Nobody likes flying in turbulence, and in recent years aviation insurers have faced their fair share of upheaval.
First there was the major claim stemming from the war in Ukraine, and following that a string of claims for the all-risk market in 2025.
Launched in 2017, Hive Underwriters has built out despite these challenging conditions, and its CEO Bruce Carman told Behind the Headlines he is eyeing expansion into new classes.
He explains how the war market has learned from the Ukraine event, but there is still more work to do.
And during a busy airline all-risk renewal period, Carman said the nudge north in rating is not enough to account for the loss activity in the class.
In our news discussion, Fiona Robertson gives a lowdown of the noteworthy discussion points from Insurance Insider’s London Market Conference.
Transcript (Please note that this transcript has been computer generated and therefore may contain inaccuracies and grammar errors. Thank you.)
Sam Casey: Hello and welcome to Behind the Headlines, brought to you by Insurance Insider. I'm Sam Casey, and thanks for tuning in to the latest episode. Remember, you can subscribe to the podcast either on our website or on your podcast platform of choice. Few markets have seen as much tumult in recent years as the aviation sector. The war in Ukraine inflicted a huge and complex claim on aviation undervisers, and that has been followed this year by a string of tragic and costly losses for the all-risk market. So today it's a timely point to be speaking with one of the London Aviation Market's best known figures, Bruce Carmen, who runs Hive Undervisers. Bruce told me that the market continues to be challenged by an oversupply of capacity.
Bruce Carman: People see the nudge north, and you know, if it's five or twenty-five, by way of a rate increase, it's just not enough at the moment. But of course, it's a factor of supply and demand. There's still an oversupply of capacity as we speak. But how many of those carriers can continue to write the business at the current terms and conditions when they're north of a 200% loss ratio, I question. So the real question to them is when do they reduce? When do they put their pen away? When do they say no? And we're not yet seeing it.
Sam Casey: First up, to our news discussion. I am joined by Insurance Insider editor Fiona Robertson. Fiona, good to speak to you again.
Fiona Robertson: Yes, great to be here, Sam.
Sam Casey: We're recording hot on the heels of the London Market conference that we hosted a couple of weeks ago. We had some of the top executives in the market speaking, the likes of Patrick Tin and from Lloyd's, Lucy Clark from WTW. What were the key themes that emerged during the day?
Fiona Robertson: Well, I think for me, really, the key theme was probably a sense of excitement. And I know that you might not just find it as a theme, but I think really we were talking about the market entering a bit of a challenging time. But actually, the takeaway vibe was really encouraging. And I think people were talking a lot about innovation and what can we do that's new. And Patrick Tienen sort of started the day leading the charge on that and saying that as we get into a soft market, you know, it might actually be a time to be bold rather than putting your head down or trying to fight against the headwinds you're facing. So his call was for total innovation along the lines of the sort of total football star, which I must admit I'm not a football fan, but I did watch Ted Lesser, so I sort of knew what he was talking about.
Sam Casey: Somewhat over my head as well.
Fiona Robertson: Well, I think it worked for Ted Lesser, so hopefully it can work for uh Patrick Tannan as well. Essentially, what he was talking about was just innovating on multiple different fronts, trying to you know bring people together to think about innovation, talking about how can we get Lloyd's carriers putting out bigger line sizes, collaborating through consortia. The vibe of the day was a really positive one, despite the fact that the market is facing some challenges.
Sam Casey: And what does it feel like people think they're going to see more of next year in 2026?
Fiona Robertson: Well, I think probably MA is one big one. So we've obviously seen a number of MA deals fairly recently, and no expectation that that will stop. That will be an exciting one to watch play out. I think also AI has obviously been a focus of investment for the past couple of years, and I think that will keep playing out. Lucy Clinton, who was talking about finally making progress towards some of the digital transformation aims ahead. So I think that you know getting to that point of the tipping point, I suppose, on technology will be one thing to watch play out as well.
Sam Casey: The perennial challenge for any insurance businesses as we reach points in the soft market is how to continue growing. How is it that the companies are going to try and achieve that?
