Airline hull and liability premiums have risen by an average of 7% between January and July this year, according to a new report by Aon.

Losses are well above average for the six months with claims totalling $US996 million ($1.04 billion) compared to a long-term average of $US612 million ($640 million).

The Aon Airline Insurance Market Indicators report finds more than 60% of airlines have seen an increase in premiums at renewal, but this compares to 80% paying higher premiums last year.

Aon Risk solutions aviation leader Simon Knechtli says this indicates the cost of airline insurance is stabilising, possibly even falling after 11 straight quarters of increases.

“Underwriters are competing for their desired market share, and the strength of this competition has blunted the aspiration for higher prices as shown by the statistics in this report,” he said.

“We expect this to continue for the remainder of 2010, with further capacity entering the market in October and little evidence at this stage of anyone leaving.”

The report says the price of insurance now appears to be moving up or down based on the underwriters’ perception of risk.

However, the economic situation is having an impact on the market with airlines going out of business.

This year has seen about $US16 million ($16.7 million) of premiums come out of the market due to airlines going bust, joining group schemes or their average fleet value dropping below $US150 million ($156 million), the benchmark for the report.

Africa led the losses with $US359 million ($375 million) of claims in the reporting period.

This compares to the long-term average loss for the region of $US52 million ($54 million).

In Asia, claims are heading upwards with $US225 million ($235 million) compared to the 15-year claims average of $US269 million ($281 million).

Aon notes any further major incidents in the region could have an impact on premiums in 2011.