http://ozreport.com/forum/viewtopic.php?t=51569

http://ozreport.com/21.037

Mark Forbes writes:

Basic entry-level cost, 25 SLDs, not towing.

$300 one-time application and review. This pays for the effort needed to review,
revise and approve all of your school documentation, including the time to help
you get it right and work with you to flesh out the details. You pay this just
once, on initial application of your school to PASA.

$523 per year for insurance coverage up to 25 student lesson days…that's 25
one-day-wonders, or six students who progress through multiple lessons (capped
at four per student per year). Plus a one-day-wonder. So that's just under
$21/day for one-off students, or $83.68 for a student who follows a training
program and becomes a pilot, no matter how many lessons that student takes in a
year. For a student who's learning to fly solo, the first four training days
count, and after that they don't. You still have to log them with the RRG so we
know the activity level, but you don't get charged for them. A local hang
gliding instructor here charges between $1500 and $2250 for a complete training
package to bring a pilot up to a solo rating. That's between 3 to 5 percent of
the overall cost, to pay the insurance bill.

The Foundation's initiative is intended to help small school instructors get
over "the hump" of becoming PASA-certified, by offering a one-time cash grant
reimbursement on completion of certification. That certification includes
becoming insured through PASA…you're not a certified school until you pass the
PASA review *and* have insurance issued to your school. Small schools using the
pay-per-SLD model are all grouped as additional insureds under the master policy
issued to PASA.

Results this year were good. If we can keep this low rate of claims up for a few
years, we're going to see significant cost reductions in the future. Randy
Leggett is working to get more schools signed up, and if we can bring the bulk
of them on board with the RRG, we should be able to drop rates about 30% for
everybody. Insurance is a case of "strength in numbers"…the larger the pool we
can spread the risk over, the lower the cost to each individual participant in
the pool.

We're still dogged by past losses, when it comes to actuarial risk analysis.
Even though the RRG is not paying those losses, they still factor into the
future risk estimates. Once we've demonstrated that our improved risk management
efforts are working, by not having accidents, fatalities and claims, the
actuaries will re-price our risk based on our results instead of our long-past
history. We just have to get there, and it means pain in the short term. On the
good side of things, while we're having to pay larger premiums for insurance,
the resulting profits in the RRG will allow us to more quickly pay off the loans
made to start it up. That will cut our interest costs down and bring us to a
sustainable capital base faster. We'll also see lower costs for reinsurance and
a wider range of potential insurers willing to write that coverage.

I want to see much lower premiums as soon as we can manage it. That will cut
costs to instructors and to USHPA, and allow us to reduce dues for members. But
it takes time, and there's no way to get there without going through this
short-term pain of high premiums. The more schools we have participating, the
sooner we can get the costs down for all.