Airline industry insurers forecast third consecutive year of losses
Aon released its Airline Insurance Market Indicators 2009/10 report, forecasting losses for airline industry insurers for the third year running, despite a 17% increase in premium prices between Jan-2009 and Jul-2009 (National Underwriters, 14-Sep-2009). Average fleet values are expected to increase by 1% while passenger numbers are forecast to decline by 9%. Total claims increased 15% above the long-term average, with 409 aviation-related fatalities so far this year, compared to 298 for the same period last year. Hull losses have more than halved, with only 20 losses compared to the long-term average of 42. Increases in insurance premiums may pre-empted by the level of “latent capacity” in the airline insurance market and increased competition as other insurers step in to take advantage of rising prices.
Aon: “While some of the industry data is starting to look more positive, given the well-documented decline in the number of business travellers, passenger number forecasts could be even more gloomy by the end of the year once more of the industry’s major players have placed their 2009/10 insurance programs. The tension between the insurance markets needing to increase premiums and an industry that is suffering from the effects of the global economic downturn continues,” Magnus Allan, Aon Global UK Aviation & Aerospace Analyst. Source: National Underwriters, 14-Sep-2009.