Lloyd’s: Russia-Ukraine conflict a ‘major loss’

The ongoing conflict between Russia and Ukraine will inevitably result in “major losses” to the market in 2022 that could take years to settle, according to Lloyd’s of London’s chief executive John Neal.

“It will be a major event, there is no doubt that there will be losses that materialise from the war in Ukraine and it will take quite a long time to evaluate what those might be,” he said in a press briefing, attending by sister publication Insurance Times. 

Neal explained that there is also likely to be a lengthy litigation period for aviation claims.

He continued:

“Sadly, when you find yourself in new uncharted territory you end up with degrees of complexity, so there will be a significant debate over what is insured, what isn’t insured.

”There will be debates over the notes of cancellation – when they were issued and not issued and so some of these settlements ending up in court, to me, feels inevitable.

“We are of a mindset of trying to deal with and pay for claims but if you think of the complexity of war and associated implications, some of that is going to find its way to the courts – it will be years.”

Market in crisis management mode

Lloyd’s of London has assembled a committee to help mitigate risks that have arisen from the ongoing conflict, revealed Neal.

“When you find yourself in a crisis you need to have a crisis management capability, which is what we did for Covid.

“Sanctions has been huge in terms of the effort we have gone through - [it is] a 24/7 job at the moment understanding what the UK government, the European Union [and] the US wants to do. Are they in lockstep? Are they not? What are the implications of imposing sanctions?

”We had to look at the balance sheet and the impact on investment strategy and we equally need to look at the operational matters - are there indirect operational activities that have a dependency on Russia, Ukraine [or] Belarus?” he added.