Airline insurers: worst month since 9/11 attacks

Airline insurers in June likely posted their biggest monthly loss since the Sept. 11, attacks, and may need to raise prices for the rest of the year to help cover losses, according to a report from Aon Corp, the world’s largest insurance broker.
Aon said in a statement, last month’s crashes of an Air France jet in the Atlantic Ocean and a Yemeni jet in the Indian Ocean will likely add pressure on insurers to raise prices, which were already increasing, Reuter`s reports.
Overall claims for the year could exceed $2.2 billion, which is 57 % above the “long-term” average of $1.4 billion, Aon said.
“If the rest of 2009 follows the 13-year average pattern for losses, and discounting 2001, the year will be the most expensive ever seen in the airline insurance market,” it said.
“The industry is likely to see insurance premiums rise significantly for the rest of the year and potentially into the next,” it added. “This will be a bitter pill to swallow for an industry that is already seeing passenger numbers fall as a result of the global economic downturn as well as fuel prices that are climbing once again.”
The June 1 crash of the Air France jet killed 228 people, while the June 30 crash of the Yemenia Airbus jet likely killed 152 passengers and crew.
Axa SA was the lead insurer on the Air France jet, which according to reports was also covered in part by insurers Allianz and American International Group Inc.