Light-Sport Chronicles: Gold Stars & Black Stars

• Avemco initially anticipated three to five years of red ink from when it began covering S-LSA. Three years later, Mike predicted another one to two years before profitability on S-LSA underwriting.
• Most S-LSA accidents were caused by pilot error.
• Experienced GA pilots, not new LSA pilots, were the usual suspects.
• Most accidents happened during landings.
• Tailwheel pilots had more than twice as many accidents as tricycle-gear drivers.

The focus of cause for all this airframe crunching seemed to be S-LSA training. Most dealers weren't insisting on sufficient transition checkouts before sending pilots home with their new airplanes. And pilot psychology, not skill, was the culprit.

In a nutshell: The more experienced the pilot, the less respect the person apparently had for S-LSA, viewing them as small versions of "real airplanes." Such pilots didn't think they needed additional training, even though LSA have lighter weight and wing loading---great for slow takeoff and landing speeds and terrific climb rates, but more vulnerable to crosswinds and turbulence. LSA instructors frequently complain that it's easier to train new pilots in LSA than it is to transition experienced GA pilots to LSA.

Mike Adams understands that European sport pilots don't experience the same accident numbers in microlight planes. The reason: They've cut their teeth and built hours in microlights. Avemco's ultimate solution was to mandate five-hour checkout flights and instructor sign-offs after a flight review before agreeing to insure an S-LSA pilot.

Another downer has been the cost of repairing S-LSA. Airframes are still new and don't have the nationwide repair and parts support that GA has built over the decades. So, how have we done in the ensuing 12 months, Mike?

The good: "Overall, it's an improving accident picture."

The bad: "It's not happening as quickly as we had hoped."

"S-LSA net losses in dollars," says Mike, "are still between 100% to 200% higher than certificated aircraft. The other factor is the accident rate, which averages about twice that of GA. And again, experienced GA pilots transitioning to LSA flight remain the major cause factor in these accidents."

Is there a silver lining? You betcha. "In 2006 and 2007, our loss frequency for S-LSA was about four times that of the GA fleet. Through 2008 and into 2009, that ratio improved considerably. The two times GA accident figure covers all the years we've insured S-LSA, so you can infer that the increased training requirements we initiated in 2007---the five-hour transition checkout and an instructor flight review---have cut landing losses."

Mike studies FAA accident base statistics, broken down into accident types: taxi, ground, landing, en route and unknown. "And week after week, landing accidents make up 45% to 55% of all reported losses. Apparently," he quips, "we can takeoff; we can get where we're going safely---we just can't land once we get there!"

He surmises one primary cause: Pilots don't fly enough to stay sharp. "Bad approaches lead to bad landings. For example, statistics indicate lots of pilots don't make the decision early enough to go around."

Another contributor is the inability to consistently handle gusts and crosswinds. "I don't know whether to pick on CFIs or not, because we don't know how many take students out on crosswind days for practice. But it might also simply be lack of practice by rated pilots," says Mike. "If you've checked conditions and you're adequately trained, there's no reason you shouldn't be able to slip or crab to a landing without loss of directional control. I learned to fly at an airport with a main runway and a crosswind runway. We'd practice in crosswinds. I learned that if you can't handle it, you can always switch to the other runway."

Mike also sees improvement in the availability of LSA parts, qualified repair technicians and qualified instructors: "I give a lot of credit to the manufacturers. When we talked to them about these issues, the makers of the more popular models got right with the program."

He notes that potential and existing customers still push back about Avemco's requirement that flight reviews be conducted with instructors qualified in the specific model the insured pilot flies. "If I need brain surgery, I want a neurosurgeon, not a proctologist. If you've never taught in a particular model, why would you want to check someone out in it in the first place, if you know nothing about it? Instructors familiar with an airplane make a big difference. I expect Cessna will be on track when it begins to deliver in numbers. And as the PiperSport enters the network, we hope Piper's network will support it. A bigger pool of insured pilots certainly helps keep rates affordable for everybody."

Speaking of rates, in spite of the sub-stellar accident picture, Avemco hasn't raised base S-LSA premiums going into 2010. "We'll hold rates and continue to offer incentives, such as credits for accident-free periods, hangar storage and ongoing flight training," explains Mike.

For example, if you buy a PiperSport, own it two years and have no losses, Avemco will write you a new policy with a 15% credit. Although many policies bought in late 2009 still have several months to go, some initial loss figures indicate an uptick in claims. "Perhaps pilots are rustier: The poor economy may mean they're doing less flying," says Mike. "It could also indicate an increase in new-to-S-LSA pilots."

Looking at the overall challenge of underwriting what's still a brand-new industry, I asked about the pitfalls of insuring troubled aircraft, such as the Zodiac 601XL, which has had several fatal crashes, though most of those were built by their owners.

"Anyone we're already insuring---and we do have a couple Zodiac claims, I believe---will retain the same coverage they've had," offers Mike. "But we're not anxious right now to take on more of that kind of risk. I'm still a little cautious about ASTM and self-certification, and how aerodynamic or structural problems like Zodiac's will be resolved. Will owner-builders and repair shops have the wherewithal to make modifications properly? We don't know yet."

On the flip side, Mike praises the durability of S-LSA crash cages: "They're doing a good job of protecting occupants. We've had very few bodily injury claims. What's driving our loss ratio are the dollars paid for repairs and parts."

The writing is on the sky, fellow sport pilots: Let's practice those landings. Get sharp, stay sharp! The benefits to you, your passengers and the industry as a whole go way beyond keeping insurance premiums affordable.