The airline insurance market is as stable as people can ever remember. Abundant capacity, low loss levels and minimum exposure growth means that it remains a buyers market. We reported all this recently in our latest Airline Market Update.
The next couple of months are very quiet in terms of renewals as the summer lull before the final quarter renewal season starts. Seventy percent of the global airline insurance premium comes to market in the last three months of the year.
There continues to be talk of industry consolidation as the airline business wrestles with the long term global economic challenges. One positive, however, is the safety performance of the industry. This year has continued to demonstrate excellent loss performance, even when compared with the impressive performance of the past few years.
A growing industry with low loss levels! No wonder capital and therefore capacity remains committed to the aviation sector. Something significant will have to change for the balance of power to move away from the buyers in the foreseeable future.
Don’t Fret Over Summer Safety
It is summer holiday time in the northern hemisphere and people are going on planes, perhaps for the only time in the year. Recent and continuing economic conditions mean it might be the first time in a few years.
But do people worry about the safety of their holiday flight?
They shouldn’t. We are now more than three years since the last airline catastrophe hit the global aviation insurance market. Aviation is one of the most highly regulated industries in the world and the focus on safety remains of paramount importance, with initiatives such as the IATA’s Operational Safety Audit continuing to raise the benchmark.
Air travel is the mode of transport that causes by far the lowest number of fatalities per billion kilometres travelled.
It is not just about a comparison with other modes of transport however. It is also true that there are fewer accidents occurring than they did in the past. According to IATA during 2011 the industry Western-built jet hull loss rate was just 0.37 per million flights which represents a 61% improvement in the accident rate over the last 10 years.
The global airline fleet is younger and more technologically advanced than ever, one benefit of the global economic downturn and the high cost of fuel (which makes it more economical to run newer, fuel efficient planes)!
So sit back, relax and enjoy the film.