Fall-out in the overall insurance market from the recent devastating hurricanes in the USA is likely to slow the current rate of reductions in airline insurance premiums.
Major insurance broker AON predicts the slowdown in its latest Airline Insurance Market Review. Recent premium reductions have been averaging 7% for liability and hull insurance combined.
“The aviation sector has seen only limited direct damage from the devastating hurricanes, but the knock-on effect is that underwriters will try and end this year’s run of premium reductions,” AON says.
The likely slowing of premium rate reductions comes despite a good air safety record for 2005, even with the run of accidents in August. AON reports hull losses for the first eight months of the year totalled $431 million. That is 14% lower than the same period last year, which went on to become one of the industry’s safest years.
“This strong safety record meant that there is little evidence that the five major airline crashes in August will have a significant impact on renewal premiums,” says AON.
GRAHAM DUNN/LONDON
Source: Flight International
