Insight

The war in Ukraine is first and foremost a human tragedy

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The war in Ukraine is first and foremost a human tragedy, brought about by an act of aggression on a sovereign country. Our thoughts are with all those affected. The return of conventional warfare to Europe is a huge shock that brings considerable global consequences, from geopolitical realignments to financial shocks. The risk of escalation is ever present and a period of macroeconomic instability is assured.

The risk of escalation is ever present and a period of macroeconomic instability is assured.

Summary

Pre-war macro pressures: elevated energy prices, supply chain constraints and disruption, tight labour markets and rising wages.

Post-invasion: a flight to quality (with volatile equity markets and a move to high-quality sovereign bonds), rapidly rising commodity prices and higher inflation expectations.

(Re)insurance implications: the sector is strongly positioned to navigate the fallout from the crisis with limited direct exposures, (currently) manageable second order effects, a resilient premium base and some mitigation from accelerating price rises.

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Ukraine Crisis - A Macro View