Analysts at global re/insurance broker Gallagher has reported that the ongoing Russia-Ukraine conflict could lead up to losses that are seven times than the final loss amount for the World Trade Center (WTC) attacks in 2001, and four times the initial WTC reserve.
In the Q2 edition of its Plane Talking publication, Gallagher noted that there is approximately $1.1 trillion of aircraft value at risk globally, and Russia makes up around 3% of this value at $32 billion of exposure.
In addition, fellow broker WTW recently warned that the aggregate value of planes stuck on Russian territory following the nation’s invasion of Ukraine could surpass the claims stemming from 9/11.
Gallagher also stated that Russian airlines also lease a disproportionately high percentage of their aircraft they operate. Globally 51% of aircrafts are leased, while Russia leases 86% of their total, compared to the US (27%), China (63%), Major European (61%) and India/Brazil (both 85%).
Moreover, aircraft leasing companies purchase contingent cover for their potential exposure if an airline policy fails to respond to a loss.
In 2021, the contingent market was estimated to generate roughly $150 million for Hull and Liability cover, and around $25 million for Hull War cover.