Most airlines saw rate reductions during recent aviation insurance renewals, according to a report published Monday by London-based brokerage Willis Group Holdings P.L.C.
“Market conditions are being described by some as the 'softest for a generation,'” said Phil Smaje, CEO of Willis Aerospace in London in a statement accompanying the report.
For 2013, overall premium volume for insurance for airlines is likely to be less than $1.5 billion, a more than $150 million drop from 2012 and the lowest level since the Sept. 11, 2001, terrorist attacks in the United States, according to the report.
In the report, “Airline Insight,” Willis said increased competition, growth in exposures and low loss levels are among factors that led to rate reductions in the fourth quarter of 2013, when most airlines renew their coverage. The inclusion of the majority of this increased exposure by underwriters for the same premium demonstrates the benefit of current market conditions for buyers, said Mr. Smaje.
“The continued appetite for, and in some cases increased, participation by insurers has fueled significant reductions,” Mr. Smaje said.