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War in Ukraine impacting on global insurance industry

24 August 2022

The war in Ukraine is continuing to impact the global economy with rating agency S&P predicting  losses from the conflict could amount to Euros 35.4 billion ($36bn) for the insurance industry.

It is expected the war will disrupt the industry in the near- to midterm and there may also be recovery implications for foreign insurers that have reinsurance with Russian insurers and reinsurers.

Reviewing insurance policies in this volatile scenario is vital and the latest member survey by the Federation of European Risk Management Associations (FERMA), showed that 91% of European Risk Managers are now involved in forming their company’s corporate strategy, compared to only 55% in 2020.

This reflects the concerns over the havoc being inflicted on global business operations, causing supply chain disruptions, interruptions in operations, and the loss of assets located abroad. Retailers, manufacturers, service providers, and technology companies have discontinued, or are in the process of discontinuing, operations in Russia.

Disruptions in the supply of strategic metals, including neon used in chip manufacturing, which is produced in Russia and refined in Ukraine, have caused losses to business partners across the supply chain.

Key insurance products impacted by the war in Ukraine that should be regularly reviewed include:

Political Risk Insurance

Political risk insurance protects companies from loss caused by political events and can include physical loss or damage caused by unrest, war, government action, or changes in policies, laws, and regulations and business interruption losses.

Cyber insurance

The war has focussed attention on cyber-attacks and the need for cyber insurance policies which often contain war or hostile acts exclusions. Policies should be reviewed for this exclusion. The war could drive cyber rates higher in the already-hardening market according to ratings agency A.M. Best Co.

Trade Credit Insurance

This protects an insured against a commercial customer’s failure to pay for goods and services.

Aircraft Insurance

The loss of aircraft leased by international companies to Russian operators that have failed to return the aircraft following termination of lease agreements could result in billions of dollars in losses.

Marine Cargo Insurance

Insurers have raised the cost of providing cover for merchant ships through the Black Sea due to the war. Marine cargo insurance covers the risk of loss or damage to goods or merchandise in transit over the ocean and may extend coverage to loss incurred when goods are delayed at port or associated warehouses. Generally, it excludes coverage for loss caused by war or hostile acts, but the can be added back into the policy through an endorsement.

Supply Chain Insurance

This is designed to provide all-risk coverage for lost profits and expenses caused by supply chain disruptions.

Directors and Officers (D&O) Coverage

Company directors and officers (D&Os) can face liability claims for an increasingly broad range of scenarios with the war in Ukraine among factors heightening the level of scrutiny on D&Os and their decisions.

Commercial Property Insurance

Commercial property insurance provides “all risk” coverage for physical loss or damage to the insured’s property. While coverage is generally subject to an exclusion for loss caused by war or hostile acts, some policies contain endorsements extending coverage.

W Denis is a multi-class independent insurance broker who can place all types of commercial insurance, globally. Please contact Vida Jarasiunaite at or, for overseas enquiries, contact Daniel Moss on for more information.

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