Growth among European and Asian airlines is likely to tip the balance away from North America in the aviation insurance market this year, according to broker Aon’s review of 2005.
The company says the North American share of global fleet value has declined from 37% to 33% since 2001, and passenger share has fallen from 41% to 36%. “This has led to decreases in insurance premium share from 39% to 32% to reflect changes in global risk exposure,” Aon says.
Aon cites the maturity of the North American market, “fierce competition” between airlines, the liberalisation of aviation in some emerging markets continued strength in the European airline sector as reasons for the shift.
“Global exposures are changing so insurers and brokers need to respond to changing risk profiles to offer the industry greater protection through risk management and insurance cover,” says Doug Peterson, Aon’s aviation global practice leader.
Aon says the 2005 insurance market was also characterised by high oil prices, a “challenging business environment,” consolidation and bankruptcy protection for some organisations and record orders for aircraft manufacturers.
Technological improvements led to “another strong year in terms of hull losses”, but the industry saw the highest number of fatalities since 2000.
Aon predicts “there will be increased focus over the next few years to ensure that this was a temporary issue rather than one that will impact the loss averages going forward.”
HELEN MASSY-BERESFORD / LONDON
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Read the full text of AON's Airline Insurance Market Review for 2005
Source: Flight International
