Willis reports rise in aviation insurance costs

by Gill Montia

Story link: Willis reports rise in aviation insurance costs

Broker and risk management specialist, Willis, is forecasting that aviation insurance premiums will rise through to the end of 2008 and into 2009.

In a report by the firm’s Aviation Practice, Willis notes that in November aviation premiums increased 16%.

During the month renewals by five pure cargo carrier programmes saw premiums rise by 40% because of a number of major losses in this sector over the past 12 months.

The rise is much higher than for passenger airlines

The report describes the market as hardening, despite relatively benign loss levels and over capacity.

It attributes the shift, in part, to the global financial crisis and notes that international insurers are taking a harder attitude toward pricing than those in the US, in efforts to achieve higher percentage increases in premium.

Willis expects gross premium for 2008 to exceed $2 billion, compared with gross premium of $1.8 billion in 2007.

Meanwhile airline claims for 2008 currently total $1.3 million compared with claims totalling $1.8 million at same point in 2007.