[LONDON] Lloyd's of London faces major claims this year from the conflict in Ukraine, but this will not create solvency difficulties, the commercial insurance market said on Thursday (Mar 24).

Lloyd's is talking to its market partners to understand their exposure related to the conflict, it said in a statement.

Lloyd's has around 100 member syndicates which underwrite complex risks such as planes, ships and oil rigs.

The aviation insurance market is seen as particularly exposed to the impact of Russia's invasion of Ukraine and subsequent sanctions by Western governments.

Global leasing companies are staring at an imminent sanctions deadline to repossess more than 400 jets worth almost US$10 billion from Russian airlines, as experts warn legal wrangling between airlines, lessors and insurers could last a decade.

Lloyd's said business underwritten in Ukraine, Russia and Belarus currently accounted for less than 1 per cent of the market's total business.

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Lloyd's was hit badly by the Covid-19 pandemic in 2020 but recovered ground last year after raising premium rates and excluding the virus from insurance policies.

It posted a 2021 pre-tax profit of £2.3 billion (S$4.1 billion), following a £900 million loss in 2020.

"The market's underwriting discipline will enable sustainable profitability in the years to come, coupled with a balance sheet that can support our ambition to grow profitably," chief executive John Neal said. REUTERS