Premium, rate reductions shrink in aviation insurance
Premium and/or rate reductions have slowed and in some cases are no longer obtainable in the aviation market, according to the May 2017 JLT aviation newsletter ‘Plane Talking’.
Underwriters appear to be holding a firmer position than in recent years and this is moderating renewal results, according to the authors.
Experts have been expecting a tougher environment in 2017 in the aviation sector and a shift of market conditions in favour of the underwriter. The early indications of change witnessed at the end of 2016 appear to have had some weight and the market has certainly hardened to some degree, although perhaps not as much as some would have hoped or feared, according to the newsletter.
Whilst ‘Tier A’ carriers are still most likely to receive the better renewal results it would appear that the high double-digit reductions that were once considered normal for these risks are now few and far between. This in turn has filtered through to ‘Tiers B and C’ and these renewals are now also experiencing tougher pressure and subsequently less favourable results than they might have expected 12-24 months ago, according to JLT.
Airlines are renewing cover with increased aircraft numbers and average fleet values as well as forecast growth in passenger/departure numbers for the new policy period. The available level of competitive capacity remains fairly stable albeit variable dependent on the risk/price in question, according to the newsletter.
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