Airline Insurance Claims Drop As Accidents Decline

Airline insurance claims for plane accidents will drop below $1bn this year for the first time since 1991 as passenger fatalities and aircraft destroyed hit record lows, advisory firm Ascend estimates.

Claims for aircraft losses and legal liabilities this year will total about $980m, or $300m less than last year, Ascend said in a report.

The Tide source reported on Sunday, that claims are almost half the $1.8bn in premiums written in the period, it said.

The International Air Transport Association (IATA) said earlier this month that western-built jets suffered 0.19 “hull loss” accidents per million flights this year through November as the industry headed to its safest year on record.

IATA’s figures didn’t reflect the December 25 crash of an Air Bagan Fokker 100 jet in Myanmar in which one person on-board died and the out-of- production aircraft was destroyed.

“Airline fatal accident rates have been steadily improving and, on average, operations are now twice as safe as they were 15 years ago,” head of safety at Ascend, Mr. Paul Hayes, said in a statement. “With such a benign insurance claims year and increasing capacity in the market, we believe that premium income will continue to fall in 2013.”

There is concern premium levels are “too low to be able to maintain the market in the longer term,” Hayes said. Premiums have declined for three years and for 2012 were more than $800m below the 2003 level when they reached $2.7bn, the highest in the last 10 years.

In the first 11 months of this year, North Asian and North American carriers had the lowest accident rates and African carriers had the highest, according to IATA.