The airline insurance market looks set to make its first loss since 2000, with 2007 hull losses likely to outstrip premiums. An Aon insurance forecast based on 85% of 2007’s activity suggests that the total hull and liability premium in the market will be around $1.46bn, but the claims will be at least $1.53bn.

Despite aviation being a catastrophe market, the high level of claims is the result of a fairly consistent level of losses throughout 2007, rather than a single major loss. This deficit has come after a number of years of low global claims frequency, a factor that has attracted a great deal of insurance capacity to the airline markets as global underwriters have looked to diversify their portfolios.

Aon aviation division chairman Doug Peterson reckons a rapid reduction in underwriting capacity is unlikely as a result of one poor year, but i

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