LONDON, Nov. 11, 2013 (GLOBE NEWSWIRE) -- 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 U.S. and China, come to market between now and the end of the year.
"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 market."
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 "attritional losses."
"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.