Fiona Robertson: I think there were a few different threads that came up throughout the day, and some of them are probably ones that we've heard people talk about a little bit throughout the year. So generally, say renewable energy or the transition between zero and how can we support new technology, or it might be data centers as well. So there's sort of certain areas of economic expansion where people are interested in thinking about how do we support that, how do we make it easy for people to realize that London has lots of expertise to support them. But there were also some other things that surprised me a little bit as well, and maybe not necessarily focused on the products so much, but I think the distribution theme was an interesting one in this regard. So often facilities, for example, have been a big theme of the year. So facilities growth at Lloyd's was running at something like 50% according to Patrick Hunan. And people so often think about facilities as something that can potentially have a negative impact on the market in terms of how much competition it creates for those who aren't on the facility. But actually, what people were talking about in facilities was how those vehicles can kind of be used to bring new risks to London. And it's not something we haven't heard too many people talking about until fairly recently. So I think that's a kind of another thread to watch in terms of can we get different risks coming to London because the market is good at subscription market placements, used to signing up to these facilities and you know, do just some of the data on the more tech-enabled facilities help you to source business in different channels than you might otherwise. So I think that was seen as a potential growth avenue as well.
Sam Casey: Well, Lynn, I think it was a great conference, lots of interesting insights. So uh thanks for giving us your takeaways.
Fiona Robertson: Thank you. Yes.
Sam Casey: Hive Underwriters was launched in 2017 and has built out during a period of dislocation in the aviation market. First, there was the war in Ukraine, and more recently, there has been the challenging 2025 loss year for the all-risks market. Its founder, Bruce Carman, has decades of expertise in the aviation class and has some great insight into how these events impact the market. He's clearly infused by the nimbleness of the MGA model, and there are plans afoot for Hive to continue expanding. I'm delighted to be joined by Bruce now. Bruce, thanks for coming and speaking to me today. Pleasure, Sam. Thanks for coming in. So you founded Hive back in 2017 after a long career in the more conventional Lloyd's market in aviation. Can you tell me what it was that made you think I want to start an MGA?
Bruce Carman: Thank you. Great opening question. I was 27 years fifth person in at Atrium, and in that time at Atrium, learnt the marine hull, the TLO IV, mortgages interest classes, moved on to the offshore oil and gas, and then political violence, terror, but also at the same time as all of those, um, was underwriting the aviation hull war account together with XS Avium 52. Post 9-11, that all changed, and the focus was really on aviation war. And it was an exciting time. At that point, we led, I think, probably over a third of the world's airlines, the majors out there, and had a large book of general aviation. So I became an aviation war specialist, I think, for want of a better phrase. And from there, the question I think was: was there ambition to do something more? The team growing beneath me had ambition. Atrium maybe at that time wasn't growing at a fast enough pace, and that's when we left to find a new home. And the new home maybe didn't suit me as well as it suited the team beneath me. So at that point, I had to really think about what it was ultimately that I wanted to do. Did I want to climb a greasy pole in a political entity as a carrier, or did I want to do something a little bit more unique for myself? Hence the genesis of Hive in 2017. And that was, I guess, a sea change moment where I think everyone needs a good partner behind them. And I certainly had one of those who said, do it, I've got your back.
Sam Casey: And it's been an interesting ride since. So you started off with a focus on aviation wall, given your background. But as we sit here today, you're sort of cross-class within most of the aviation lines, and you've recently added space to the portfolio as well.
Bruce Carman: Yes, the Final Frontier, just embarking on the Final Frontier, the arrival of Jack Keneally and Duncan Smith as our rocket scientist sitting behind him doing the do. Welcome to them, and really looking forward to working together with those guys. They've got market out performance as their DNA, which is what we really like here at Hive. It's about that bottom line profitability and alignment with the carriers whom we serve as an intermediary NGA. So we've grown in a steady way, starting with Hull War back in 2017-2018, then into the third-party war liabilities market, otherwise known as XS AVN52. We then built into the all-risks market with the support of Arch, and that was welcome in 2020 just as lockdown was occurring, a really weird time to go into aviation all risks. And dare I say it's a great time, as witnessed by the figures, where planes don't crash when they're sitting static on the ground. But what was in focus was the accumulation of those assets. And we then started to look at technology available in the marketplace for tracking assets and worked out that schedules and timetables really were obsolete methods for working out accumulations at airports, given these weren't conventional timetables anymore during COVID and aircraft being moved to the Mojave Desert and/or Alice Springs, etc. So we then looked at real-time transponder ADSB and built our own tech stack, some of which we've mentioned before and showcased, I think, to our clients, but it's really starting to take effect now.
Sam Casey: I've just had a look. The listeners won't be able to see it. It's very smart, and you've got a lot of data at your fingertips there.
