Flight MH17: Aviation insurance rate likely to increase following crash, experts warn

The cost of insuring aircraft is set to rise following the latest Malaysia Airlines disaster, experts have warned.

A total of 298 people, including 10 Britons, were killed when the Malaysian Airlines flight MH17 travelling from Amsterdam to Kuala Lumpur was struck by a surface-to-air missile on Thursday.

Catherine Thomas, director of analytics at A.M. Best, claimed that the series of incidents will cause a sharp increase in aviation insurance rates.

“Three consecutive large losses this year, the disappearance of the Malaysia Airlines flight MH370, hull losses due to fighting at Tripoli airport and the downing of Malaysia Airlines flight MH17, should now halt the decline in aviation rates.”

Her comments were echoed by Andrew Horton, boss of insurer Beazley, who said aviation was likely to be one of the few lines of insurance that rises in price this year as excess capital across the market keeps down prices.

Lloyd’s of London insurer Beazley saw its pre-tax profits rise 61% to $61.4 million (£35.9 million) during the six months ending June 30 as it benefited from improved investment returns and fewer natural catastrophes.

The company made an investment return of $46.8 million in the period, compared to £300,000, and raised its interim dividend 7% to 3.1p.

Horton added: “Beazley performed well in the first half of the year, in a market that has become steadily more challenging.

"As we celebrate the tenth anniversary of our US operations, it is encouraging that we are currently seeing many of our best growth opportunities from our US based underwriters.

"At the same time we continue to attract talented underwriters to join Beazley on both sides of the Atlantic.”