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Is there anyone with an actuarial / risk management background in this community that could explain how this is going to impact industry insurance rates? e.g. i

Is there anyone with an actuarial / risk management background in this community that could explain how this is going to impact industry insurance rates? e.g. is Boeing going to have astronomically high costs? Are airlines with 737 Max's going to also have to pay more? etc. etc.

ars 3y ago
Insurance cares more about actual crashes. Of which there have not been a lot. If anything all this attention should reduce insurance costs, since the planes will now be even more reliable than before. Insurance does not care about the appearance of risk, or bad press.
- ThrowawayTestr 3y ago
  I think two crashes in less than a year is a lot.
- s3r3nity 3y ago
  I’m not sure this is true. You can buy insurance on virtually any potential loss risk, like how celebrities can buy insurance for body parts: they obviously haven’t lost said parts, but that doesn’t mean the insurer charges $0.
  - ars 3y ago
    Other humans however, have lost body parts, so the risk is known. They don't charge $0, but they don't charge very much either.
SoftTalker 3y ago
Insurance rates are largely based on actual loss experience, maybe 737 MAX will cost a bit more in light of recent events, but 737 and other Boeing models have been flying for decades and are a very safe airplanes overall with a very well-known loss risk profile.
- cratermoon 3y ago
  > 737 and other Boeing models have been flying for decades and are a very safe airplanes overall with a very well-known loss risk profile. This is the catch, though. The 737 MAX is a 737 in name only. It's a bit of a ship of Theseus design, because Boeing management didn't want to take on the cost and time to build a new plane from the ground up. The company was under pressure from the A321neo and wanted something fast. Certifying a new aircraft also takes time and money. By altering a 737 Boeing was able to claim it was still a 737 and retain the type certificate and, important for the airlines buying it, not have to retrain pilots on a new type. Like many other things in creaky corners of the commercial passenger airline industry, the foundation is from the 1960s. Solid and appropriate for the time, it's now aged and unsuitable for modern applications. Like building an extra story on a house with a foundation made for a single story, the compounded risks introduce so many unknowns as to make it impossible to calculate the real risks. Insurance companies should look at the MAX again and consider whether or not it deserves to be classed in the same risk profile as the 737 type.

ars 3y ago

Insurance cares more about actual crashes. Of which there have not been a lot. If anything all this attention should reduce insurance costs, since the planes will now be even more reliable than before. Insurance does not care about the appearance of risk, or bad press.

ThrowawayTestr 3y ago
I think two crashes in less than a year is a lot.
s3r3nity 3y ago
I’m not sure this is true. You can buy insurance on virtually any potential loss risk, like how celebrities can buy insurance for body parts: they obviously haven’t lost said parts, but that doesn’t mean the insurer charges $0.
- ars 3y ago
  Other humans however, have lost body parts, so the risk is known. They don't charge $0, but they don't charge very much either.

SoftTalker 3y ago

Insurance rates are largely based on actual loss experience, maybe 737 MAX will cost a bit more in light of recent events, but 737 and other Boeing models have been flying for decades and are a very safe airplanes overall with a very well-known loss risk profile.

cratermoon 3y ago
> 737 and other Boeing models have been flying for decades and are a very safe airplanes overall with a very well-known loss risk profile. This is the catch, though. The 737 MAX is a 737 in name only. It's a bit of a ship of Theseus design, because Boeing management didn't want to take on the cost and time to build a new plane from the ground up. The company was under pressure from the A321neo and wanted something fast. Certifying a new aircraft also takes time and money. By altering a 737 Boeing was able to claim it was still a 737 and retain the type certificate and, important for the airlines buying it, not have to retrain pilots on a new type. Like many other things in creaky corners of the commercial passenger airline industry, the foundation is from the 1960s. Solid and appropriate for the time, it's now aged and unsuitable for modern applications. Like building an extra story on a house with a foundation made for a single story, the compounded risks introduce so many unknowns as to make it impossible to calculate the real risks. Insurance companies should look at the MAX again and consider whether or not it deserves to be classed in the same risk profile as the 737 type.