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Willis panelists assess Ukraine-Russia exposures


SAN FRANCISCO — Russia is a smaller player in world financial markets but has a large presence in energy and food markets, which could see volatility, and the aviation sector may have substantial exposures in the Ukraine-Russia conflict, Willis Towers Watson PLC sector experts say.

Meanwhile, cybersecurity remains a major concern amid the turmoil in the region, according to panelists who spoke during a Wednesday session on the costs of the Ukraine crisis at Riskworld, the Risk & Insurance Management Society Inc.’s annual conference in San Francisco.

While Russia accounts for only 0.3% of weight in global equity markets, it accounts for 10% of global oil exports and 19% of global natural gas exports, according to Sam Wilkin, director of political risk analytics, financial solutions, in Washington for Willis. He added that energy markets have thus far seen the greatest ripple effects for the U.S from the conflict.

Among coverage lines, Mr. Wilkin said the Willis aviation team sees up to $15 billion of exposure to airplane owners/lessors claiming confiscation of hull exposures.

Janet Pane, head of global services and solutions, for Willis in Hazlet, New Jersey, said the first concern among multinational clients was the safety and well-being of colleagues on the ground, knowing where they were and if necessary, what extraction plans were in place in the event of an emerging event.

“Good planning was really the message here,” she said, adding, “ongoing monitoring” is also key.

Cyber risks also ranked high on the panel’s agenda.

“Attribution is always a difficult thing,” but it has been alleged there have been cyberattacks against Ukrainian government websites, media and social media, in an attempt to thwart communications, said Peter Foster, chairman, global FINEX cyber and cyber risk solutions, in Portsmouth, New Hampshire, for Willis. He added the U.S government has recently warned banks of possible attacks on financial infrastructure.

As cyber underwriters seek to strengthen war exclusions, Mr. Foster said the implementation of multifactor authentication as a security measure is “critical.”

Risk appetite is a key factor in determining what coverage and risk management decisions to pursue, said Mary Catherine Stabler, director in New York of risk & analytics for Willis. It really starts with establishing a “risk tolerance” for a business or organization, which should be done in tandem with the company’s financial teams, she said.

Nimble decision-making, she said, can then be enabled through technology. “Having flexible technology-based analytics is more important than ever right now because you can quickly revise exposures,” such as pulling employees out of a given location on short notice, something now of concern to clients, Ms. Stabler said.