Lloyd’s of London Reserves $1.3B for Ukraine Claims

Lloyd’s of London (SOLYD.UL) has set aside 1.1 billion pounds ($1.26 billion) to pay claims related to the war in Ukraine, the commercial insurance market said on Thursday, as it recorded a first-half pre-tax loss of 1.8 billion pounds.

The reserves for the Ukraine claims were net of reinsurance, Lloyd’s said in a statement. Insurers buy reinsurance to offload some of the risk of large losses.

"We’ve taken a very early view of what we think the financial implications will be," Lloyd’s Chief Executive John Neal told Reuters by phone, adding the losses were likely to be about the same size as "a small to medium-sized natural catastrophe".

Around a quarter of Lloyd’s’ Ukraine losses may come from the aviation market, Neal said.

Aviation lessors and insurers are wrangling over planes trapped in Russia due to the invasion of Ukraine -- which Russia calls a "special military operation" -- and subsequent Western sanctions. Insurers globally may face claims of around $10 billion to $15 billion from the conflict, Neal added.