Aon: Airline Insurance Market Rates Continue To Decline

Rates in the airline insurance market continue to decline, despite rising exposures (average fleet values and passenger number forecasts), according to Aon’s Q3 2012 market update.

Aon reports that a high level of capacity continues to drive the soft market conditions, with healthy competition for attractive risks.

The low level of claims in 2011 and so far in 2012 is another key factor.

Including an estimate for minor losses, Aon says total claims for 2012 so far are 40 percent lower than the 1995-2011 average and 60 percent lower than the five year average.

By the numbers this puts the current overall loss figure so far this year at $426.6 million, compared to $466.7 million at the same point in 2011.

Aon comments:

Last year’s loss figures at this point in the year were also at a historic low, meaning that overall claims figures so far for 2012 are extremely positive.”

Adding:

It should be pointed out that the airline industry will always represent a considerable risk and that a single claim or string of claims can instantly change these statistics.”

Despite the soft market conditions, Aon says aviation underwriters remain highly selective of the risks they support.

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