March 30, 2022 by Philip Porado
Getting ahead of a European Union-imposed Apr. 15 sanctions deadline, a major global credit ratings agency specializing in the insurance industry has suspended all commercial activities in Russia.
AM Best said it’s also withdrawn all credit ratings on reinsurance companies based in Russia. The actions are in response to EU sanctions imposed on Russia after following its February invasion of Ukraine.
Further, the ratings agency has immediately terminated provision and redistribution of all its information products and services to clients in Russia.
AM Best’s move is in line with those of other major industry players. Zurich Insurance Company recently said it “has decided to suspend underwriting domestic customers as well as to halt renewing of local policies in Russia.”
Zurich also responded to Russia’s use of a large ‘Z’ spray-painted on the backs and sides of tanks and military vehicles involved in the Ukraine invasion by ceasing use of its Z logotype on social media.
“We are temporarily removing the use of the letter Z from social channels where it appears in isolation and could be misinterpreted,” the company told Canadian Underwriter in a statement.
On the claims side, Canada’s insurers are in a holding pattern. Since the war’s start, Canadian Underwriter has reached out to numerous insurers who’ve said claims activity most resembles the early days of the COVID-19 pandemic.
“We’re just unsure, just like we were with COVID the first time. We didn’t know what to expect [in terms of things like] business interruption,” noted David Chmiel, senior vice president and national director of claims North America at HUB.
Chmiel said none of HUB’s 250 claims consultants throughout the U.S. and Canada have yet been contacted about claims. There has been one inquiry from a private equity firm asking if a drop in their stock price would be “covered under a policy saying it was in direct relation to the war and political issues.”
He added, “and obviously, the answer is no,” due to war exclusions in the policy.
Allianz Global Corporate & Specialty made similar comments and noted “in general, no coverage can be confirmed for claims caused by war if policies carry war exclusion clauses.”
The company said it would continue to service existing clients in Ukraine as far as possible and that renewals of current Ukrainian business can be considered and will be thoroughly evaluated.
Feature image courtesy of iStock.ca/sefa ozel