Insurance premiums for commercial airlines are on the rise, with October aviation renewals increasing about 30% compared to last year.

According to a report by the Willis Group, the renewals figure has been distorted by three airlines – Arik Air, Lion Air and Libyan African Holdings – renewing with dramatically higher fleet values, which are used to calculate the total premium.

If the three renewals are excluded, the average premium increased about 17% from last year, the average for the preceding months of 2009.

“Although insurers are still succeeding in forcing through large increases in premium when compared to the levels of 2008, the level of percentage increase in premium is not rising significantly,” the Willis report says.

“It will not be until later in November when some of the world’s largest programs (including Singapore Airlines and the Gulf Co-operation Council) have renewed that we will see how the market will treat the large flag carrier programs.”

Willis says there have been 127 renewals this year, generating $US637 million ($699 million) in premium, an increase of 17%.

Passenger numbers for the renewals total 666 million, down 6%. This level of reduction is likely to increase as the larger programs renew and the effects of the global economic downturn are seen in projected passenger numbers at renewal, the Willis report says.