Lower accident rates in 2003 and growing consolidation are continuing to cut airline insurance costs, despite a spate of crashes in the early weeks of 2004, says US reinsurance provider Aon. The absence of further terrorist attacks on civil aviation has meant that hull war insurance premiums, which rose dramatically in 2001, have since fallen steadily and steeply, averaging 30% lower than the year before.
Although the first quarter of 2004 saw few insurance renewals, those which took place were renewed at significantly lower rates, roughly 14% below a year ago. As well as lower accident rates, many insurance providers are re-entering the market, and this higher capacity is bringing stronger competition and further price reductions, Aon says. It warns that the first quarter is always quiet in the insurance market, so it is unsafe to draw conclusions about the market.
Source: Flight International
