London - 8 March 2004 - The airline industry saw its lowest levels of losses in history during 2003 resulting in an average reduction of 18% in insurance rates, according to a recent report released by Aon, one of the world's leading insurance broking, risk management and human capital consultants. Terrorism however continues to be an ever-present threat to the fragile aviation sector and the ongoing risk to airlines, airports and civil aircraft is at a higher level than the public may be aware.
Although some insurers stopped providing insurance for airlines in 2003, capacity levels were still sufficient to meet demand. Overall insurance premium volume among the top 182 airlines fell to &dollar 2.65bn however, which is marginally above the widely accepted minimum premium level of &dollar 2.5bn considered necessary to maintain a viable aviation insurance market.
Commenting on the report, Doug Peterson, Chairman of Aon's Aviation division, said: "Despite the reducing levels of premium, the future direction of the aviation insurance market remains uncertain. With the ever-present potential for further losses, insurers pulling out of the market and the growing impact of terrorism, the aviation insurance market is in a precarious position. It is unlikely that insurers will maintain the 2003 premium rate reductions that we saw throughout 2004."
Justin Priestley, a Director within Aon's Counter Terrorism and Political Risk team, added: "The sector continues to represent a very real target for terrorist groups who recognise the globally economic importance of the airline industry. While we have seen insurance premiums for airlines fall, this should not be seen as a reduction in the threat that major airlines face from terrorist networks worldwide."
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 for:
- Airlines
- Aircraft leasing
- Airports and airport services
- Aviation and aerospace products manufacturers
- Aviation workers' compensation
- Fixed-base operations
- Helicopters
- Corporate/industrial aid aircraft
- Major, cargo and regional airlines
- Non-owned liability
- Risk management services
- Satellite and space operations
- Fractional ownership and management companies
About Aon
Aon Corporation (www.aon.com) is one of the world's leading providers of risk management, insurance and reinsurance brokerage, human capital and management consulting, and specialty insurance underwriting. The company has more than 600 offices and 54,000 professionals in 125 countries and sovereignties. Aon's global network, broad resources, industry knowledge and technical expertise helps leaders of businesses, associations, and public entities develop effective solutions to risks, issues and challenges, creating opportunities that generate efficiencies, improve profitability and build value.
Aon is an industry leader in a number of key areas including retail, reinsurance, wholesale and specialty insurance brokerage; captive management; human capital consulting; claims and loss cost management; and premium financing.
Aon Limited is authorised and regulated by the Financial Services Authority in respect of insurance mediation activities only.
Access international media contacts, the full library of Aon media releases, and a media kit with fact sheet and executive bios, via links below.