Forecast

All signs indicate that current market trends will soften slightly during the final quarter, with pressure being applied on incumbent leaders by brokers to offer
favourable renewal terms in order to maintain their position. Whilst this may well give the impression that the market is continuing to soften, a number of insurers are seeking to close their premium differentials with the leader. This is most prevalent in circumstances where capacity is restricted. In some instances, a number of insurers are seeking “paid up” terms (i.e. premiums higher than the lead insurer).

Third Quarter Results

The third quarter saw just over 50 airlines with fleets in excess of USD 100 million renew generating just under USD 300 million in premium. Once again the overall premium saw little change with a slight increase of just over 3% with rates falling on average 6.5%. Some of the renewals that had previously had Loss APs on their programmes, saw them reduce or in some cases disappear thereby achieving greater than average premium reductions. On the other hand those presenting losses saw their premium increase.