Aviation

The Science

We have conducted extensive research into jet fuel price volatility and factors impacting the aviation industry.

Swap Comparison

Our in depth historical analysis of fuel price data highlights the impact of jet fuel hedging through swaps and the existential threat from traditional hedging solutions. We have compared this analysis to the performance of the Paratus aviation policy over the same duration.

Ticket Price Correlation

Through a detailed analysis of jet fuel price and the correlation to seat price, we evaluated the impact on consumers and the optimal insurance solution to boost an airline's competitiveness.

ZCC Comparison

Our 20 year historical analysis comparing zero cost collars (ZCCs) for hedging jet fuel versus Paratus insurance, highlights the ineffectiveness of ZCCs to effectively mitigate adverse jet fuel price volatility, especially in periods of high volatility and adverse global events.

The Problem

Existential Price Risk

Jet fuel price volatility is a fundamental risk to the aviation industry. As aviation insurance specialists, our bespoke policies reduce the adverse impact of energy price movements to stabilise the balance sheet and eliminate the need for costly hedging alternatives. The insured is protected from upward price increases, whilst benefiting when the jet fuel price declines in their favour.

The Solution

Balance Sheet Stability

The Paratus aviation policy mitigates adverse jet fuel price impact on balance sheets, shielding revenue and improving financial performance.

Diversified Risk Management Solution

Paratus insurance provides an alternative risk management solution. Jet fuel price insurance can be a substitute for or integrated into a combined strategy for managing jet fuel price risk.

Complete Discretion

Jet fuel price insurance policies are bespoke and designed to meet the client's optimal solution. Insurance provides discretion compared to alternative risk mitigation strategies.

Cost Effective

There is a one-time upfront premium and no additional costs or margin calls. Traditional hedging products can be opaque and lead to significant additional cost. Typically, these products are not transparent.

Rapid Onboarding

The policy is accessible to all and there is no credit bias. The onboarding process is straightforward and can be completed within two weeks.

Regulated

Paratus is regulated by the Guernsey Financial Services Commission (GFSC) and as a licensed (re)insurer, holds regulatory capital to pay claims.

Case Study

Protection Against Uncertainty

Recent global events, including the war in Ukraine and the worldwide disruption caused by COVID-19, have brought traditional risk management products, such as financial derivatives, under renewed focus. The risk and market disruption caused by Covid-19 now means that airlines need jet fuel insurance coverage to protect their balance sheet in a way that is transparent, easy to understand, cost-effective and trustworthy.

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