Premiums, claims down for aviation insurers: Aon

Claims and premiums for airline insurance were lower in 2012 than in 2011, a recent report from Aon Risk Solutions suggests, while competition will be intense in 2013.

Lead hull and liability premiums were US$1.61 billion in 2012, down from US$1.81 billion in 2011, according to the report, titled Airline Insurance: Market Outlook 2013 Rewards for Results.

“The airline industry produced a second consecutive year of exceptionally low claims,” according to the report, published by London-based Aon UK Ltd. “Excluding an estimate for minor losses, total claims for 2012 were around 70% below the long term average for the industry.”

Aon Risk Solutions estimated total claims of US$924 million in 2012, including minor losses.

“The number of incidents last year was 39, compared to 70 on average, while total insurable fatalities were 318, compared to a long term average of 597,” according to the report, which estimated major losses in 2012 totalled US$324 million, nearly 40% less than US$522 million in major losses recorded in 2011.

“Capacity is expected to remain very healthy in 2013,” Aon says. “With the industry’s strong safety performance continuing, competition will be intense among insurers.”

The report suggested that to maintain profitability in aviation insurance, 2013 will need to be “another year of excellent airline safety.”

Reinsurers covering aviation “seem to be heading for the best loss record in 25 years,” Aon reported, adding it predicts reinsurance limits and deductibles will likely remain stable in 2013.