Airline losses at lowest levels in recent history

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The airline industry saw its lowest loss levels in recent history in 2003. Who kows that better than the insurers.
This lowest loss levels led to an 18% average reduction in insurers rates across the sector, according to a report by broker Aon.
The reduction in rates occurred despite worries over terrorism, which Aon said continues to be an ever-present threat to the sector.
The ongoing risk to airlines, airports and civil aircraft is at a higher level than the public may be aware. Although a number of insurers stopped providing insurance for airlines in 2003, capacity levels were still sufficient to meet demand.
Insurance premium volume among the top 182 airlines fell to $2.65bn, which was marginally above the widely-accepted minimum premium level of $2.5bn considered necessary to maintain a viable aviation insurance market.
With the ever-present potential for further losses, insurers pulling out of the market and the growing impact of terrorism, the aviation insurance market is in a precarious position. It is unlikely that insurers will maintain the 2003 premium rate reductions that we saw, throughout 2004.