NU Online News Service, Sept. 14, 11:13 a.m.EDT

Market conditions in the airline-insurance market are notexpected to change as the industry has demonstrated increasingattention to safety, according to Willis Group Holdings.

In its monthly Airline Insight report, Willis' Aerospacedivision says losses for the first nine months of the year hit afive-year low of $794 million, including $250 million in July.

Willis says the market remains “remarkably stable, with nochange from the drivers of capacity and claims.”

The three incidents and two fatalities during the month of July“reflects excellent safety performance of the industry, which hasdelivered some good fortune for underwriters in the wake of anextremely volatile year for other industries.”

July was the busiest month for placements with 33 renewals, butpremium dropped close to 3 percent.

Overall, there have been 104 renewals and a drop in premium of 1percent as of the end of July.

July witnessed three accidents:

• Asiana B747-400 freight jet that crashed after takeoff as itleft Seoul, Korea's Incheon Airport on July 28. The crash killedtwo members. Loss reserve was put at $127 million.

• An Egyptair B777 suffered a cockpit fire while sitting on thetarmac at Cairo Airport in Egypt on July 29. The fire burned a holein the aircraft and injured five passengers. Loss reserve was putat $60 million.

• The fuselage of a Caribbean Airlines 737-800 broke in halfafter it overran the runway at the Georgetown Airport in Guyana onJuly 30. No injuries were reported. The hull reserve was place at$49 million.

Willis notes that “renewals again witnessed the trend for lowsingle digit premium increases against higher levels of exposureincrease. The level of rate relief as a result of this exposuredevelopment remains a potential issue for the market.”

However, Willis says the reality is that while the globalairline fleets have grown in terms of exposures in hull value andpassenger numbers that experience in “recent years is thatincreased exposures do not directly translate into claims.”

Steve Doyle, business development and sales director for WillisAerospace notes that individual losses do not have great impact onairline market and the line “needs a shift in overall tradingconditions to significantly change” its direction.

Earlier this month, a privately owned aircraft carrying 44professional hockey players, coaches and crew perished in a crashon take off in Russia.

An insurance industry consultant, Andrew J. Barile, who heads upAndrew Barile Consulting Corp. Inc., says that the loss would nothave effected the airline insurance or reinsurance market becausethe event is deemed not a large enough to have an impact.

Updated 1:26 p.m. EDT with last two paragraphs.