Russian invasion of Ukraine to drive investment volatility but insurers 'well capitalised'

Written by Adam Cadle

04/02/2022

Global insurers and reinsurers generally have little direct business or investment exposure to Ukraine and Russia, but will face the secondary impacts of greater financial market volatility and higher energy prices, Moody’s has said.

“Financial markets have experienced a flight to quality, equity prices are down, high quality bond prices, safe-haven currencies and commodities, as well as oil and gas prices, have risen,” it added. “Although investment volatility has increased sharply, our rated insurance companies are generally well capitalised and should be able to weather this period of volatility.”

Moody’s said if the military conflict is prolonged, higher commodity prices could lead to broader inflationary pressures.

“If inflation exceeds premium pricing increases, insurers could experience some underpricing of business and adverse reserve development.”

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