 2-3% of global carbon emissions. There’s a clear imperative for the industry to reduce this. Indeed, in 2021, the International Air Transport Association (IATA), which represents about 83% of global air traffic, passed a resolution to achieve net zero C02 emissions by 2050 – in line with the Paris Agreement on climate change.
This effort, IATA noted, will be a challenge and will require a coordinated push from the entire industry – airlines, airports, navigation service providers, parts manufacturers, and so on. Aviation insurance has a role to play here too; as the market that underwrites all these different actors, we are helping to insure the technology that will make the transition to more sustainable aviation possible.
Towards net zero
The aviation industry is exploring numerous ways to achieve net zero greenhouse gas emissions by 2050. We are seeing changes to wing design to increase fuel efficiency – and even in some cases changes to the shape of aircraft and the way passengers are accommodated on flights.
Some aircraft are beginning to use sustainable aviation fuels – known as SAF – which can be created from biogenic feedstocks like waste cooking oil or from municipal waste and other sources. SAF essentially recycle the equivalent of the C02 that the biomass used in its lifetime and contain fewer other pollutants, such as sulphur dioxide, than conventional jet fuels. These SAF can be blended with conventional fuels, meaning that no major changes are needed to airline equipment or airport infrastructure. But while IATA estimates that SAF could contribute 65% to the net zero by 2050 target, sustainable fuels are not the complete answer to the carbon reduction challenge that airlines face.
Many airlines are exploring the use of battery-powered aircraft that use electronically-charged batteries in place of jet fuel. Late last year, the Alice – a battery-powered plane that can carry nine passengers and two crew – made its maiden voyage, flying for about an hour. This is an exciting development, and there’s great potential for these small planes to be used for cargo deliveries.
But for larger scale aircraft, different means of power are likely to be more appropriate. The industry is exploring the use of hydrogen and nuclear power. Hydrogen produces far fewer emissions than fossil fuels, and several large airline manufacturers are in the development stages of designing hydrogen-powered planes. Some of the challenges here include the need for hydrogen to be stored differently than conventional jet fuel, and possible design changes to the shape of aircraft to accommodate differences in factors like drag.
Manufacturers are also examining the feasibility of solar-powered aircraft – that would be covered in solar panels and effectively operate as pseudo-satellites capable of staying aloft for several days or even weeks or months at a time.
Underwriting the transition
Working with our clients, we are excited to be involved in the development phase of these new generation technologies. And insurance has a vital role to play in helping this next phase of air travel to – quite literally – get off the ground.
We have decades of experience of insuring aerospace, and a great deal of knowledge about new and emerging areas of technology and the risks and opportunities they present. And the more risks we see, as early into the development and design phase as possible, the more data we can harness to better underwrite the risk.
Our international footprint gives us great scope to work with clients around the world as they develop and test this new technology. And the intellectual property and innovative nature of the Lloyd’s market – which wrote the first ever aviation insurance policy more than 100 years ago – enables us to tailor coverage to the specific and evolving risks that we are seeing.
If we can be involved during the experimental, developmental phase we can gain deep understanding of the risks and opportunities of these new technologies – and by so doing enable them to develop and evolve.
Flying into the future
While we want to support our aviation clients in the move towards their net zero goals, we also recognise that we have a role to play in making the aviation industry more sustainable in other ways too – like job creation. By supporting innovation in technology we can help make the aviation industry fit for the future, and, therefore, to employ a new generation of talent with new, diverse skillsets.
Aviation insurance too plays a vital role in sustainability in other ways, for example enabling supply planes and air ambulances to reach the scenes of humanitarian disasters. Today insurance coverage helps to get these aircraft into some of the most vulnerable communities in the world.
Sustainability is a key part of the AXA group’s purpose: to act for human progress by protecting what matters. Aviation insurance supports and enables human progress in all manner of ways – covering, drone use, satellite launches and orbits and much more. As an underwriting team we help our clients to assess, manage and transfer the risks associated with these exciting and developing areas of air travel – and the technology and infrastructure that support them.
While meeting the net zero target is undoubtedly a challenge for the aviation industry, technology is evolving apace, and insurance coverage is evolving – and will continue to evolve – alongside it.
We have the knowledge and expertise to propose a solution for these risks and support the innovations happening in the aviation industry. Drones, aircraft, piloted or unpiloted, battery powered or solar, wings or no wings we want to see the risk!
The overall goal of a more sustainable industry aligns with our own goal of being a sustainable insurance partner, there for the long term, adapting to the changing environment and finding ways to support and accelerate progress.
