PCS: re/insurance loss from the Ukrainian war may exceed USD 20 billion

21 April 2022 — Daniela GHETU
The ultimate insurance and reinsurance industry loss from the ongoing conflict in Ukraine could rise above USD 20 billion, Artemis reported quoted an analysis from PCS, a Verisk company.

According to PCS, the industry loss will most probably come in between a low-end estimate of USD 13.05 billion, to more than USD 23 billion. PCS's current working estimate stands at USD 20.6 billion, based on its analysis of various specialty lines of business. "It's still early in the conflict, though, and the flow of information is but a trickle compared to what will likely come through when loss adjusters eventually gain access to affected sites. As a result, the conflict in Ukraine has the potential to become the largest industry-wide insured loss, across all classes of business, in history, even exceeding that of the terror attacks of September 11, 2001," PCS said.

Aviation and marine insurance may be the areas of the reinsurance market that losses could come through the most. For the aviation lines PCS's estimate of loss lies in the range of USD 7 to 13 billion, while for the marine sector the loss might total between USD 3 and 6 billion. Energy lines may add another USD 1 to 4 billion.

Property per risk exposure is another area of significant uncertainty, given the ongoing and already extended destruction wrought on the country by Russian forces, a course of action that will probably continue. A"bare-minimum estimate based on specific estimated loss information received so far" by PCS is ofg USD 2 billion. "It is extremely difficult to forecast the ultimate industry-wide insured loss from property per risk in the Ukraine conflict, and it will take some time for even a wide range to emerge. So far, it seems likely to exceed USD 2 billion, based on intelligence received by PCS, but as with the energy sector estimate above, it's tough to determine more than that," the Verisk unit explained.