NU Online News Service, June 10, 4:05 p.m. EDT

Airline insurance pricing is moderating this year, with single-digit increases replacing last year's double-digit hikes, according to insurance broker Aon Corp.

In its monthly report http://aviationinsight.typepad.com/aviation_insight/ on the airline insurance industry, Aon said that lead hull and liability premium rose by 5 percent in May and 8 percent for the year.

However, with only a fraction of the total airline market placed, there is "significant scope for the pattern to change as the year progresses."

Passenger numbers have increased in all regions during the year, Aon said, but the volcano eruption in Iceland has put a damper on those increases, with flight interruptions producing nearly a 3 percent decrease in passenger traffic for April.

So far this year, losses are trending behind last year. There have been $457 million in losses so far this year, compared to $706 million for the same period last year, Aon said.

However, the loss numbers do not include the Air India Express jet that crashed in Dubai in late May, killing 158 people. The aircraft was valued at $50 million.

To date, the loss total for 2010 is close to the long-term 1996-2009 average and is also more than half the level of claims for last year.

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