Bruce Carman: Yeah, the map's pretty. There's lots of colour. We love colour. It certainly tells a good story, I think, but actually more than that, it's the data behind it when we can go into a client and say during CrowdStrike, when your aircraft were in the wrong area or on the tarmac at Chicago O'Hare or LaGuardia, etc., we can say that you were in excess of your aggregate policy limit. So we're reshaping people's policies according to the exposures now. And I think that's the proudest moment. But you know, what we're doing here, I think, you know, whether it's in aviation, whether it's in space or the next classes that we're looking to build into, the challenge is to bring the best in class technology. Now, I'm not here just to talk about it. Genuinely, the thing is to build it, and it's the underwriters, part of their USP and the analysts that we have here, very proud of the analytical intel that we're bringing to the party at the same time. And then talking to externals to say, you know, what is it that we can do by way of development? So, yeah, we're not the programmers.
Sam Casey: Do you feel you have additional freedom to undertake those sorts of projects in an MGA structure as opposed to your previous experience in more conventional Lloyd syndicates?
Bruce Carman: Free as a bird. Or is that a bee? I'm not sure. I'd say absolutely, we have the freedom to explore. You know, one could say, how does Hive afford that? Well, you know, the profitability that we're demonstrating at the moment gives us more than enough enablement to that capital venture, such that we're really investing in technology, really investing in the way forward, such that we can be nimble in that space and deliver something that genuinely speaking, our carriers struggle to match. And I guess that's the thing. You know, I call when people say, What is it you do? Um, I, you know, I liken us to a fund manager. We're managing large carriers' funds, but we have to outperform the market. So there's no point in us being a tracker, no point in us just giving capacity to a facility, a broker, line slip, etc. You know, our challenge is to outperform all of those metrics through risk selection, and the technology is the thing that's allowing us to do that.
Sam Casey: And talking about that aviation market, I think it's fair to say it's been a pretty active year in the line of business. There seems to be barely a week that goes by where there's some sad incidents or crashes. How have you been navigating that?
Bruce Carman: Clear air turbulence is a thing that people talk about these days in the world of aviation, and there have been a number of events where aircraft, obviously duck and dive at a minute where the crew had no idea it was going to occur, and if you haven't had your seatbelt on, it can cause trouble. From an insurer's perspective, we've had a fair bit of our own turbulence as well, and clearly Russia as an event was one that blindsided most people. Now, whilst Hive identified the threat to Ukraine and very proud of the fact that we exited our involvement in the Ukrainian domiciled airlines a year or so prior to the invasion, sadly that was the thin end of the wedge. What we didn't envisage was the sanctioning of Russia and the trapping of assets in Russia, which obviously ensued in the world's biggest case at law, and still ongoing. We're appealing butcher and outcome that he ruled on. So, you know, little that I can say at this moment in time save that it's been a turbulent time. All I would add to that is that at your darkest hour, I think you do your best work. And that's when our backs to the wall, we had clearly exposure to that event, and no one's hiding from that. Did we outperform? Clearly not. At that point in the market, I don't think there was anyone writing aviation whole war that didn't have an element of that event. And with that, you have to double down. You have to say, what is it that we didn't pick up? What is it we can learn from this, and what can we identify by way of threats going forward using our Intel, our analytics, and our database. And that's exactly what we've done.
Sam Casey: What are the lessons which you think can be taken away from the Russia event and applied to the future war portfolio?
Bruce Carman: Well, I think I I'll have to hold my hand up and say complacency. I mean, whether, you know, I can't sit here and plead black swan and say, you know, woulda, coulda, shoulda, but yes, we should have done better going forward. We will and we have already identified exposures. And now no our tech allows us, I keep saying it, I know, but but it genuinely now allows us to know what's in any one country, what's registered, and what we have by way of exposure. So, you know, the obvious example there would be China and Taiwan, which is obviously a focus of Lloyd's from a realistic disaster scenario perspective. And even prior to that coming out, we I think were one of the leaders to say we know what this looks like. We've got our arms around that as an exposure amount. And going forward is no secret that we've reduced our exposures there. We've also sublimited the original policies. And just on that note, my one word of kind of caution would be that the market, three and a half, more than three and a half years on from the evasion hasn't yet evolved to the degree that wordings haven't changed. And, you know, this should be in the domain of underwriters working together with brokers and their clients to say what coverage is realistic going forward. And I know certain brokers have made efforts to change some of those wordings, but the underwriters still, as a community, are poorly corresponding and not really cohesive enough in that regard and making a best effort to change those terms, conditions in the wordings such that they're fit for purpose going forward.
Sam Casey: It seems like you feel the market is better prepared for that kind of event in the future, but there's a bit more work that could still be done.
