Plane Talking -  January 2012

Executive Summary

Little change in the air

It has become increasingly difficult to find matters of note over recent months and 2012 has so far failed to provide signs of change.

It is of course much too early to make any sense of market direction from the handful of renewals completed to date this year.

Nevertheless it is clear that there appears little change in the air.

2011 was a very good year for aviation insurers and whilst it was one of very few classes of business that actually witnessed

further premium rate softening, the good underwriting results surprised most, particularly many insurers' senior management.

One good year hardly makes up for the other less fortunate ones of late, however over the last five years average premium still stays ahead of incurred loss, but not by much. Certainly not by a sufficient margin to cover underwriting costs and provide any return on the capital utilised.

However capacity remains strong, and more than adequate in most segments, signalling a continuation of competitive behaviour between markets and providing the key element necessary to encourage fierce competition between the brokers.

Some insurers appear to be restructuring their operations, some are simply digging in whilst others appear quite upbeat and continue to seek growth in their business.

2012 may well be the year of the Dragon, however will it be able to breathe any fire?

 

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