Aviation insurance sector turns in a profit
by Gill Montia
Story link: Aviation insurance sector turns in a profit
The airline and aviation manufacturing insurance sectors turned in a profit in 2011, following one of the safest years in recent times in terms of aircraft losses and passenger fatalities, Willis Aerospace reports.
In its latest aviation market review, the broker estimates total airline insurance premium in 2011 at $1.9 billion, against claims of $1.1 billion, giving rise to the first profitable year for the airline insurance sector in five years.
In addition, conditions were notably more favourable for airline insurance buyers with premium levels down 2.4% in 2011, compared with 1.3% for aviation manufacturing insurance.
There were 30 total losses of western-built aircraft in airline service last year, down from 46 in 2010 to the lowest number recorded.
Passenger numbers increased 5% from 2010, yet overall passenger fatalities continued a steady ten-year decline with 184 fatalities last year, compared with 648 in 2010.
The five-year average fatality rate per million passengers decreased to below 0.2 and Willis attributes the improvement to advanced safety avionics, plus improved pilot training standards.
Willis Aerospace chairman, Mark Wilford, comments: “New technologies continue to deliver improved long-term safety records and fleet/passenger numbers are growing.”
He adds: “However, buyers recently confirmed to us that aviation insurers should be reminded it is the aerospace/manufacturers sector that, by and large, has historically subsidised the overall aviation insurance market through more difficult times across other sectors.”
Other key findings from the research are as follows:
A total of 4,222 western-built aircraft were delivered in 2011, up 2.48% from 2010.
Airline passenger jet deliveries increased 6% from the previous year to 1,104 units in 2011.
Asia led the revitalisation of the aviation industry with the strongest passenger growth and highest number of new aircraft deliveries.
Meanwhile, aircraft deliveries to North American operators in 2011 were less than half the number delivered before the economic downturn in 2008.