Generally in 2009, industrial aid and commercial aircraft risks continued to see insurance rate reductions based on the low number of claims and insurance market competition. Although insurers sought to accelerate premium increases following the Air France loss on June 1, 2009, carriers saw a relaxation in their goal of 20 percent rate increases as market competition took over.

While insurers generally have not taken an underwriting loss on aircraft products liability insurance in recent years, the pressure on insurers to increase overall aviation premium has intensified, given the substantial airline losses that occurred in 2009.

Looking Ahead
It is likely that the pressure to increase premiums will intensify further on insurers of all classes of aviation business in 2010. Barring further significant losses or other factors affecting the aircraft products liability insurance market, it is likely that insurers will attempt to raise manufacturers’ renewal premiums in the 2.5 percent to 7.5 percent range.