NU Online News Service, June 30, 3:40 p.m. EDT
The loss of a jetliner with 153 aboard in the Indian Ocean off the coast of the Comoro Islands will impact prices in the aviation insurance market even further, a broker with Aon said.
Operated by Yemen Airways, the Airbus 310-300 crashed around 1:50 a.m. local time, a statement from Airbus said. Flight IY626 was on its normally scheduled run from Sana'a, Yemen, to Moroni, Comoro Islands, when it crashed.
According to Yemen Airways Web site, the plane held 142 passengers and 11 crew members.
Magnus Allan, aviation industry analyst for Chicago-based insurance broker Aon, said the accident would "certainly make a very challenging position a lot worse," making insurance renewals in the final quarter of the year even more expensive.
Twenty percent of the aviation industry has renewed their insurance and the remainder will see an even tougher market when their policies come due, he said.
"This will add to the upward pressure on aviation insurance," Mr. Allan remarked.
Before this accident, 2009 losses were exceeding historical averages by 10 percent, and this accident would only add to the trend, he explained.
"Premium increases were averaging 15 percent or more, and it will continue to be higher than that as the year progresses," said Mr. Allan.
"The main thing to note is that the aviation industry has always had a potential of high catastrophe losses," he advised.
According to several sources HSBC was the lead insurance broker for Yemen Airways and ACE Ltd. was the lead insurer. The hull had a value of $34 million.
A company representative at ACE said the company does not comment on issues related to claims. HSBC in London did not immediately return an e-mail request for comment.
This is the second loss of an Airbus in a month while flying in bad weather. Earlier this month Air France Flight 447 crashed off the coast of Brazil into the Atlantic Ocean, taking 228 lives. Officials suspect clogged pitot tubes, which measure air speed, may have been to blame for that accident.
According to reports, French officials say the Yemen Airways jet that crashed today was barred from flying in French air space, citing numerous problems with the plane.
This particular plane, Airbus said, entered service in 1990 and has been operated by Yemen Airways since 1999.
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