A report on airline insurance finds prices appear to be taking a slight up-tick while losses are hovering around 10 percent higher than last year, according to insurance broker Aon.
The Chicago-based firm's Aviation and Aerospace unit issued its monthly news letter, saying while June is not the best indicator of the market direction for the rest of the year, there are signs premium pricing is on the upswing, but slightly.
By the end of June, 65 percent of the total annual premium for the airline industry was reached. If the current trend holds for 2008, premium per renewal for the airline insurance industry will be $4.62 million compared to $4.6 million last year.
July will be the most telling month, Aon said, when 12 percent of the total airline industry premium was placed last year, making it the third busiest month of the year. A total of 31 airlines were expected to have renewed last week.
Losses are up over last year, Aon said, noting a Sudan Airways plane accident that killed a reported 30 people on June 10. With that, the losses for 2008 stand at $457 million compared to $391 million for the same period last year. Overall loss for the year, on a pro-rata basis, could top off at $715 million compared to $650 million for 2007.
Aon noted the loss activity is 10 percent higher than last year so far, despite being 70 percent higher in January.
Early indications are that for July premium will see a slight, low single reduction on renewals.
"Whichever way it goes, the month [July] will offer a good insight into market direction for the rest of the year, and as a result will be a key focus for everyone interested in the airline insurance market's direction," Aon said.
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