While most of the insurance industry is experiencing rateincreases, airline-industry risks are seeing rates drop thanksprimarily to improved safety, says Aon.

In its mid-December 2012 airline-insurance market update, Aonsays that with 40 renewals to go this year, lead insurer airlinehull and liability premium has fallen around 10 percent on averagefrom expiring premium.

“Competition between insurers has been particularly strong, withfollowing markets offering additional savings,” says Aon.

Aon says insurers are working to meet broad “plans for forecasttargets in what is a profitable market as a result of the low levelof claims in the industry over the last two years. The industry isto be congratulated for the improved safety conditions.”

Of the 22 renewals on record for this month only three haveincreased lead hull and liability premium. This was primarilybecause of increased hull value. Overall, risk exposures on averagehave increased by 5 percent from the global recession of 2008.

Aon says if the market trend holds, the airline insurance linestands to collect $1.6 billion in premium for the period2012-2013.

The broker says five years ago, airline insurers sought tocollect $2 billion in lead insurer hull and liability premium,which was assumed to be the break-even point. The closest theindustry got to that point was 2010 when total premium reached$1.96 billion.

Loss figures for 2012, excluding minor losses, stands at $232million compared to $531 million last year. Combining an estimatefor minor losses, the overall loss is $832 million so far thisyear, compared to more than $1.13 billion last year.