Bruce Carman: I think some are. There's certainly been a hiatus in rates, you know, with the void of capacity. Certainly it's a space for the brave, of which we were one post-event, and there were a few of us. And in that environment, we then create a market, make a market, and that market has now attracted others like beads to the honeypot, there I said, and here they come. So we have a lot of people looking to access the market. Some are literally just giving their pen to the brokers at discounted rates, and that's what makes a market. You know, here we go with competition again.
Sam Casey: And moving on from the war events of 2022, and after that, we come to 2025, which on the risk side of the portfolio, that's a really challenging year. We spoke with Richard Brindle of Fidelis earlier in the year, who is a strongly opinionated man, and he called the aviation market self-destructive on that front. How do you compete in that marketplace? There's lots of capacity, there's been high loss activity. How do you carve your way through it?
Bruce Carman: Richard does have a large market share in that area, and we don't. So maybe they might have lost more money than we have. We've put our pen away and underwritten that cycle, I think it's fair to say. The losses in that regard, some of them may well be subrogated, you know, the American airlines into the Black Hawk over Washington, D.C. Tragic event that it was. And you know, talk of subrogation at the moment, it's penciled in for north of a billion dollars as a loss. That makes a massive differential swing in that marketplace, should that not be subrogated and/or paid by the US government. But then you've obviously got the lights of Air India, more recently, UPS, and then Delta. In fact, they've had a couple of incidents, two aircraft into each other a couple of weeks or a few weeks ago. Then you've got Jeju tragically off the end of the runway and into a concrete barrier. And you know, all of these add up. And then don't let's forget the attritional losses that play the bumps and scrapes and FOD and damage that is to engines. So lots of apron scrapes, lots of incidentals, and they add up to over a billion, as I say. So, you know, the maths doesn't look good, including American, north of $3 billion in losses. And even if you took American out of that, it's north of $2 billion. The premiums of the market, $1.5 to $1.6 billion all in. Not enough from an airline or risk perspective. So rates have to change.
Sam Casey: And yet there still seems to be carriers entering the class and capacity increasing.
Bruce Carman: People see the nudge north, and you know, if it's five or twenty-five, by way of a rate increase, it's just not enough at the moment. But of course, it's a factor of supply and demand. There's still an oversupply of capacity as we speak. But how many of those carriers can continue to write the business at the current terms and conditions when they're north of a 200% loss ratio? I question. So the real question to them is when do they reduce? When do they put their pen away? When do they say no? And we're not yet seeing it. So I think management maybe needs to have a conversation with some of those underwriters to say, where do you see the value?
Sam Casey: Because currently Do you think it might it'll be a case, you know, maybe when we get to the end of this year and people look at their figures and say, what's going on here? Something may shift.
Bruce Carman: Yeah, to the bigger carriers, it might be a rounding error or pocket change. To the smaller carriers, that obviously isn't the case. At the end of the day, everyone's in this to make money, and you know, there are certain carriers who are leaders of this class who aren't just going to walk away from this business overnight. So respectfully, you the job is a tricky one, but we're nearing that stage where not everyone gets the same terms. It's a vertical market, and risks get a little bit harder to place. When people get more principled, reinsurance costs start to bite. The reality of making a profit looms heavy over a number of people. So I I we we're watching it with very open eyes and uh proud of the job that I have to say that the team here at Hive have done. Andy and Ben have done a cracking job in really risk selecting and walking away from things that don't make sense. And brackets, our loss ratio is a very profitable one. So there are ways and means in the down cycle of underwriting it.
Sam Casey: Yeah. And you talk about being prepared to walk away. Now you're built out from not just aviation, war across aviation, you've got space as well. Being almost more cross-class, does it give you more of the ability to flex the portfolio in that way and respond to events?
Bruce Carman: Diversification. I always said when I started Hive that I didn't want my kitchen table to have one leg. You knock it over and it's not really fit for purpose. Whereas if we have 12 legs to our kitchen table, three legs or so could probably be knocked off and you can still dance on it. So having that diversification is clearly key to the specialty model that we have. And we're not stopping with aviation. We have some very fruitful conversations at the moment in other classes. And, you know, when you look at isolation, in totality, it's somewhere between seven to eight billion US dollars of premium income globally when you include the general aviation, the products, manufacturers, etc. So it's not a massive pot, you know, when we talk about pots of premium, and then you look at something like the marine market, which is in excess of 40 billion dollars. Now, you know, to compare and contrast those two, they are chalk and cheese really, but then from a transportation perspective, what we're doing from a tech and a mapping and a numbers perspective, it's not rocket science to evolve into that. So, yes, the conversations in those spaces, if we can do the mapping of an aircraft at 500 miles an hour, know where it is every 30 seconds of its journey, and we can do the accumulation piece, and we can do the threat assessment to its location at any one time, to do it on a vessel on the high seas at five knots or ten knots, an easier challenge, dare I say it. And then when you look at buildings, and should we climb into the DNF and/or the property and political violence market, static buildings, and we're looking looking at different perils clearly, but not unadjacent to what we're doing.
