Insurers May Face Record Claims From Aircraft Grounded in Russia

One expert says the result of Russian President Putin’s actions could be ‘thoroughly devastating’ to aviation.

Thursday, March 24, 2022 at 12:42 PM ET

Verified

One credit rating agency says the grounding of airplanes in Russia could force insurers to face as much as $10 billion in claims. [File Photo: Shutterstock]

Key Takeaways:

Russia effectively nationalized foreign-leased aircraft by re-registering them domestically, defying international aviation mandates, and leaving them without access to essential parts or services from OEMs.
This action is projected to result in an unprecedented financial blow to the global aviation insurance market, with potential claims reaching up to $10 billion, marking the largest annual claims in aviation insurance history.
The massive losses will have far-reaching secondary effects across the entire global aviation industry, potentially leading to increased insurance premiums, stricter contract clauses, or policy cancellations from insurers and reinsurers.

See a mistake? Contact us.

Last week, Russian President Vladimir Putin, with a stroke of his pen, upended the entire aviation industry in one fell swoop.

After Bermuda suspended all airworthiness certificates for Russian-operated aircraft on its registry to comply with sanctions against Russia, Putin signed a law to allow regional and national airlines that leased aircraft from foreign companies to list on Russia’s registry and “to ensure the uninterrupted functioning of activities in the field of civil aviation.”