Some of the insurer’s crisis management policies, for example, have been ‘triggered because of the war in Ukraine’, says group chief financial officer
Insurer Axa is facing “potential claims” exposure across three lines of business as a result of the ongoing war between Russia and Ukraine.
In its 2022 half-year financial update, published yesterday (3 August 2022), the insurer revealed that the impact of the conflict has already set Axa back around €300m (£252m).
Alban de Mailly Nesle, group chief financial officer at Axa, explained that although the insurer has “received extremely few claims” linked to the war so far, the business is still monitoring and reviewing its “reserves in anticipation of potential claims”.
Exposure to risks
One key business line at Axa that could be subject to conflict-related claims is aviation due “to the planes that have been grounded by the Russian government at the beginning of the war with Ukraine”, de Mailly Nesle noted.
“That’s the majority of the €300m that we have booked this first half,” he added.
This situation arose after the Russian Federation’s president – Vladimir Putin – signed a law on 14 March 2022 that allowed Russian airlines to retain and operate over 500 leased airliner jets that had become stranded in Russia following the commencement of hostilities in February this year.
Putin’s action was in response to sanctions on Russian economic assets being imposed by the Western world in reaction to Russia’s invasion of Ukraine.
“There are obviously uncertainties as to the planes and whether they will be given back to their owners, [as well as uncertainties around] the length and scope of the war in Ukraine,” the chief financial officer added.
In a similar vein, de Mailly Nesle said Axa’s marine book could be affected by the continuing conflict “because of some vessels that are also retained in some of the Ukrainian harbours”.
Lastly, Axa additionally believes it could see claims through its crisis management line. This provides “specific policies which we sell to a limited number of customers to cover the impact of war, terrorism or riots, for instance”.
De Mailly Nesle said: “Some of those policies were triggered because of the war in Ukraine.”
Axa confirmed that it will be keeping a close eye on the risks arising from the conflict and reviewing its products closely with the war in mind.
“Obviously, we will review this provision regularly and if need be, we will adjust,” de Mailly Nesle said.