JLT beats rivals to partner Willis on Lufthansa deal

Jardine Lloyd Thompson (JLT) has strengthened its position in the aviation market after winning a tender to co-broker insurance for Lufthansa, the largest airline in Europe by passenger and fleet numbers.

Several of the top London market brokers were chasing the deal, but JLT came out on top to partner Willis on the insurance and risk management set-up with the airline.

Aon, which was acting in a minor advisory capacity with Lufthansa’s in-house insurance specialists, is no longer part of the set-up.

Willis was not involved in negotiations because its place was always secure as the lead broker, and it will have separate arrangements on the account to JLT.

The JLT Aerospace triumph comes only a few years after it poached Aon’s elite aviation team. In 2009, Aon Ltd deputy chairman Jonathan Palmer-Brown left for JLT.

He was later followed by several Aon aviation executives, including deputy chairman Bill Smith, executive director John Cruise and team leader Steve Turner. Aviation producers Andy Swan and Greg Boothright also joined.

Willis, Aon and JLT declined to comment.

JLT’s strategy of recruiting top talent and concentrating on its core specialisms is paying off. The broker, 40% owned by Asian conglomerate Jardine Mattheson, has led its rivals on organic growth for two years.

Despite JLT’s big contract win, the aviation sector continues to shrink as rates fall against the backdrop of a low claims environment.

According to a recent aviation market report by Willis, hull and liability premium volume fell 5.1% across the sector since January, continuing the downward market trend, while exposures continued to increase by single digit percentages.

So far this year, $141m (£89m) of hull losses and no major liability losses have been reported, with the last major catastrophe being the Air France loss in June 2009.

Willis Aerospace sales and business development director Steve Doyle said: “The recent level of stability in the market is unprecedented in comparison with the historical cyclical nature of the aviation sector, and therefore without a change in market capacity levels or a run of major losses we look set for a continued reduction in premium volumes until the end of the year and into 2013.”