aia in london 2022 could now produce an interesting dynamic. With exposures now consistently growing, claims will inevitably follow both attritional and large. Pre covid airline claims were tracking at $1.4bn, however, premium levels are only at $1.7bn and that is only possible if airlines actually fly as much as they are projecting, as such, airline underwriters are now effectively hoping that either claims don’t return to previous levels or exposures grow more than expected. It looks like the airline segment will again struggle to get to a sustainable and profitable level and any further pressure on rates in 2022 will mean an even more challenging future for the market.
fiff
The danger signs are there as capacity whether existing or new will need income. This requirement for premium will effectively mean that in order not to put pressure on rates underwriters will need to exercise discipline that has not been evident in previous cycles. As is always the case, the potential for profitability remains in the hands of underwriters. Clients will always want the most competitive premium with reliable markets, it is the brokers function to get this for them. If underwriters put premium growth before profit then the inevitability of a soft market will materialise.
20