The airline insurance market continues to soften and insurers may start to consider leaving the sector or limiting involvement, which eventually could affect capacity, an insurance brokerage said.

In its July report on the airline insurance market, Aon in London said the June premium renewal rates were down minus-15 percent, slightly off from this year's average of minus-19 percent. But Aon said the number was deceptive because one carrier in Eastern Europe experienced a 150 percent increase in premium. Without that increase, the month would have equaled minus-19 percent.

All signs point to continued premium reductions at least through July. Any upward changes may not take place until October, which marks the one-year anniversary of the current cycle, the brokerage reported.

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