Aircraft insurers brace for deluge of Russia claims

Aircraft leasing firms working to retrieve planes from Russia are set to collide with an aviation-insurance industry bracing for an unprecedented barrage of claims. Lessors of planes stuck in Russia since the onset of sanctions have warned insurers of possible claims to come if the jets are not returned. Insurers, meanwhile, are cancelling some policies, including for war risk, and may challenge claims on coverage still in force, industry participants said. "The magnitude of potential loss here is staggering," said Mr Garrett Hanrahan, global head of aviation and space for insurance broker Marsh, a unit of Marsh McLennan. "This could potentially be the biggest aviation insurance loss in market history." Both sides are trying to improve their positions after President Vladimir Putin allowed Russian airlines to keep aircraft until the end of their lease terms and re-register them in the country. Leasing firms seeking to repossess planes have until March 28 to cancel contracts under European Union sanctions and broader banking prohibitions. As the focus shifts to the insurance market, providers of coverage are trying to avoid being overloaded with claims. The stand-off threatens firms up and down the insurance market food chain. Foreign lessors had 509 aircraft rented to Russian operators as at March 16, according to aviation consultant IBA. That is 14 planes less than the 523 plane tally on March 10. Some of the 14 planes were outside Russia when sanctions were imposed and have since been returned to lessors, IBA said.<br/>