Airline Insurance Buyers Reaping the Rewards
Renewing airline insurance investors will benefit at the end of 2013 thanks to excess capacity, high competition levels, limited loss activity and an aggressive broking community. Willis Group, a global risk advisor, gathered the data and came to these conclusions. Willis’ quarter 3 instalment of its Airline Insight publication revealed that consolidation between airlines coupled with the later migration of renewal dates had resulted in an abundance of renewal activity in the final month and a half of 2013.
Willis have released a statement which noted that the number of renewals and the amount of competition in the aviation industry has allowed insurance buyers access to significantly lower premiums. The overall size of insurance programmes has also increased.
Willis’ aerospace chief executive Phil Smaje said: “Insurers’ desire to participate on the world’s blue chip airlines will continue to keep competition in this area high. The consolidation that has taken place in recent years has created a smaller number of very large programmes of significant interest to the market.”
In October, the total hull losses for the aviation industry totalled around £387m ($615m) and the liability losses in the same time frame reached £142m ($226m). It has been estimated that the overall insurance losses for the aviation industry will total £760m ($1.2bn) which includes a pro-rata estimate of attritional losses. Smaje added: “Despite many believing the market couldn’t go any lower than it has in recent years, the loss levels, plentiful capacity and growth in exposures will continue to provide ideal conditions for buyers and challenges for underwriters.”
James Savery, 12 November 2013