At the July 1, 2012, renewal, the major risk sector of the aviation reinsurance market showed a reduction on pricing of 3 percent to 5 percent on a “like for like” exposure basis. Renewals with increased exposure saw pricing in a range of flat to a small increase. The major risk sector includes airline and aerospace covers.
In the general aviation reinsurance sector the outcome of the July 1 renewals varied by individual market performance. International business became more competitive as positive results continued. US business remained as competitive as last year’s July 1 renewal, with rates continuing to fall as the exposure grew and the profitability margin became tighter.
While the reinsurance market remained stable, the direct market continued to see significant rate reductions on all sectors of the aviation portfolio, mainly driven by over-capacity and the absence of significant losses since the middle of 2010.