Insurance news – week commencing 13/03/22

week commencing 13/03/22:

Sanctions of all sorts has been the news agenda this week with losses predicted and fines levied, but at least the 2021 results are looking positive.

Aviation market’s issues take off

A new law will allow Russian airlines to re-register and retain leased aircraft. The value of foreign aircraft affected by the these rules is estimated to be $500m, adding to the market’s fears of costly claims litigation in the coming years. External-link [Insurance Insider] Managing director of the Russell Group, Suki Basi, described the situation as a ‘nightmare’, and said that the impact on the aviation market would be comparable to 9/11. External-link [The Insurer] However, in his evidence to the Lords inquiry into London market regulation, Lloyd’s chief risk officer David Sansom said that the aviation market’s Russian exposures were within comfort levels, but warned of knock-on effects for other lines of business. External-link [Law360]. More generally insurers are struggling to assess what the maximum extent of their losses could be from the invasion of Ukraine. Possible future legal fights over pay-outs, and a lack of data on the extent of the damage, is obscuring the picture. External-link [Financial Times]

Atrium fined by Lloyd’s

Atrium Underwriters Ltd has accepted a £1m fine from Lloyd’s for permitting a culture of bullying and heavy drinking. It admitted that an annual ‘boys’ night out’, condoned by senior management, resulted in inappropriate behaviour. External-link [BBC News]

Withdrawal symptoms

WTW and Aon became the latest insurance brokers to end their Russian operations. WTW will transfer ownership of the Russian business to local management, while Aon will suspend operations and put Russian staff on paid leave. External-link [Reinsurance News]

Sea change for marine market

North P&I and Standard Club have entered merger discussions which would put them within a whisker of the leading club, Gard, in terms of tonnage. They argue this would facilitate investment in members services and innovation. External-link[Insurance Business]

BI insurers on alert

The recent Corbin & King ruling, which was favourable to policyholders, has left BI insurers wary of the risk of claims inflation. However, the wide variety of policy wordings mean that individual claims will have a range of outcomes. External-link[Insurance Insider]

Shell directors under siege

Activist shareholders have sued Shell’s directors for failing to prepare a strategy for the company to achieve emissions targets in line with the Paris Agreement. The company has released a plan to reach net zero by 2050. External-link [The Guardian]

LIC waits to go public

India’s state-owned Life Insurance Corp has delayed its IPO from 31 March, hoping to wait out market shocks following Russian sanctions, and the effects of any monetary tightening by the US Federal Reserve. External-link [Asia Insurance Review]

P&C splutters into life

Lower Covid losses than in 2020 meant that the big four European reinsurers saw much better P&C results in 2021, according to analysts at Moody’s. Covid added 0.8% to the P&C claims ratio in 2021, compared to 8.5% for 2021. External-link[Reinsurance News]

It’s all relative

“You are too insane for us.” That is apparently what Putin was told when he appealed to Kim Jong-un for military support. This from the man that Donald Trump – not always demonstrably rational, described as a “maniac”. We’ve seen the full extent of Putin’s shamelessness, but even so this one had to hurt. External-link [London Loves Business]

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