Aviation insurance continues to show increases, with April renewal rates showing an overall increase of 4 percent in lead hull and liability premiums, according to Aon's monthly aviation report.
The increase is notable, Aon said, because average fleet value is down by 1 percent and passenger forecasts are down 7 percent for the month.
Aon said 81 percent of programs saw increases in April and have been showing steady increases over the past three years. The question, Aon said, is "whether this hardening market is satisfying underwriters' needs, or whether they push for higher increases as the year progresses."
The current increases, Aon added, do not appear to be enough to satisfy profit demands.
Capacity still remains healthy, Aon continued, with plenty of companies still in the market.
So far this year, losses, excluding minor losses, stand at $597 million compared to $351 million at the same period last year.
The increase in losses can be traced to one airline accident in North America involving 52 fatalities and the loss of one plane that landed in the Hudson River in New York.
Touching on the H1N1 virus variation of swine flu and its affect on the airline industry, Alex Hindson, head of enterprise risk management at Aon Global Risk Consulting, noted that the event could have a serious affect on travel plans and on airline passenger loads in the future.
"It is not simply a question of people putting off their travel for the duration of a problem and then spending more on travel once the situation improves," he said.
"What would happen to the industry if people increased the amount of video conferencing that they did and sent fewer people around the world on business? Aviation companies need to look at the long-term implications, and business continuity planning is a key part of this," he advised.
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