Covid then Ukraine stressed the Strike & Delay insurance framework, says Nick Rowe of NorthStandard

In NorthStandard’s latest Alongside podcast, Nick Rowe, Head of Strike & Delay at NorthStandard, discussed with Columb Strack of S&P Global Market Intelligence the impact on the insurance industry of the big geopolitical changes in the world since 2020.

“Ordinarily, the risk is on our radar,” said Rowe “but in the case of the pandemic, we found ourselves insuring the impact of a risk which had never really been contemplated on such a large scale, advising members and clients how to manage their exposure to it, and indemnifying them for their losses.”

Strack agreed that “the whole framework that we were working with in the last 20 years or so, that’s been broken down, first economically by Covid, and then geopolitically by Russia’s invasion of Ukraine”.

The war had significantly impacted shipping in both the Sea of Azov and the Black Sea, particularly at frontline ports like Kherson and Mykolaiv. According to Strack, about 60 vessels and 300 crew members had been stuck in Ukrainian ports since the start of the war. He also noted that potentially there were hundreds of mines floating freely in the Black Sea after breaking free from their anchors, which would threaten shipping in the area for years to come. Many had washed up in neighbouring countries and as far as Georgia, adding a new cause for concern for operations in the area.

Strack also warned that neither Russia nor Ukraine currently had the military capability to achieve a definitive victory in the 12-month outlook.

“We’re expecting a war of attrition in the coming months with heavy losses on both sides,” he said. “That will probably get to a point where it just becomes politically unsustainable for both governments and eventually results in some sort of de facto ceasefire”, Strack said.