Aviation insurers report profits
May 7, 2012, 09:46 am
The annual Willis Group Holdings Aviation Products Market Review for 2012 found that aviation insurers and providers of pilot insurance coverage reported profits in 2011, due to relatively low losses of aircrafts and passenger fatalities. 2011 marked the first time in five years that the aviation and aviation manufacturing insurance industries were able to turn a profit, likely due to increased security regulation and next generation technology boosting safety in air travel.
The report revealed the total airline insurance premium in 2011 was $1.9 billion against claims of $1.1 billion. Premiums for aviation insurance manufacturing insurance in 2011 was $657.9 million.
Of western-built aircrafts, 30 total losses were reported in 2011, down from 46 in 2010. Despite overall passenger levels increasing by 5 percent between 2010 and 2011, just 184 passenger fatalities occurred last year, down significantly from 648 in 2010. The five year average fatality rate per one million passengers dropped below 0.2 percent for the year, while premium rates in 2011 increased 1.8 percent from 2010 levels.
Mark Wilford, chairman of Willis Aerospace, said new technology and regulations are helping return the aviation industry back to good health. Innovative tools and advancements are delivering improved long-term safety records while passenger numbers continue to grow.
Insurance renewals across all aerospace sectors averaged a 1.8 percent rate reduction year-over-year, while total airline insurance premiums held strong throughout one of the safest years in aviation history.
In 2011, just one loss was in excess of $100 million, and 14 other losses ranged between $10 million and $99 million. In 2010, there were 6 losses in excess of $100 million, and 14 losses between $10 million and $99 million. Total fatalities including crew was reported at 230 people, compared to 715 fatalities including crew in 2010, the highest year for fatalities since 2007.
For the year, the total number of western-built aircrafts delivered increased 3.48 percent from 2010 to reach 4,222. Airline-passenger-jet deliveries also grew by 6 percent to 1,104 units in 2011. Total projected sales increased slightly to $40.9 billion in 2011, mostly driven by an aviation boom in the Asia-Pacific market.
Asian economies led the rebound of the aviation industry in 2011. The region has the largest passenger growth rate and highest number of new aircraft deliveries worldwide.
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