John Dacey, the Group Chief Financial Officer (CFO) of global reinsurance giant Swiss Re, said this morning that while it’s too early to tell whether there will be losses from Russia’s invasion of Ukraine, the firm has immaterial exposure on the asset side of the balance sheet and does not expect outsized exposure on the liability side.
After announcing an attack in Donbas in the early hours of Wednesday morning, Russia’s President, Vladimir Putin, ordered Ukraine to lay down its arms and warned other countries of unprecedented consequences if they intervened.
As reported by mainstream media around the world, Russia has attacked numerous parts of the country as its troops head for Kiev, the capital and most populist city of Ukraine.
In response, Ukraine has declared martial law and while its people defend their country against an unprovoked invasion, countries in Europe and elsewhere have announced sanctions designed to cripple Russia’s economy and cut it off from the rest of the world.
In light of the size of global reinsurer Swiss Re and its presence around the world, the Russia / Ukraine conflict was discussed in the firm’s 2021 earnings call, with CFO Dacey providing some insight into Swiss Re’s potential exposure across its balance sheet.
“I think on the investment side we have immaterial exposure. Almost nothing directly invested in the Ukraine, and a small amount related to Russia. Immaterial for the overall portfolio of investments,” said Dacey.
On the liability side, so the Group’s underwriting, Dacey explained that Swiss Re does write some restricted lines of insurance in both countries.
“We’ll see how things develop,” he said. “But we’re not overweight in any sense and the lines that we do write there have been restricted for some period of time. The also unfortunate reality is, at least within the Ukraine, you could imagine that war exclusions are going to be relevant for some of the losses that are suffered by the population and businesses there.”
“So, I don’t believe that we’ve got any outsized or particularly dramatic exposure on the liability side and almost none on the asset side,” added Dacey.
The CFO went on to emphasise that in reality, it’s impossible at this point in time to gauge whether there will actually be losses and, whether those losses will be relevant to the policies Swiss Re has written.
“But again, I don’t see a situation where, at least today, this would be anything dramatic or material in the year’s earnings for us,” said Dacey.
The comments came during the reinsurer’s full year 2021 earnings call following the release of an impressive set of results against a backdrop of elevated catastrophe losses and ongoing impacts from the COVID-19 pandemic.
