in Aerospace

Edge launch aircraft RVI

Posted 10 March 2017 · Add Comment

Lloyd's Broker, Edge Group, have launched a facility for Residual Value Insurance (RVI) on commercial aircraft.



Peter Spencer, Edge Group’s Director of Structured Risks said: “We have spent a great deal of time developing a Residual Value product for commercial shipping and are now extending this to commercial aircraft.”

Residual Value Insurance (RVI) Indemnifies a bank or lessor against a loss that might occur if the sale proceeds an aircraft are less than the insured residual value at one point in time. This is normally on maturity of a lease or when a balloon payment is due in non-recourse debt financing. The cause of loss would be the unexpected decline in value the aircraft due to changes in market conditions. This enables a bank or leasing company to insure their downside at the end of a lease whilst keeping all the upside.

RVI has been notoriously difficult to arrange, but Edge Group’s London office has been at the forefront of the development of the product, cutting their teeth on difficult assets such as commercial vessels.

Peter Spencer said: “Of course RVI insurers would prefer to offer RVI on aircraft which are ‘newer technology’ narrow body commercial aircraft and the most competitive terms can be negotiated on these.  However, as we are working with a number of different insurers with different risk appetite, it is possible to find insurers prepared to offer terms on many types of aircraft provided these are not older than 14 years at maturity of the RVI. These include narrow body Boeing and Airbus, wide bodied aircraft, Freighters, Regional Jets, Corporate Jets, Turbo Props, Helicopters and certain aircraft Engines”

Edge Group have arranged underwriting capacity in excess of $50,000,000 per aircraft with insurers with ratings of between Standard & Poor’s ‘A’ to ‘AA’. Peter Spencer said “it is very important to arrange RVI with security which is undoubted. The policies we arrange are for periods ranging from 3 years to 12 years, so it is imperative for us to know the insurance company will be there to pay a claim when the time comes. Documentation is important too. Each policy is tailored to the specific transaction with lawyers acting on each side to ensure the documentation is watertight. As the policies can be for as long as 12 years and many things can happen over this time with changes in personnel, so claims are made direct to the insurance company’s claims department”.

Peter Spencer said: ”This is an exciting period for us. We are starting to see a flow of viable deals from all over the world and we are starting to put them away.”

* required field

Post a comment

Other Stories
Advertisement
Latest News

BMT develops visualisation tool for hazardous scene responders

BMT has developed a mobile application to help responders safely assess hazardous situations. The system processes data captured by drones into real-time 2D and 3D maps of the scene, enabling responders to make fast, informed

AD&S teams with 3D Systems to deliver first flight-worthy metal printed RF filter

Airbus Defence and Space (AD&S) has partnered with 3D Systems to deliver the first flight-worthy metal printed RF filter.

Aggregate paves the way for resurfacing Doncaster Airport runway

Aggregate Industries is to commence work on the runway at Doncaster Airport this year, following its recent involvement in resurfacing of East Midlands Airport's runway.

CAA selects ADS-B for improving airspace safety

The UK Civil Aviation Authority (CAA) today confirmed that ADS-B 'in/out' using 1090MHz is its preferred national system to improve electronic conspicuity for general aviation - ideally to be used through transponders.

AEB and CILT(UK) organise complimentary compliance conference

To help British trader to become Brexit-proof before 2019, global trade and supply chain experts in manufacturing and trade businesses are being invited to attend a free conference in Warwick on 11th October 2017, organised by AEB

DIT DSO organising UK capabiity showcase at DSEI

The Department for International Trade's Defence and Security Organisation (DIT DSO) Showcase will present current expeditionary and security capabilities with participation from 36 companies at this year's DSEI event,

MacTag SK0308140917
See us at
DSEI LB0911150917Aviation Africa BT18418SMI12DE BT203280917SMIUAV BT1005280917SMI AirMissBT0305251017SMI MilSat BT2907101117SMI FAV BT1007161117Advanced Engineering BT1007021117