LONDON, 19 August 2005 – Four airline losses in quick succession have brought to an end a long period of relatively benign loss experience for the aviation insurance market. August has now become the second most expensive month, in terms of losses, for the airline industry since January 2002. But, despite the loss of aircraft hulls valued at over US$170 million, the monthly trend in the cost of losses has continued to fall steadily.
The overall loss profile for 2005 is still within the average for the last three years, both in terms of incidents with a value of loss of over US$50 million and incidents with more than 50 fatalities. Recent years have represented the safest in airline industry history.
Steve Doyle, Aviation and Aerospace Global Practice Manager, Aon UK, said: “It is testament to the work that the industry has carried out over the last decade that the cost of losses is still falling, despite the incidents that have taken place in August. Accidents are inevitable in this business but the safety measures implemented are likely to continue to improve safety across the industry.
“With the airline insurance renewal season approaching, it remains too early to predict if these losses alone will result in changes to the current market environment. They are, however, likely to focus the attention of insurers as the critical fourth quarter approaches,” Doyle added.
Notes to Editors
About Aon
Aon Corporation ( http://www.aon.com ) is a leading provider of risk management services, insurance and reinsurance brokerage, human capital and management consulting, and specialty insurance underwriting. There are 47,000 employees working in Aon's 500 offices in more than 120 countries. Backed by broad resources, industry knowledge and technical expertise, Aon professionals help a wide range of clients develop effective risk management and workforce productivity solutions.
This press release contains certain statements related to future results, or states our intentions, beliefs and expectations or predictions for the future which are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from either historical or anticipated results depending on a variety of factors. Potential factors that could impact results include: general economic conditions in different countries in which we do business around the world, changes in global equity and fixed income markets that could affect the return on invested assets, fluctuations in exchange and interest rates that could influence revenue and expense, rating agency actions that could affect our ability to borrow funds, funding of our various pension plans, changes in the competitive environment, our ability to implement restructuring initiatives and other initiatives intended to yield cost savings, changes in commercial property and casualty markets and commercial premium rates that could impact revenues, changes in revenues and earnings due to the elimination of contingent commissions, other uncertainties surrounding a new compensation model, the impact of investigations brought by state attorneys general, state insurance regulators, federal prosecutors, and federal regulators, the impact of class actions and individual lawsuits including client class actions, securities class actions, derivative actions, and ERISA class actions, the cost of resolution of other contingent liabilities and loss contingencies, and the difference in ultimate paid claims in our underwriting companies from actuarial estimates. Further information concerning the Company and its business, including factors that potentially could materially affect the Company’s financial results, is contained in the Company’s filings with the Securities and Exchange Commission.
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