Environmental pollution insurance knocks computer crime insurance into second place according to Aon’s airline risk management survey
Aon's airline risk management survey questioned over 45 of the world's leading airlines on how risk management evolved during 2006.
The results include:
??environmental pollution is the risk that most organisations expect to purchase a policy for over the next three years, rising from sixth in the 2005/6 survey and reflecting the current focus on corporate responsibility. The change knocked computer crime insurance into second place, while business interruption climbed to third;
??aircraft accident, aircraft-related war/terrorism and property (damage) remain the three highest risk management priorities;
??premium costs remain the key insurance industry issue for the majority of respondents, while transparency has fallen in importance below financial strength and claims services;
??the average length of risk strategies has decreased to 2.5 years from the 3.3 years reported in the 2005/6 survey. This reflects the rapid evolution of the industry and the need for flexibility to take advantage of future opportunities;
??reflecting the larger organisations that responded this year, operations with company-wide risk management strategies rose from 67% in 2005/6 to 86% in 2006/7;
??risk management budgets fell to 1.6% of total revenue in the 2006/7 survey from 2.1% in 2005/6, reflecting the soft market conditions in the airline insurance markets.
Steven Doyle, spokesperson for Aon's aviation team commented: "This is a fascinating snapshot of how airlines' perception of risk is changing year on year. The survey shows how issues such as the environmental debate and fears about cyber-crime impact the aviation industry and its insurance markets. It also highlights how the significant reductions in average lead hull and liability premium since September 2006 are translating onto organisations' bottom lines. There is a wealth of information here that the insurance industry can use to ensure its products are closely aligned to airlines' risk requirements."
