Apr. 23 (NBD) -- With the development of mobile internet, insurance products specific to niche sectors of a certain kind of event saw a boom. One of such products, flight delay insurance reached its peak in 2015, but now, few insurance companies are offering this kind of service. 

The flight delay insurance was first launched by China Southern Airlines in 2007 as an add-on service for consumers. As there is a large possibility to see flight delays in China, the domestic market saw demand for flight delay insurances. 

With typical application scenarios, the new insurance product attracted a lot of insurers, and in its prime period, at least 20 property-liability insurance companies were offering such insurance. 

However, the flight delay insurance market witnessed sharp decline in the number of market players in recent years. Data from a third-party internet insurance platform showed that in 2015, ten insurance enterprises were providing flight delay insurances, but the number reduced by a half in 2016. Last year, only one enterprise kept such insurance in its portfolio.

Industry insiders believed that such product cannot be operated constantly and may not be the solution to the delays.

According to a report, the average on-time performance of China's passenger airlines was only 76.76 percent in 2016.

As of reasons of current high frequency of flight delays, Jiang Li, deputy general manager of the insurance service platform Huize.com, told NBD that typhoons, rainstorms and other weather changes could result in delays of flights across China. 

In addition, few civil airways, low flight frequency, and the mismatching between the expansion of the aircraft fleet and the route capacity are major reasons for delays.

In recent years, high probability of flight cancelation caused by weather changes discouraged insurers. For example, Alltrust Property Insurance stopped its flight delay insurance service because of the exorbitant reimbursement rate. 

Therefore, insurance companies added exception clauses designed to avoid the unaffordable compensation, and the cancelation of flights, diversion, and returning to the point of departure are included in the clauses.

It is noted that insurance providers now tend to sell the flight delay insurance in a package, which also includes accidental death insurance, emergency rescue services or other services, in an attempt to increase revenue and reduce operation risks.

Email: zhanglingxiao@nbd.com.cn