He goes on to say that “a small minority” has scaled down aviation underwriting and is waiting for conditions more favorable to carriers, but he adds that the majority are still pursuing market share in a very competitive market.

The results of 2011 over 2010 show average premium fell 3 percent while airline-fleet values grew by 8 percent.

Total lead hull and liability premium was $1.82 billion, a drop from 2010's $1.88 billion.

The final loss figure for 2011, excluding minor losses, is $522 million, a significant reduction from 2010's $1.59 billion. Factoring in minor losses, total loss was $1.13 billion compared to $2.1 billion for the previous year.

Insurance capacity is expected to remain healthy in 2012, the report declares, and that should mitigate any potential upward pressure from losses during the year. However, Aon warns that prices have probably reached their low point “and the remaining uninvolved capacity has a low appetite for current pricing.”

While 2011 was a profitable year for underwriters, when looking over the past five years, aviation has not been kind to insurers. Historically, loss levels have hovered around $2 billion, so insurers have faced a number of years of unprofitable underwriting.

The insurance industry is also dealing with the realities of mergers and acquisitions within the airline industry, as well as airlines going out of business, which reduces the overall premium pool. Aon estimates that around $232 million of lead hull and liability premium has “disappeared from the insurance market during 2011.”

However, the low number of claims and fatalities in 2011 is a positive for carriers in the industry, with claims down 67 percent and total fatalities worldwide at 175, well below the average of 623 over a 15 year period.

“The airline industry will rightly broadcast the very positive 2011 as the result of the high levels of investment in technology, quality and safety and industry standards,” says the Aon report.

Those results, suggests Knechtli, mean most airlines can at least count on something not increasing during 2012.

“Airlines can enjoy their insurance premiums being the one area of fixed costs which remains soft and encouragingly negotiable,” says Knechtli.

However, Peter Schmitz, chief executive officer, Aviation, Aon Risk Solutions, notes, “A single year with phenomenally low level of claims does not mean that the next year will be the same, because the level of risk does not change overnight.”