The growth of aviation insurance has paralleled the growth of the aviation industry itself.

• A. True
• B. False
• C. Not stated
• D. Both

Answer: (A)

When an industry grows, the demand for insurance tends to grow with it because more aircraft and more flights create greater exposure to potential losses. As the aviation fleet expands, routes multiply, and operations become more complex, insurers see higher risk, so they offer broader coverages, higher limits, and greater capacity (including through reinsurance). This natural expansion of coverage and capacity together increases premiums and market activity in step with the industry. There can be cycles and periods after major accidents or events that cause temporary deviations, but the long-run trend is that aviation insurance grows in parallel with aviation itself.