Author(s): Lin, YH (Lin, Yi Hsin); Chang, YH (Chang, Yu Hern)
Title: Significant factors of aviation insurance and risk management strategy: An empirical study of Taiwanese airline carriers
Source: RISK ANALYSIS, 28 (2): 453-461 APR 2008 Language: English
Document Type: Article
Author Keywords: airline; aviation insurance; premiums; risk management
Abstract: Aviation insurance premiums have become a heavy burden for the airline industry since September 11, 2001. Although the industry must constantly balance its operations between profitability and safety, the reality is that airlines are in the business of making money. Therefore, their ability to reduce cost and manage risk is a key factor for success.
Unlike past research, which used subjective judgment methods, this study applied quantitative historical data (1999-2000) and gray relation analysis to identify the primary factors influencing ratemaking for aviation insurance premiums. An empirical study of six airlines in Taiwan was conducted to determine these factors and to analyze the management strategies used to deal with them. Results showed that the loss experience and performance of individual airlines were the key elements associated with aviation insurance premiums paid by each airline. By identifying and understanding the primary factors influencing ratemaking for aviation
insurance, airlines will better understand their relative operational strengths and weaknesses, and further help top management identify areas for further improvement. Knowledge of these factors combined with effective risk management strategies, may result in lower premiums and operating costs for airline companies.
Addresses: [Lin, Yi Hsin] Asia Univ, Dept Leisure & Recreat Management, Wufeng 41354, Taichung Cty, Taiwan; [Chang, Yu Hern] Natl Cheng Kung Univ, Dept Transportat & Commun Management Sci, Tainan 70101, Taiwan
Reprint Address: Lin, YH, Asia Univ, Dept Leisure & Recreat Management, 500 Loiufeng Rd, Wufeng 41354, Taichung Cty, Taiwan.
E-mail Address: yhlin1218@asia.edu.tw
Cited References: *BOE CO, 2003, STAT SUMM COMM JET A.
*ICAO, 2005, ICAO ACC PREV PROGR.
ABDELBARY TEM, 1991, NEW MODEL AVIATION H.
ABEYRATNE R, 2002, AIR SPACE LAW, V27, P406.
CAPLAN H, 2004, AIR SPACE LAW, V29, P3.
CHANG YH, 2004, TRANSPORT RES B-METH, V38, P369, DOI 10.1016/S0191- 2615(03)00047-X.
DENG JL, 1982, SYSTEMS CONTROL LETT, V11, P288.
DENG JL, 1989, J GREY SYSTEM, V1, P1.
ELKASABY BF, 2003, J AIR TRANSP MANAG, V9, P299, DOI 10.1016/S0969- 6997(03)00038-3.
FARRELL M, 2002, WILLIS GLOBAL AVIATI, V57, P1.
FENG CM, 2000, J AIR TRANSP MANAG, V6, P133.
FRAUENFELDER T, 1996, HIGH VOLATILITY AVIA.
FU CY, 2001, CORROS SCI, V43, P881.
LANE MN, 2005, J RISK FINANCE, V6, P192.
MARGO RD, 1989, AVIATION INSURANCE.
MARGO RD, 2002, AIR SPACE LAW, V27, P386.
MCDONALD N, 2000, SAFETY SCI, V34, P151.
NORONHA G, 2004, MANAGERIAL DECISION, V25, P1.
OUM TH, 1998, WINNING AIRLINES PRO.
RHOADES DL, 2000, J AIR TRANSP MANAG, V6, P87.
ROLLO VF, 1987, AVIATION INSURANCE.
ROSE NL, 1990, J POLIT ECON, V98, P944.
SHI K, 1990, 1990 IEEE UNC MOD AN.
THOMSON ME, 2004, RISK ANAL, V24, P1585.
TSANAKAS A, 2005, RISK ANAL, V25, P1653, DOI 10.1111/j.1539-6925.2005.00684.x.
WELLS AT, 2000, INTRO AVIATION INSUR.
WHITE JC, 1974, AVIATION INSURANCE E.
WOODS M, 1993, AIRFINANCE J, V155, P30.
Cited Reference Count: 28 Times Cited: 0
Publisher: BLACKWELL PUBLISHING
Publisher Address: 9600 GARSINGTON RD, OXFORD OX4 2DQ, OXON, ENGLAND ISSN: 0272-4332
DOI: 10.1111/j.1539-6924.2008.01036.x 29-char Source Abbrev.: RISK ANAL ISO Source Abbrev.: Risk Anal.
Source Item Page Count: 9
Subject Category: Public, Environmental & Occupational Health; Mathematics, Interdisciplinary Applications; Social Sciences, Mathematical Methods
ISI Document Delivery No.: 289NT