Sam Casey: So further diversification is likely to be the flavour of things to come.
Bruce Carman: It's not just watch this space, it's going to happen imminently, and you know, hive's evolution, and we're not just diving into the next thing that comes along. You know, it's called my kissing frogs exercise, and there's a lot of frogs we're kissing at the moment, but actually we only need one or two of those to deliver and evolve, and that will happen. And I think there's an element of patience that comes into this. Those that know me maybe think of me as one of the least patient people they know. But I think at the end of it, that's the thing that gets me out of bed is is the challenge to incentivize, motivate, and bring on new teams.
Sam Casey: And what's your sell to a team that you're speaking to, a frog that you're kissing if you want to use it? Why should people come and draw in hive?
Bruce Carman: Because they could turn in something prettier. No, it genuinely, the culture that we have here, I'm very proud of it. And you know, so the team should be, because it is a oneness and it is something that you know I don't see people talking about their line manager or their manager because they have uh experience and/or managerial role themselves. So we're very proud of the development of individuals, be they you know start-out trainees from a school lever or grad trainee perspective, into underwriting assistants, assistant underwriters, and then into underwriters fully fledged. And we've demonstrated that already. So the training program we have here is grand. I think the key core aspect to this is Hive is independent, and the independence that we have allows us to share equity. So everybody in this business is a shareholder in the entity. So Hive is wholly owned by staff. Not a lot of people out there can say that. There's private equity, there's trade that owns people, there's big, ugly owners and bankers that are behind a lot of these people, and yes, they can see their way to a payday. And we've seen a lot of MA in our market in recent weeks and months. But actually, Hive's true independence allows people an opportunity to come in and have a slice of that pie, and that's exactly what we're doing.
Sam Casey: And is that something you wish to maintain sort of the medium term in terms of an ownership structure?
Bruce Carman: Who knows what's ahead? To have a sponsor or someone who's aligned with us could be of interest. However, at this stage in our cycle, it's working. We like it, it's delivering results and profitability, and people in the workforce here I think are enjoying it, the dividend they receive.
Sam Casey: And it's quite a busy point in the year in terms of renewals we're going through at the moment up until the end of the year. How you how are you feeling about the market currently and what what are your priorities as you look towards 2026?
Bruce Carman: So it's a really busy time. 60 to 70% of the world's airlines and banks, lessors renew their policy in Q4. 112 is a very key date, which obviously we've been working to now for some weeks and is looming to us. 1.1 is also a key date for us. We have six or seven, but seven probably now with the space binding authorities renewing. So we have conversations with some 20 Lloyd syndicates by way of carriers and partners to our binding authorities. And that's exciting because you know, some of those are new partnerships, new correspondence, which is very welcome. There's a lot of interest in what we're doing, and I'm not just saying that, it's all welcome. You know, we welcome a conversation with all of these people. So, what we're really looking for, and I think our next step is we've had some incredible supports from some of the people that have been with us as carriers since day one back in 2017-2018. And our challenge is to build out with carriers who are going to be here not just long-term, but across the cycle and across the various classes and the various binding authorities we have. So, cornerstone capacity, as I'd call that, which are people who are going to deliver, uh we're going to deliver profitability and returns to them. They're going to deliver us continuity of support. You know, it's AA A plus we're talking to. We're not looking really to the budget and Scarpa that needs a fronter on the front of it. So we do have a pride in, I think, the security that we're bringing to the market as well.
Sam Casey: Well, Bruce, I'm afraid that's more or less all we've got time for today, but it's been great with speaking with you. So thanks for coming on the show.
Bruce Carman: Pleasure, thanks, Sam.
Sam Casey: Before you go, a few of the top headlines from the past fortnight. The downstream market continues to be beset by loss activity, and acclaim from Mol Group in Hungary is expected to cost over 400 million euros. Australian insurer IAG has put on hold its plans to launch a Lloyd Syndicate after encountering issues around tax treatments. And the London market is aiming to support the rebuild of Ukraine, with MGA K2 RubanCon's specialty launching a facility dedicated to Ukraine war on land risks. That's all for this week, but we'll be back again in a fortnight's time.