Plane Talking -  September 2011

Executive Summary

September has seen another quiet month. The few renewals have brought growth by way of anticipated passenger numbers and enlarged fleets and this has helped to generate a meaningful premium increase for these renewals over expiring levels.

However in market terms these renewals are relatively benign, simply helping to maintain year to date premiums at a very similar level to those for the expiring period.

The recent rash of losses has caused an unfortunate number of fatalities, however the aircraft involved have been small or relatively inexpensive equipment, consequently only serving to boost the year to date amount of attritional loss rather than trouble reinsurers or cause any market reaction.

Following from our observations in last month's Plane Talking, perhaps the most notable development comes from the increase in market capacity on offer, with two new entrants open for business. Whilst their underlying rationale to enter this market is unknown, their timing coincides with being available to participate in the final quarter's important renewal season.

Premium rates seem set to continue under pressure for the foreseeable future and although of obvious short-term benefit to the insurance buyers, longevity of the current market conditions should be questioned.

Without something happening outside of our market that causes capacity to be withdrawn, it seems likely that rates will soften further, fuelled by competition but tempered by the need to be seen to "manage the current market cycle".

 

Download this month's edition of Plane Talking  (Adobe PDF 690kb)