RWI Underwriters Denying, Tightening Coverage Terms in Russia, Ukraine Region

Broker CAC Specialty said the representations and warranties insurance (RWI) market has tightened significantly in Russia, Ukraine, and other impacted regions with some underwriters outright denying coverage.

“For underwriters that historically offered terms on deals with exposure in these areas, responses at the quoting stage now range from immediate declinations for submissions with any exposures in Russia, Ukraine, or Belarus on one hand, to consideration on a case-by-case basis with an underwriting microscope over any nexus with the region,” CAC Specialty said in a new report.

RWI appetite in the region was already limited prior to the invasion of Ukraine by Russia. Now, some underwriters are trying to avoid the area altogether while others are denying coverage based on “capacity-provider mandates.”

Based on feedback from numerous RWI underwriters, CAC Specialty said due diligence in the region was always heightened but now underwriters are looking to confirm the deal has “essentially no risk arising from the current war or political fallout.” Additional underwriting scrutiny will be focused on ownership structure, supply chain, operations, personnel and IT-related matters, among other factors.

CAC concluded that the best case scenario for deals looking for RWI coverage in the area is a quote with broad exclusions. The broker said exclusions it has seen generally include language to protect underwriters from loss resulting from “any business, assets or other operations relating to Russia, Ukraine or Belarus, or embargoes, economic sanctions or other restrictive measure in place.”

One carrier said its new exclusion is not negotiable. Other exclusions can be expected to address impacts on business due to the Ukraine invasion between signing and closing but can be removed.

Topics Underwriting Russia Ukraine