NU Online News Service, Dec. 12, 1:56 p.m.EST

The aerospace-insurance market will continue its soft period aslead premium fell an average of 2 percent for 2011-2012 insuranceprograms, according to Aon Risk Solutions.

With a total of 218 renewals to date for the year, renewalpremium dropped to $628 million, according to Aon's report,“Aerospace Insurance Market News.”

The market sector covers airports, manufacturers and serviceproviders.

The data used covers 80 percent of the total lead premiumexpected to be placed in 2011. The report notes that while there ispotential for the averages to “shift slightly, there is unlikely tobe a significant change before the end of the year.”

Aon says that beneath the top-line data, there are significantdifferences between the main sectors of the aerospace industry.

The airport sector enjoyed rate reductions around 7 percentduring the year while manufacturing premium rose 2 percent onaverage.

Aon notes that the driver of airport-insurance price reductionsis the number of exposures, which was the principal driver duringthe recession. Despite improved economic conditions, economicconcerns remain in Europe and North America, Aon notes.

The service sector saw lead premium rise for the first timesince 2006. After consistent reductions of around 6 percent eachyear, prices are expected to rise 3 percent on average with2011-2012 placements.

“Aerospace continues to be an attractive place for underwritersto do business,” says Aon in its report. “Despite annual premiumfalling from around $904 million for the market as a whole in 2006to an estimated $760 million in 2011, capacity continues to bestable.”

Ample capacity is expected to “be healthy” through next year,says Aon.

The cousin of the aerospace insurance market, airline insurance,is expected to remain flat for the rest of thisand see the same going in 2012, according to a previous report fromAon.