Aerospace Insurance Market Approaches Parity in 2008
Aon launches the Aerospace Insurance Market Outlook 2009
LONDON.- Average lead premium in the aerospace insurance market continued to decline during 2008, but underwriters will be looking to increase premiums this year, Aon’s Aerospace Insurance Market Outlook 2009 shows. Total like-for-like lead premium in the sector fell by 1% on average in reporting currency, from US$849m in 2007 to US$832m in 2008.
The three main sectors of the aerospace sector received different treatment from underwriters according to the level of perceived risk:
Average lead premium reduction in the Airport sector: 4%
Forecast passenger growth has slowed for the second consecutive year, reflecting the tougher economic conditions with fewer passengers leading to lower exposures. Average premium in the sub-sector fell by 8% in 2007.
Average lead premium increase in the Manufacturer sector: 3%
The manufacturer sector was the only one to see average premium increase in 2008, although this was significantly influenced by losses at a handful of renewals without which the sector would have seen an average premium reduction of 1%.
Average lead premium decrease in the Service Provider sector: 6%
Forecast gallons of fuel being provided by the refueling sector fell for the second consecutive year, which is likely to reflect the high cost of aviation fuel during the early months of the year and the work being done across the industry to improve fuel consumption.
“While there is a temptation from insurers and to be somewhat gloomy about the current financial position, the aerospace industry continues to demonstrate rewards for modern, pro-active risk management, quality control approach, improved loss control and mitigation of litigation,” observes Steve Turner of Aon Global’s UK Aerospace team in London. “This will result in the reduction of insurance claims and in turn risk transfer costs along with added protection to a company’s balance sheet in both the good times and the difficult times.”
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