Willis says market for airline insurance “favours the buyers”

The airline insurance market has shrunk in premium volume in 2012 as the industry’s positive loss record continues to exert downward pressure on rates, notes a recent report from Willis.

The report, which covers renewals in June and July, states that premium volume in the airline insurance market is down 5% so far this year. At the same time, both hull and liability exposures have increased by single-digit percentages, Willis adds.

The 42 renewals over June and July produced $197.43 million in net premium, a 10% decrease from the same period in 2011. The 93 renewals from January to July netted almost $430 million in net premium.

“Capacity levels remain buoyant and the loss experience continues to be excellent,” Willis states in the report. “Overall market conditions therefore remain stable with the balance of power continuing to favour the buyers.”

“The single-digit growth in exposures, combined with single-digit premium reductions, has been a consistent story for some time now and there will need to be a significant shift in one of the market drivers for any change in market conditions,” the broker adds.