Ukraine war will present major insurance claims, warns Lloyd’s of London

theguardian.com:

War in Ukraine will present a “major claim” for the insurance market this year, Lloyd’s of London has warned, adding that it was working with governments and regulators to implement complex sanctions on Russia.

Announcing a swing back to an annual profit as it recovers from the pandemic, the insurer said aviation, marine, trade credit and political risk lines of business would be most affected by Vladimir Putin’s invasion.

The firm did not quantify the impact, but said it was “in close dialogue with market partners to understand exposures”. Some of those losses are likely to include unrecoverable aircraft, after Moscow passed laws to impound $10bn (£7.6bn) of jets leased to Aeroflot and other Russian airlines by western organisations.

John Neal, the insurance market’s chief executive, said: “As we announce these results today, our thoughts are first and foremost with the people of Ukraine. In a world buffeted by increasingly complex and connected risks – from the pandemic to a geopolitical conflict – the Lloyd’s market is standing by its customers and supporting their recovery when things go wrong.”

The company added: “We are currently living through a period of heightened risk, not seen or experienced for 75 years. Insurance has a critical role to play.”

However, business underwritten by the Lloyd’s market in Ukraine, Russia and Belarus represents less than 1% of the global total, and it stressed: “Direct and indirect claims are expected to fall within manageable tolerances and will not create solvency challenges.”

As part of sanctions on Moscow following its invasion of Ukraine, Russia’s aerospace and aviation sectors were blocked from accessing insurance through the UK insurance market in early March. This prevents UK-based