NU Online News Service, Nov. 10, 3:11 p.m.EST

Insurance broker Willis put its aviation premium reductions wellbelow the industry average, according to a recent report.

In its Airline Insurance Market Overview, the firmsays in its large aviation program, the Willis 50 programs,renewals so far in 2011 achieved premium reductions of 7 percentagainst increases of 7 percent for hull value and liabilityexposure increase of 13 percent.

However, Willis notes that only 14 of the 50 programs haverenewed so far this year, which is also an indication of “the levelof activity still to come.”

For the aviation industry as a whole, average fleet value hasgrown by 8 percent and passenger numbers have increased by 16percent, but premiums are down by 1 percent.

The findings are similar to those in a report released earlier this week by Aon that also says premium ratesare down by 1 percent.

Willis says the declines can be contributed to “abundantcapacity” and loss levels being at a six year low.

“This backdrop would suggest that there is little to halt theslide in premium levels,” says Willis.

The firm also noted that the current state of premium direction“is creating a market situation that is very favorable forbuyers.”

Taking advantage of the soft market, a few airlines have renewedearly, says Willis. Air India purchased a 15-month policy in 2010that was to expire on Dec. 31. The airline renewed the program Oct.1.

China Airlines, Mandarin Airlines and Transasia Airways, had14-month policies due to end in December. They canceled theprograms and renewed them Oct. 15.

Touching on war-hull coverage, which was instituted after theattacks of 9/11, Willis says rate reductions are continuing at 10to 20 percent. Premium volume “remains well below the long sinceforgotten benchmark of the volume of a wide-bodied aircraft and isnow estimated be below $100 million.”

The excess war hull third party liability market (also known asAVN52E) has incurred no claims since 9/11. Premium levels havefallen to be in the range of $200 million, says Willis.