{"id":19106,"date":"2022-03-19T20:09:14","date_gmt":"2022-03-19T14:39:14","guid":{"rendered":"https:\/\/aviationa2z.com\/?p=19106"},"modified":"2022-03-19T20:09:16","modified_gmt":"2022-03-19T14:39:16","slug":"aircraft-insurers-brace-for-barrage-of-russia-claims-chance-of-aviation-industry-loss","status":"publish","type":"post","link":"https:\/\/aviationa2z.com\/index.php\/2022\/03\/19\/aircraft-insurers-brace-for-barrage-of-russia-claims-chance-of-aviation-industry-loss\/","title":{"rendered":"Aircraft Insurers brace for barrage of Russia claims chance of aviation industry loss"},"content":{"rendered":"\n

Aircraft leasing companies scrambling to gather up planes from Russia <\/a>are about to collide with an aviation insurance industry bracing for an unprecedented torrent of claims.<\/strong><\/p>\n\n\n\n

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Lessors of planes stranded in Russia since the sanctions started have warned insurers of possible future claims if the planes are not replaced. Insurers, meanwhile, are revoking some policies, including for war danger, and could dispute claims on coverage yet in force, according to industry participants.<\/em><\/p>\n\n\n\n

\u201cThe scale of potential losses here is staggering,\u201d told Garrett Hanrahan, international head of aviation and space for insurance brokerage Marsh, a unit of Marsh McLennan. \u201cThis could potentially be the largest aviation insurance loss in the market past.\u201d<\/p>\n\n\n\n

Both sides are attempting to improve their positions after President Vladimir Putin allowed Russian airlines to keep planes until the end of their lease and re-register them in the country. Leasing companies seeking to repossess the planes have until March 28 to cancel contracts under European Union sanctions and wider banking bans. As attention turns to the insurance market, coverage providers are trying to avoid being overwhelmed with claims. The stalemate threatens businesses all along the insurance market food chain.<\/em><\/p>\n\n\n\n

Foreign lessors had 509 aircraft leased from Russian operators as of March 16, according to aviation consultant IBA. This is 14 aircraft less than the count of 523 aircraft on March 10. Some of the 14 planes were outside Russia when the sanctions were imposed and have since been returned to lessors, IBA said. Dublin-based AerCap Holdings NV, the world\u2019s largest leasing company, had 142 of the initial total, followed by SMBC Aviation Capital with 35 as of March 10, although it is unclear exactly how many planes leased stay in Russia.<\/p>\n\n\n\n

Lloyd\u2019s of London provides the vast majority of aviation coverage, according to people familiar with the matter who asked not to be identified while discussing private data.<\/p>\n\n\n\n

Representatives for AerCap and SMBC Aviation declined to say <\/h2>\n\n\n\n

Representatives for AerCap and SMBC Aviation declined to say whether they had sent notices of claim. Lloyd\u2019s of London declined to comment on the market\u2019s exposure to potential claims.<\/em><\/p>\n\n\n\n

AerCap will comply with EU sanctions, he told late last month. SMBC Aviation terminated all of its Russian leases and owned aircraft in Russia with a net book value of $1.7 billion in February.<\/p>\n\n\n\n

The TBEN reported on Thursday that Lloyd\u2019s of London expects a \u201csignificant but manageable overall loss\u201d with a final bill of between $1 billion and $4 billion after reinsurance is paid, citing a person familiar with the matter. The exchange did not respond to a request for comment on the estimate.<\/p>\n\n\n\n

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Russia\u2019s action to keep planes whose leases have been canceled could actually help lessors with their insurance claims, Steven Udvar-Hazy, chairman of Air Lease Corp, told on Wednesday. at a JPMorgan Chase & Co.<\/p>\n\n\n\n

\u201cIt demonstrates intent to confiscate, which I think is a critical aspect of our war risk insurance,\u201d Udvar-Hazy told. Analysts at Credit Suisse Group AG said in a note on Thursday that there would be \u201csignificant debate\u201d over the effectiveness of primary insurance coverage. But secondary coverage held by lessors \u2014 which are contracts with the insurance company and unrelated to Russian entities \u2014 should remain effective, analysts led by Moshe Orenbuch told.<\/p>\n\n\n\n

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