London - 11 May 2004 - The first quarter of 2004 has seen the overall value of claims for the airline industry continue to drop over last year (which itself showed the lowest level of losses in history). The total amount for hull and liability claims was US$148.91 million, which compares to US$239.94 million for the same period in 2003. Aon's Airline Insurance Market Review 1st Quarter 2004 also found that the trend for premium reductions continued in this quarter although these reductions have slowed and only a small percentage of airlines renewed their insurance programmes in this period.
"The continuing fall in the value of claims for the first quarter of 2004 is very encouraging news for the airline sector, particularly on the back of 2003 which in itself represented the lowest level of losses in airline insurance history," said Steve Doyle, Manager of Aon's Aviation Global Practice Group.
"Though the first quarter represented a small percentage of the total airline insurance renewals we saw an average premium reduction of 14%, which continues the reductions of 2003, albeit at a slightly slower pace. Some airlines have achieved greater premium reductions by continuing the trend of consolidating their insurance programmes with other airlines. This could impact the market in the long term as premium volumes decline and make the sector less attractive to insurers. The financial dynamics of the market remain finely balanced with the annual renewal profile allowing for insurance market reaction to any change in circumstances." Doyle added.
About Aon
Aon Corporation (www.aon.com ) is a leading provider of risk management services, insurance and reinsurance brokerage, human capital and management consulting, and specialty insurance underwriting. The company employs approximately 53,000 professionals in its 600 offices in more than 120 countries. Backed by broad resources, industry knowledge and technical expertise, Aon professionals help a wide range of clients develop effective risk management and workforce productivity solutions.
Aon Aviation
Aon Limited's Aviation division comprises of an experienced team of more than 250 leading specialists who design insurance programmes for a significant number of the world's major airlines. Aon Aviation is responsible for placing one of the world's largest airline group programmes, as well as arranging cover for the largest individual airline programme.
Our aviation specialists are thoroughly versed in areas such as government contracts, project planning, logistics, maintenance operations, aircraft construction and military defence systems and our claims team has unrivalled reputation, respect and experience within the industry.
Aon Aviation provides worldwide services in a number of areas. For further information please click here
This press release contains certain statements relating to future results, which are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from either historical or anticipated results, depending on a variety of factors. Potential factors that could impact results include the general economic conditions in different countries around the world, fluctuations in global equity and fixed income markets, exchange rates, rating agency actions, pension funding, ultimate paid claims may be different from actuarial estimates and actuarial estimates may change over time, changes in commercial property and casualty markets and commercial premium rates, the competitive environment, the actual costs of resolution of contingent liabilities and other loss contingencies, the heightened level of potential errors and omissions liability arising from placements of complex policies and sophisticated reinsurance arrangements in an insurance market in which insurer reserves are under pressure, and the timing and resolution of related insurance and reinsurance issues relating to the events of September 11, 2001. Further information concerning the Company and its business, including factors that potentially could materially affect the Company's financial results, are contained in the Company's filings with the Securities and Exchange Commission.
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