Political unrest in Russia, Ukraine puts brakes on underwriting: Marsh
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Concerns over the political unrest and country credit rating in Ukraine and the threat of potential sanctions against Russia has caused some insurers to effectively stop underwriting political risk insurance in those countries, Marsh L.L.C. said in a briefing Wednesday.
It will be difficult for companies looking to conduct new business in Russia to get coverage, and insurers have effectively stopped offering coverage for any new credit or political risk exposures in Ukraine, the brokerage said.
Policyholders with exposure in Ukraine and Russia might face premium rate increases when they try to renew their policies, Marsh said.
“The current situation in Russia and Ukraine is extremely fluid,” Evan Freely, global leader of Marsh’s credit and political risk practice, said in a statement accompanying the briefing. “Companies with interests in the region face the potential for damage to assets through political violence and possible broader expropriation measures or sanctions against foreign interests in Russia should sanctions be imposed against the country. This is in addition to the potential for payment delays on trade payment obligations due from customers, especially those in Ukraine.”
Marsh is advising companies with business in Ukraine and Russia to review all insurance policies and clearly understand their limits and sub-limits, deductibles, loss-reporting requirements, covered perils, and other restrictions.
For trade credit insurance, organizations should maintain a conversation with their insurer regarding their customers’ ability to pay as well as the insurer’s underwriting strategy, the broker said.
Insurance companies’ underwriting strategy for Ukraine and Russia is subject to change as the rapidly changing crisis unfolds, Marsh said in the briefing.
The full briefing is available here.
