What will the impact be of the anticipated implosion of the Russian banking sector?
Will the anticipated implosion of the Russian banking sector lead to mass nationalisation, as suggested in this article?
Working on Russian banking claims has always been a colourful experience; and this interesting piece [click here] in the Spectator focusses on a different consequence of Russia’s invasion of Ukraine.
Whilst the implosion of the Russian banking sector is not our primary concern from a humanitarian perspective, if economist Andrei Movchan is correct in his prediction that “this drain of human resources will be ‘catastrophic’ for the country’s banking sector”, then dealing with the insurance claims which will inevitably result from the conflict will be a very different experience.
The Harvard Business School-educated former head of a major Russian executive headhunting firm comments that “For a long time Russia was an attractive place to work … and there was serious dynamism in the retail banking sector. Now? It’s a burned field… basically the banking sector no longer exists. And because of the near-total suspension of the Moscow stock market, all publicly listed businesses in Russia are effectively worth zero. It’s a suspended mass default, which can only end in mass nationalisation.”
As insurers work to assess their potential exposure to Russia’s invasion of Ukraine, it is apparent that adjusting and quantifying those losses will be even more challenging absent the knowledgeable individuals on the ground, including brokers, lawyers and translators whom insurers have been able to rely on in the past. Nevertheless, our experience of dealing with claims arising out of conflict zones suggests that insurers will rise to the challenge.
Helen Meredith, Managing Director
