Aon Airline Insurance Market Outlook 2014

Of course, it's not as simple as all that. On the one hand, 2013 was another year with the lowest number of incidents and the lowest number of fatalities in the industry recorded since 1995 (when the Aon Risk Solutions aviation team began scrutinising the data). Insurance capacity also remained high in 2013, creating competition for inclusion on healthy airline insurance programmes.

On the other hand, while they were limited in terms of numbers, the value of hull claims was relatively high. As a result, total hull and liability claims were higher than premium in 2013, the first time that has happened since 2010. The difference between premium and claims was minimal, and the fact that it was driven by a relatively low number of large losses means that not all underwriters will have a negative result on their books. This means that while there is unlikely to be an instant hardening, there is likely to be increased scrutiny.

At time of going to press, details are still limited about the missing Malaysia Airlines flight MH370, but what is clear is that the aircraft carried more passengers than the total global number of airline fatalities in 2013, highlighting the potential for catastrophic loss that the airline sector will always represent. At this early stage of the year, we believe it is unlikely that this incident will be a catalyst for a shift in current market conditions, however should there be another large loss or a string of losses this could change.

Aon Risk Solutions team of aviation experts stand ready to work with airlines and the insurance markets to deliver insurance programmes that deliver value to our clients.

If there are any aspects of this report that you would like to discuss in more detail, please do not hesitate to speak to one of our team.