USAIG's Brogan Stresses Role for SMS in Underwriting

 - November 29, 2021, 12:19 PM

Aviation insurers are looking at safety management systems (SMS) as an “extremely important tool” when evaluating risk, said John Brogan, president and CEO of United States Aircraft Insurance Group, stressing the need for companies to fold such an approach into their operations. “The insurance industry is behind it and believes in it,” Brogan told attendees at the recent Corporate Jet Investor Miami event.

He noted the stress the insurance market has come under by a number of factors—from rising costs to liability trends—and said, “That’s where safety management systems come into play for us.” While it is still too early to determine quantitatively, he said insurers, in general, see that SMS programs are "moving the needle on safety. They've done it on the airline side and the airlines have reaped the benefits...with the reduced accident rate and reduced overall insurance.”

General aviation is not there yet, Brogan added, “But I can assure you that your aviation underwriters are looking for that.” Further, underwriters are not just looking for a checked box that a company has an SMS. “The underwriters want to visit. They want to look under the hood and feel the SMS. They want to feel that it's part of your culture and that it's active,” he said. “That will be an ingredient in the soup for underwriters pricing the risk.”