Willis: Airline insurance market is a 'catastrophe market with an absence of catastrophes'
Willis released (Dec-2012) its 4Q2012 airline insurance market review, stating the market has “performed exactly as expected” during the quarter, with the predicted acceleration of the level of premium reduction materialising. The company stated the airline insurance market is a “catastrophe market with an absence of catastrophes and a new normal is developing”. Premium reductions “moved into double digits" for Nov-2012 renewals and are slightly higher for Dec-2012 renewals. USD100 million of premium has been eroded from the market and the downward path looks set to continue. 4Q2012 also saw the highest level of hull rate reduction of any this year, at 16%, greater than the annual average reduction of 14%. Passenger rates have reduced by 14% and are also higher than the annual average of 13%. High capacity levels have ensured significant levels of competition have continued in the market. The low loss levels mean that, despite the falling premiums, expiring policies have delivered good experience and on the whole insurers have made a profit on their 2011 underwriting year. [more - original PR]