NU Online News Service, Dec. 19, 12:12 p.m.EST

The airline-insurance industry should be profitable this year ifthere are no major losses. Additionally, soft-market pricing andample capacity should continue into 2012, according to Aon RiskSolutions.

Aon's report, released Friday, follows a Willis report released late last week on the airline-insurance marketthat said the high number of renewals in the fourth quarter isputting a strain on brokers' abilities to represent all riskseffectively.

In its report, Aon says “the final shape of the airlineinsurance market for 2011-12 renewals is becoming clear.”

Total lead hull and liability premium for 2011 should fallaround $1.9 billion. However, with a low level of claims this year,the results should be comfortable “enough to ensure that capacityin 2012 remains consistent.”

Aon says rates are still in decline, overall. However, Dec. 1“saw four renewals with significant increases” in lead hull andliability premium because of “worsening loss records.”

When the renewals with the poor loss records are removed,premiums fell 9 percent.

With 167 renewals this year as of the release of the reportFriday, 49 percent have seen reductions in lead hull and liabilitypremium for their 2011-2012 insurance programs. Aon says this isthe highest level of reduction since 2007, when about 70 percent ofplacements saw costs fall.

Aon says there are still 50 airline programs that have yet torenew before the end of this year, but the broker did not indicatethat the 50 would have an impact on the overall trend.

Earlier this month, Aon issued a report saying that the low number of claims andfatalities was leading to soft-market conditions for the airlinemarket segment.

Overall losses in 2011 stood at $1.03 billion compared to $1.96billion in 2010. Fatalities were below the average of 582, standingat less than 300.