Plane Talking - May 2011

Executive Summary - Gone with the wind?

Despite the recent history of insurance losses seemingly exceeding premium volumes, premium rates continue to fall in many of the recent airline renewals. The general increase in exposures, both fleet values and forecasted passenger numbers, offer some relief in maintaining premium levels up.

Risk selectivity by underwriters is clearly an embedded feature of today's market, and this seems to be a key component of the rationale supporting 2011 business models. Additional comfort is brought by the relatively benign cost of recent losses however this situation could change instantly.

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