Prices will continue to rise after Air France disaster
Aon says airline insurers, a group led by Warren Buffett’s Berkshire Hathaway and Allianz may lose money this year on costs from the Air France crash, forcing the industry to raise prices, Bloomberg reports.
“The airline insurance market is set to endure a third year without profit. As a result, it seems likely that the airline insurance market will continue to harden until well into 2010,” Aon said.
Insurers will collect about $1.9bn in premiums for hull and liability coverage this year, and have incurred $2.26bn in claims so far, Aon said. Claim costs increased 70% from 2008 on the Air France-KLM crash off the coast of Brazil in June and the Colgan Air accident near Buffalo, New York, in February.
Prices for hull and liability protection have increased for about 80% of coverage placed so far in 2009, Aon said. Rates rose 24% during the December renewals from a year earlier.
