Aircraft insurers likely to be unprofitable in 2009: Aon Corp
Aon Corp stated Airline Insurers (operated by Warren Buffett’s Berkshire Hathaway) and Alliance may be unprofitable in 2009, potentially resulting in an increase in premiums in 2010 (Bloomberg, 14-Dec-2009). According to Aon, insurers will collect approximately USD1.9 billion in premiums for hull and liability coverage in 2009, but have incurred USD2.26 billion in claims so far, as claim costs increased 70% year-on-year related to accidents by Air France-KLM and Colgan Air.
Aon Corp: “The airline insurance market is set to endure a third year without profit. As a result, it seems likely that the airline insurance market will continue to harden until well into 2010… If there had not been the Air France and Colgan Air losses, 2009 would potentially have been a fairly average or even good year for claims… Unless there is a significant event in the industry, prices are likely to continue to rise at their current rate until well into 2010,” Company Statement. Source: Bloomberg, 14-Dec-2009.