Downward Pressure on Airline Insurance Premiums Expected to Increase: Willis
London, UK, November 11, 2013 - Abundant capacity, high levels of competition, limited loss activity and an
aggressive broking community will benefit airline insurance buyers renewing in the final quarter of 2013, according
to the Q3 Issue of Airline Insight, from Willis Group Holdings (NYSE: WSH), the global
risk adviser, insurance and reinsurance broker.
Consolidation in the airline industry together with the migration of renewal dates to later in the year
has created a concentration of renewal activity in the final six weeks of 2013. The sheer
volume of renewals and competition at this time of year means that buyers are likely to
achieve significant premium reductions.
As well as a sharp rise in the number of programmes renewing in the final quarter, the
overall size of programmes has increased. In this respect, a number of the largest airline programmes,
both in the US and China, come to market between now and the end of the
"Insurers' desire to participate on the world's blue chip airlines will continue to keep competition in this
area high," said Phil Smaje, CEO of Willis Aerospace. "The consolidation that has taken place in
recent years has created a smaller number of very large programmes of significant interest to the
Another factor expected to accelerate the slide in premiums is the industry's safety record which, despite some
losses, remains very good.
Total hull losses in the airline industry to October amounted to approximately US$615 million. Meanwhile, liability losses
in the same period were of the order of US$226 million. Willis estimates that overall insurance
losses in the airline sector in 2013 will be US$1.2 billion, including a pro-rata estimate of
"Despite many believing the market couldn't go any lower than it has in recent years, the low
loss levels, plentiful capacity and growth in exposures will continue to provide ideal conditions for buyers
and challenges for underwriters," said Smaje.
Willis Group Holdings plc is a leading global risk advisor, insurance and reinsurance broker. With roots dating
to 1828, Willis operates today on every continent with more than 17,000 employees in over 400
offices. Willis offers its clients superior expertise, teamwork, innovation and market-leading products and professional services in
risk management and transfer. Our experts rank among the world's leading authorities on
analytics, modelling and mitigation strategies at the intersection of global commerce and extreme events. Find more information
at our website, www.willis.com , our leadership journal, Resilience, or our up-to-the-minute blog on
breaking news, WillisWire. Across geographies, industries and specialisms, Willis provides its local and multinational clients
with resilience for a risky world.