As we reach the end of another eventful year, Insurance Journal takes a look back at some of the top International stories, which were, of course, dominated by the Russia-Ukraine war. Three of the top 10 articles for the year covered the war’s ramifications and many others related to the conflict have been covered by IJ during the months since the invasion.
Additional reports that attracted the most readership attention covered topics such as hard market trends, the escalating costs of cyber attacks, the ending of the industry’s blockchain project (B3i), a Swiss Re sexual discrimination case and a potentially dangerous solar storm (which was truly international/global news)
Here are the Top 10 International Insurance Journal Articles for 2022:
This article, published in April, warned of a looming solar storm that potentially could bring damaging geomagnetic activity – affecting electrical grids, airlines and satellites. The good news is that the earthlings hardly noticed the storm and others that followed, but they did notice the article which attracted tens of thousands of readers.
Articles about airline accidents always get a lot of attention from IJ readers. This article about a DHL operated cargo jet that broke in two in Costa Rica, topped by a dramatic photo, was no exception. Fortunately, the pilots escaped without serious injuries.
Over the past few years, there has been a debate about whether the market was “hardening” or “hard.” The Bank of America ended that argument with a report in October, stating that property-catastrophe rates are officially “hard,” which will lead to supply-demand imbalances.
The industry aimed to improve market efficiencies and reduce costs with its blockchain initiative, B3i, launched in 2016. After nearly six years of effort, B3i announced in July it was ceasing activities and had filed for insolvency. The failure was blamed on the lack of end-to-end contracts, starting at the original risk and ending with a digital reinsurance contract.
This article details the escalating costs of cyber attacks and the fact that $600 million in cash was stolen or taken as ransom in just 10 cyber incidents in 2021. In these 10 cyber attacks, tens of millions of citizen records were stolen, 40,000 businesses’ IT operations were put at risk, one billion airline passenger details were compromised and at least one bank was effectively shut down for more than a week.
- Inside Allianz’s $4B Structured Alpha Fund Blowup: Red Flags and Fat Fees
Allianz to Pay Over $6B for Structured Alpha Fraud, Former Fund Manager Indicted
Two articles in the top 10 International stories covered the spectacular collapse of Allianz’ Structured Alpha hedge fund. We’ve combined these two articles into number 6 on the list. The articles drew many readers because of the cost of the collapse to industry giant Allianz – both financially and reputationally. After all, careers have ended and investor lawsuits and settlements are piling up. The articles try to answer the question about what went wrong.
No more commentary about this article is necessary after reading the headline and the lead paragraph, which follows: “A former Swiss Re AG underwriter won her sex discrimination suit after she was left humiliated by a senior manager who told her ‘If I had breasts like yours I would be demanding too.’”
While the jury is still out about the effectiveness of Western sanctions on Russia, an economist at the International Monetary Fund in April said that Russia’s economy will not recover anytime soon from the sanctions and it could see further damage if those sanctions would be expanded to hit energy exports. A little over seven months later, on Dec. 5, Western nations did indeed expand the sanctions by imposing a $60 per barrel oil price cap on Russia’s oil exports.
As part of Western sanctions imposed on Moscow over its attack on Ukraine, Greece impounded a Russian oil tanker, which was later released due to confusion over the sanctions regime. The seizures of Russian tankers and aircraft as well as oligarchs’ jets and yachts have been in the news since the invasion of Ukraine in February.
It will take many years and many legal battles to determine the ultimate price tag of the Russia-Ukraine war. S&P Global Ratings’ estimated losses could range from $16 billion to $35 billion. This wide range of outcomes shows the amount of uncertainty involved. What is certain, however, is that exposures range from aviation losses (those 400-plus leased jets that have been confiscated in Russia) as well as other specialty lines such as trade credit, political risk (contract frustration, agriculture, and commodities), cyber, political violence, and marine hull war.
Because the solar storm article (at number one on the list) was such an anomaly with so many readership hits, we’ve decided to add a bonus article at number 11. Here a Markel executive warns buyers about avoiding short-term price advantages over long-term relationships. It’s important to have a long memory and support those providers and insurers that have continued to work with brokers and insureds all the way through this hard market, according to Nic Brown, divisional director – Broker, Markel UK.
And from previous years:
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