Economic news

Insurance rates jump for Ukraine war-exposed business, sources say

2022.05.30 15:20

Insurance rates jump for Ukraine war-exposed business, sources say
FILE PHOTO: Planes of Aeroflot and Rossiya Airlines are seen parked at Sheremetyevo International Airport, as the spread of the coronavirus disease (COVID-19) continues, outside Moscow, Russia April 8, 2020 REUTERS/Tatyana Makeyeva/File Photo

LONDON (Reuters) – Insurance premiums are doubling or more for some aviation and marine business particularly exposed to the war in Ukraine, increasing costs for airline and shipping firms, industry sources say.

Global commercial insurance premiums rose 11% on average in the first quarter, according to insurance broker Marsh, which said the war was putting upward pressure on rates.

But the overall figure masks sharper moves in some sectors, and only covers the first five weeks following the invasion.

War is typically excluded from mainstream insurance policies. Customers buy extra war cover on top.

Garrett Hanrahan, global head of aviation at Marsh, said aviation war insurance was no longer available for Ukraine, Russia and Belarus as a result of the conflict.

For the rest of the world, aviation war cover has doubled, as insurers try to recoup some of their losses, he said.

“The hull war market is beginning to reflate itself through rate rises.”

The conflict, which Russia calls a “special military operation”, could lead to insurance losses of $16 billion-$35 billion in so-called “specialty” insurance classes such as aviation, marine, trade credit, political risk and cyber, S&P Global (NYSE:SPGI) said in a report.

Aviation insurance claims alone could total $15 billion, S&P Global said, with hundreds of leased planes stranded in Russia as a result of western sanctions and Russian countermeasures.

One aircraft lessor described recent rate increases on its insurance as “not a pretty sight”.

Some aircraft lessors – a particularly exposed sector of the market because their planes are stuck in Russia – were now having to pay 10 times their original premium, one underwriter said, while another said insurers could “name their price” to lessors.

In ship insurance, policyholders pay an additional “breach” premium when a ship enters particularly dangerous waters, locations which are updated by the Lloyd’s market.

For the area around Russian and Ukrainian waters in the Black Sea and Sea of Avov, this has increased multiple times, three insurance sources said, to around 5% of the value of the ship, from 0.025% before the invasion, amounting to millions of dollars for a seven-day policy.

Each time a ship goes into those waters, it has to pay that extra premium.

Rates for ships going into other Russian waters have also risen by at least 50% after the Lloyd’s market classified all Russian ports as high risk, two of the sources said.

Because of the dangers, some marine insurers have also stopped providing cover for the region.

Source

Related Articles

Leave a Reply

Back to top button
bitcoin
Bitcoin (BTC) $ 98,320.34 0.28%
ethereum
Ethereum (ETH) $ 3,419.43 2.26%
tether
Tether (USDT) $ 1.00 0.01%
solana
Solana (SOL) $ 255.99 1.26%
bnb
BNB (BNB) $ 668.22 1.65%
xrp
XRP (XRP) $ 1.47 5.39%
dogecoin
Dogecoin (DOGE) $ 0.436837 4.92%
usd-coin
USDC (USDC) $ 0.999883 0.04%
cardano
Cardano (ADA) $ 1.07 2.21%
staked-ether
Lido Staked Ether (STETH) $ 3,419.56 2.26%
tron
TRON (TRX) $ 0.216012 3.12%
avalanche-2
Avalanche (AVAX) $ 42.25 2.19%
stellar
Stellar (XLM) $ 0.578635 33.47%
the-open-network
Toncoin (TON) $ 6.43 14.82%
shiba-inu
Shiba Inu (SHIB) $ 0.000027 0.19%
wrapped-steth
Wrapped stETH (WSTETH) $ 4,053.90 2.38%
wrapped-bitcoin
Wrapped Bitcoin (WBTC) $ 97,892.23 0.53%
polkadot
Polkadot (DOT) $ 9.01 19.41%
chainlink
Chainlink (LINK) $ 17.71 4.70%
bitcoin-cash
Bitcoin Cash (BCH) $ 512.74 3.84%
weth
WETH (WETH) $ 3,422.30 2.31%
sui
Sui (SUI) $ 3.46 4.64%
pepe
Pepe (PEPE) $ 0.000021 2.82%
near
NEAR Protocol (NEAR) $ 6.67 6.21%
leo-token
LEO Token (LEO) $ 8.67 1.32%
litecoin
Litecoin (LTC) $ 101.82 0.28%
aptos
Aptos (APT) $ 12.90 2.19%
uniswap
Uniswap (UNI) $ 11.06 5.64%
wrapped-eeth
Wrapped eETH (WEETH) $ 3,600.48 2.31%
hedera-hashgraph
Hedera (HBAR) $ 0.151392 0.71%
internet-computer
Internet Computer (ICP) $ 11.61 5.49%
crypto-com-chain
Cronos (CRO) $ 0.198099 3.32%
usds
USDS (USDS) $ 1.00 0.36%
polygon-ecosystem-token
POL (ex-MATIC) (POL) $ 0.579692 7.60%
ethereum-classic
Ethereum Classic (ETC) $ 30.21 3.16%
render-token
Render (RENDER) $ 7.97 1.16%
fetch-ai
Artificial Superintelligence Alliance (FET) $ 1.52 14.90%
bittensor
Bittensor (TAO) $ 539.70 1.96%
kaspa
Kaspa (KAS) $ 0.154589 2.73%
ethena-usde
Ethena USDe (USDE) $ 1.00 0.07%
arbitrum
Arbitrum (ARB) $ 0.880492 6.41%
whitebit
WhiteBIT Coin (WBT) $ 24.73 0.49%
bonk
Bonk (BONK) $ 0.000047 5.02%
filecoin
Filecoin (FIL) $ 5.90 15.19%
cosmos
Cosmos Hub (ATOM) $ 9.04 13.93%
vechain
VeChain (VET) $ 0.043378 0.62%
dai
Dai (DAI) $ 0.999841 0.07%
mantra-dao
MANTRA (OM) $ 3.78 0.43%
dogwifcoin
dogwifhat (WIF) $ 3.29 2.77%
okb
OKB (OKB) $ 54.13 9.88%