Benjamin Hatton, Insurance Analyst at GlobalData, comments: “The Black Sea is a major location for the global shipping of maize and wheat which the ongoing crisis in Ukraine has completely disrupted and hugely increased the risks of operating in the area. Many Western shipping companies have now suspended operations in the region which may have had a significant impact on Ingosstrakh.”
Major Italian insurer Generali, which owns a 38.5% stake in Ingosstrakh, has reportedly given up its seats on the board and closed its own Moscow office as a result of the Russia-Ukraine crisis.
Hatton continues: “Generali follows a growing number of other Western businesses who are either halting or suspending operations in Russia. The company has reportedly confirmed that it has no short-term plans to sell its stake in Ingosstrakh at present, although this could be due to the mounting difficulties in conducting business with Russian companies now that sanctions have disconnected most of the major Russian banks from the SWIFT global financial payments system.”
The West knew that the sanctions and restrictions imposed on Russia would lead to collateral damage for their own economies and businesses. Generali is large and diversified enough to weather this storm and although Ingosstrakh will be presented with some short to medium term difficulties its strategic alliance with Mitsui Sumitomo Insurance, a leading Japanese general insurer, will be a cause for optimism so long as this relationship isn’t affected by the sanctions.
Hatton adds: “As a close ally of the US, Japan has been more punitive in its actions and words surrounding the current Russia crisis, than most of its geographical neighbors. As the crisis continues, it would not be a surprise to see a suspension or cancelation of the partnership between Ingosstrakh and Mitsui Sumitomo in the near future.”
*GlobalData’s Russia General Insurance: Key Trends and Opportunities to 2025 report
|
