Released on: December 3, 2007, 10:39 pm

Press Release Author: Alexandra Lewis

Industry:

Press Release Summary: The aerospace insurance market hardened slightly during 2006,
but results from the final quarter suggest that there may be a softening over the
next year in this traditionally stable market, according to Aon's Aerospace
Insurance Market Review of 2006. Aerospace companies are unlikely to witness the
significant declines in lead premium of 17% enjoyed by airlines. However, they have
still benefitted from the same factors of plentiful capacity and few claims, thus
receiving average increases of just 3%.

Press Release Body: The aerospace insurance market hardened slightly during 2006,
but results from the final quarter suggest that there may be a softening over the
next year in this traditionally stable market, according to Aon's Aerospace
Insurance Market Review of 2006. Aerospace companies are unlikely to witness the
significant declines in lead premium of 17% enjoyed by airlines. However, they have
still benefitted from the same factors of plentiful capacity and few claims, thus
receiving average increases of just 3%.

The key findings of the review are:

* there was a fairly even split in how the insurance markets treated the
regions, with Africa and the Middle East witnessing average increases of around
10%, Europe and the Americas receiving only low single digit increases of around
1-3% and Asia falling in between at 6%;
* the market continues to reward scale, with only operations that buy liability
limits of more than US$2 billion enjoying an average lead premium reduction
during 2006;
* the manufacturing sector, which dominates the aerospace industry, continued to
suffer from the knock on effect of increased US casualty claims in other
sectors. It saw premiums rise by the highest rate among the three industry
sectors (manufacturers 5%, service providers 4% and airports 2%).

Evidence from the last quarter of 2006, when average rate increases began to slow,
suggests that the market will soften for all regions during 2007. This may even
extend into 2008 unless there are significant losses in the aviation industry or a
contraction of capacity as a result of underwriters merging or reducing their
activity in the aerospace market.Corgi
insurance services

Steven Doyle, spokesperson for Aon's aviation team, said: "Although some of the
themes are the same, the aerospace insurance market continues to plot a divergent
course to the airline insurance market. Rather than underwriters imposing blanket
rate increases, they are increasingly making technical risk assessments to judge the
aerospace sectors and individual companies on their own merits. This is improving
the position for businesses across the industry."

Aon UK is ranked by A.M. Best as the number one global insurance brokerage based on
brokerage revenues and voted best insurance intermediary, offering classic car
insurance, high value home insurance, entertainment and media insurance and construction
site insurance.


Web Site:
http://www.commercialservices.aon.co.uk/commercialservices/microsites/construction/


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