Insurers reviewing premiums as 2014 is forecast to be worst year for accidents in a decade

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By admin July 28, 2014 11:41

Insurers reviewing premiums as 2014 is forecast to be worst year for accidents in a decade

Airline insurers are reviewing cover for aircraft involved in hostile acts as the industry faces its most expensive year since the 9/11 attacks in 2001, with annual losses set to pass $2bn.

Senior insurance brokers have warned that some underwriters are demanding more than threefold increases in premiums for so-called “war” insurance policies.

In response to the perception of higher risk, insurance companies are requesting details of flight paths and are considering withdrawing completely from providing certain types of cover for flights over conflict zones in the Middle East and parts of Africa.

Ongoing conflict in Libya and Israel, together with four fatal accidents in the first half of 2014, have caused aviation war insurers such as the Lloyd’s of London market to face an annual bill this year of several times their premium income, which totals only about $60m.

Airlines are vulnerable to abrupt changes in the policy terms of war insurance, which covers physical damage to aircraft from hostile acts. Such policies can be cancelled with just seven days’ notice. Brokers expect both liability claims and hull losses to run into several hundred million dollars during 2014.

admin
By admin July 28, 2014 11:41