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Aviation insurers report profits as safety reaches all-time high

January 30, 2012, 10:24 am

Because aviation-related fatalities fell in 2011 to the lowest levels since 1984, aviation insurers are experiencing significant profits due to decreased claims. Aon Corporation recently reported that aviation insurers collected around $1.8 billion in renewal premiums in 2011 and incurred an estimated $1.13 billion in claims.

After the 2009 Air France crash and engine failure on an Airbus A380 in 2010, aviation insurers suffered significant underwriting losses. Flying since these epic crashes, however, has been twice as safe as it was 15 years ago, Ascend reported. In 2011, the worst crash happened in July when 83 people died from a crash landing in Congo, Bloomberg reported.

Aon reported there were 175 fatalities in the first 11 months of 2011, compared with an average of 582. Not all of these crashes were covered with aviation or pilot insurance. Prices for insurance dropped 3 percent in 2011, as the low level of claims increased capacity and put pressure on rates. In 2012, industry experts predict premiums will remain the same or slightly decline for airlines and pilots.

"A single major incident could harden the market quickly, however, particularly given the high level of claims prior to 2011," Aon's report stated.

Despite the increase in safety and decline in fatalities, it is still important for pilots to invest in pilot insurance to safeguard against the unexpected.

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