Aerospace rates falling
Mirroring the aviation sector, an excess of capacity together with low losses are driving premium rates downwards, according to Aon’s Aerospace Insurance Market Review.
But the broker said the average 6 percent reduction in rates was not as significant as the general fall witnessed in airline insurance market rates.
Service providers led the way with an average 11 percent reduction followed by airports with 8 percent and manufacturers with 3 percent.
Aon said that the number and value of claims has been limited in the aviation sector generally, although the high level of airline hull losses in 2007 may translate into an increased number of claims on the aerospace market as accident investigators assign responsibility for crashes.
“The aerospace insurance market saw modest reductions in the price of lead premium throughout 2007, but there were differences in the way that the different sectors within the market were treated,” said Doug Peterson, Aon Aviation & Aerospace group practice leader.
He continued: “This suggests that the markets are pricing insurance programmes according to their actual level of risk, rather than simply applying an industry average year-on-year price change”.