Vladimir Putin seized 500 commercial aircraft after his invasion of Ukraine – MIKHAIL KLIMENTYEV/POOL/AFP via Getty Images
Insurers will go bust if they are forced to cover the cost of Vladimir Putin’s war in Ukraine, the founder of one of the world’s biggest brokers has warned.
David Howden, who has built an £11bn eponymous insurance empire, said his industry cannot be expected to cover the cost of war, amid a row over Mr Putin’s seizure of hundreds of commercial aircraft.
Mr Howden said: “The insurance market cannot be a systemic backstop for a war between the UK and Russia. And it’s not designed to be. No policies cover it.
“Otherwise, if we covered it all, it would actually end up with the Government anyway – we’d all go bankrupt.”
Russian authorities seized 500 commercial aircraft owned by overseas leasing companies shortly after the outbreak of war against Ukraine.
The owners, mostly domiciled in Ireland, have tried to claim on insurance but have been rebuffed. They are now suing Lloyd’s of London insurers for their refusal to pay out up to $10bn (£8bn) in claims. A legal showdown in the High Court is scheduled for next year.
Mr Howden said insurers are legitimately refusing to pay under the terms of certain types of cover.
He said: “Ultimately, war has never been something that insurance has been there to cover.”
If insurance policies were broad enough to cover the impact of war, it would force the Government to bail out companies “because there is not enough capital in the insurance market to pay for it,” he said.
“The insurance industry – no-one quite knows – [but it’s] four or five trillion dollars of capital. It’s small. It’s a tenth of the derivative market, for example.”