We now find ourselves well into the fourth quarter, our sector’s main renewal season. Looking at the results seen in October and from the early results of some of the future November and December inceptions we see little signs of a change in market conditions and downwards direction of premium and rates that we have witnessed for some time now.
On the whole we have experienced a fairly consistent pricing environment throughout the year, which is in stark contrast to 2014. For this reason as we approach year end many will be looking ahead to 2016 with far less apprehension than they had the same time last year. Overall the pattern of growth in exposures continues, combined rate reductions for the year as a whole are currently running at around -15%, with premiums, on a like for like basis, down around -8.5% over the previous year.
On the market capacity front there remains little new news to comment on, with recent headlines of consolidation remaining a key talking point. As our lead lines contributor highlights “Aviation insurance is only a very small segment of a much larger industry in which the amount of available capacity is unlikely to reduce in the near future given the abundance of capital. Strategies are established at a global level and this niche market cannot operate as if it is alone in the world”.
In terms of losses, the market experienced a busy month in October, witnessing a handful of claims, the most recent of which was MetroJet and involved a significant number of fatalities. Whilst this loss will be of substantial value, it will be far smaller in comparison to the value of some of last year’s major claims and so ultimately on it’s own it will have little impact on market conditions. That said this loss has once again reignited much debate on the subject of aviation safety, particularly for airlines operating in or passing through conflict zones. The outcome of the investigation in to this loss will be closely monitored by all.
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For further information please contact Richard Adams, Partner, Aerospace on +44 (0)20 7466 5220 or email us firstname.lastname@example.org