Cost of aerospace industry insurance expected to decline in 2010

The cost of aerospace industry insurance in 2010 is expected to decline for the fourth year in a row, according to Aon’s Aerospace Insurance Markets Outlook 2010 report.
After the marketplace turbulence in 2009, this represents an oasis of relative calm for airports, aerospace manufacturers and support companies, according to an Aon release.
Overall, aerospace lead premium fell by 2% in 2009, as did airport lead premium.
Reduced exposure to risk, including falling passenger numbers, has played a significant role in the recent premium reductions.
“The insurance renewals so far in 2010 indicate that we will see similar trends as [in] 2009, although there is a slight chance that prices could start to rise minimally as the year progresses,” Magnus Allan, an aviation analyst in Aon global aviation group, said in a release.
“Insurance prices are declining as a result of three factors.
“Primarily, capacity continues to be strong in the aerospace insurance market.
“The global economic conditions have also had a significant impact on the aviation industry as a whole, and exposures have declined as aerospace organizations have responded to the new realities.
“Finally, the sector has also been very proactive in its approach to insurance and risk management, as well as introducing a number of new technologies and approaches that have reduced the level of inherent risk,” Allan said.