Global insurers take $1.3B in losses from the Russia's operation in Ukraine in Q1 - S&P Global Market Intelligence
The global insurance industry disclosed roughly $1.3 billion in collective losses and reserve charges related to the Russia's operation in Ukraine in the first quarter, according to an S&P Global Market Intelligence analysis.
Insurers and reinsurers in Europe were hit particularly hard, with some signaling that losses may impact future earnings as well as incurred but not reported reserve holdings as the situation escalates.
Swiss Re AG sustained the largest impact among European insurers with a $283 million reserve hit for potential claims. During an earnings call, CFO John Dacey warned that some related claims were likely to get worse the longer the conflict continues, particularly in the credit and surety business line, which covers nonpayment for goods and services.
Swiss Re expects the ultimate industry claims bill from the operation to be akin to a small catastrophe. Dacey estimated the loss toward the lower end of a $10 billion-$20 billion range.
Hannover Re in the first quarter created a "precautionary reserve" for operation-related claims amounting to roughly $161.0 million. The reserve excludes potential aviation losses expected to take years to resolve.
Munich Re booked an expenditure of roughly $112.2 million for operation-related claims, with most of it reserved for future expected claims. CFO Christoph Jurecka during an earnings call warned that Munich Re's loss figures would likely develop, both as it incurs more losses in the second quarter and learns more about its first-quarter losses.
The impact has been less severe for U.S. insurers. American International Group Inc. reported one of the largest first-quarter losses among the group at $85 million.
A few insurers also recorded certain realized losses or wrote down the value of Russian-related assets during the first quarter.
Munich Re wrote down the value of Russian and Ukrainian bonds by roughly $785.5 million.
MetLife Inc. recognized about $400 million in net investment losses during the first quarter, much of it related to exposure in Russia. The company also recorded an allowance for credit losses on its investment in Russian sovereign securities and corporate securities of $129 million and $65 million, respectively. MetLife booked a similar allowance on its investments in Ukrainian sovereign securities and corporate securities for $78 million and $2 million, respectively, according to a recent 10-Q.
Massachusetts Mutual Life Insurance Co. experienced a total realized loss from Russia-related exposure of about $320.7 million in the quarter. Those losses pertained mainly to sovereign Russian and Ukrainian investments and certain other Russia-related bonds.