Insurance rates jump for Ukraine war-exposed business
According to industry sources, insurance rates are doubling or more for several aviation and marine businesses that are particularly vulnerable to the conflict in Ukraine, driving up expenses for airlines and shipping companies.
According to insurance broker Marsh, global commercial insurance premiums jumped 11% on average in the first quarter, with the war exerting upward pressure on rates.
However, the overall statistic hides more pronounced movements in some sectors, and it only covers the first five weeks after the invasion.
War is usually not covered by standard insurance policies. Customers can purchase additional war cover on top of it.
As a result of the fighting, aviation war insurance is no longer available for Ukraine, Russia, and Belarus, according to Garrett Hanrahan, global head of aviation at Marsh.
Aviation war protection has quadrupled in the rest of the world, as insurers try to recuperate some of their losses, he said.
According to S&P Global, the fight, which Russia refers to as a "special military operation," could result in insurance losses of $16 billion to $35 billion in "specialty" insurance classes such as aviation, maritime, trade credit, political risk, and cyber.
According to S&P Global, aviation insurance claims might top $15 billion, with hundreds of leased planes delayed in Russia due to western sanctions and Russian countermeasures.
Recent insurance rate increases, according to one aircraft lessor, have been "not a pleasant sight."
One underwriter claimed that some aircraft lessors - a particularly vulnerable segment of the market because their planes are delayed in Russia – were now paying 10 times their original premium, while another claimed that insurers could "name their price" to lessors.
When a ship enters extremely risky waters, policyholders must pay an additional "breach" premium, which is updated by the Lloyd's market.
According to three insurance sources, this has grown many times in the area around Russian and Ukrainian waters in the Black Sea and Sea of Avov, to roughly 5% of the ship's value, up from 0.025 percent before the invasion, equating to millions of dollars for a seven-day coverage.
Every time a ship enters specified seas, it must pay an additional fee.
According to two sources, rates for ships entering other Russian waterways have increased by at least 50% since the Lloyd's market designated all Russian ports as high risk.
Some marine insurers have also ceased providing coverage for the region due to the dangers.
According to insurance broker Marsh, global commercial insurance premiums jumped 11% on average in the first quarter, with the war exerting upward pressure on rates.
However, the overall statistic hides more pronounced movements in some sectors, and it only covers the first five weeks after the invasion.
War is usually not covered by standard insurance policies. Customers can purchase additional war cover on top of it.
As a result of the fighting, aviation war insurance is no longer available for Ukraine, Russia, and Belarus, according to Garrett Hanrahan, global head of aviation at Marsh.
Aviation war protection has quadrupled in the rest of the world, as insurers try to recuperate some of their losses, he said.
According to S&P Global, the fight, which Russia refers to as a "special military operation," could result in insurance losses of $16 billion to $35 billion in "specialty" insurance classes such as aviation, maritime, trade credit, political risk, and cyber.
According to S&P Global, aviation insurance claims might top $15 billion, with hundreds of leased planes delayed in Russia due to western sanctions and Russian countermeasures.
Recent insurance rate increases, according to one aircraft lessor, have been "not a pleasant sight."
One underwriter claimed that some aircraft lessors - a particularly vulnerable segment of the market because their planes are delayed in Russia – were now paying 10 times their original premium, while another claimed that insurers could "name their price" to lessors.
When a ship enters extremely risky waters, policyholders must pay an additional "breach" premium, which is updated by the Lloyd's market.
According to three insurance sources, this has grown many times in the area around Russian and Ukrainian waters in the Black Sea and Sea of Avov, to roughly 5% of the ship's value, up from 0.025 percent before the invasion, equating to millions of dollars for a seven-day coverage.
Every time a ship enters specified seas, it must pay an additional fee.
According to two sources, rates for ships entering other Russian waterways have increased by at least 50% since the Lloyd's market designated all Russian ports as high risk.
Some marine insurers have also ceased providing coverage for the region due to the dangers.
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