Airline insurers turned profits at the end of last year despite cutting prices to meet premium targets, according to Aon Risk Solutions.

Major losses in the airline industry were down 40% on 2011 and estimated claims dropped almost 20%, the company’s Airline Insurance Market Outlook says.

Total lead hull and liability premium was $US1.6 billion ($1.65 billion) last year, while total incurred claims were $US324 million ($335 million).

The figures reflect a market in which average fleet values grew 5% and passenger numbers were up 4%, Aon says.

“The number of incidents last year was 39, compared with 70 on average, while total insurable fatalities were 318, compared with a long-term average of 597.”

The number of airline incidents in the Asia-Pacific region was 14, compared with a 10-year average of 18.

Claims were $US121 million ($125.3 million), down on the $US289 million ($299 million) 10-year average, and there were 152 fatalities in the region, compared with the long-term average of 195.

Asia-Pacific premiums were $US454.9 million ($471 million), down 10% on 2011, but the average fleet value was $US288.6 billion ($298.8 billion), up 9% on the previous year.

Total renewals fell to 56 from 57. The average liability limit for Asia-Pacific airlines was $US1.3 billion ($1.34 billion), up 2% on 2011.

“The Asia-Pacific region is expected to continue its growth path with [low] loss records, other than one or two hotspots,” the report says.

“It will still be one of the cheapest regions in which to buy airline insurance.”