Airline industry in recovery
The global airline industry is recovering, Aon Risk Solutions reports, with rising passenger numbers and fleet investments resulting in airline insurance premiums rising by an average 4% on 2010/11 placements.
According to Aon’s market outlook report for 2011, after an overall decline in passenger numbers forecast for 2009/10 renewals, 2010/11 placements show a recovery in every region of the world, with airlines in Asia Pacific predicting the largest increase, at 12%.
Regional airlines predicted the biggest rises (28%), followed by international airlines (14%), low-cost (10%), flag (7%) and charter (7%).
However, insurers paid out more in airline claims in 2010 than they took in premiums.
Last year, insurers saw around $2.1 billion of claims, compared to an average $1.5 billion between 1998 and 2009, although at 601, fatalities for 2010 compared with a long-term average of 621.
Aon comments: “It appears as though the loss profile of the industry is evolving, given that the last two years have seen a very high level of claims, but the actual number of incidents well below the long term average.”
The broker’s head of aviation in the UK, Simon Knechtli, sums up: “The bottom line is that the only reason for the small rise in market premium is the airline industry’s rebounding risk exposures, including fleet value and developing number of passengers.”
However, Mr Knechtli concedes: “It is very difficult to sum up the position of the airline insurance market in a simple statement because the conditions are exceptionally complicated with market players deploying a variety of tactics to try to achieve their desired portfolio performance.”
Category: Aon News, Business Insurance News, Insurance News
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