Aviva has “very limited direct exposure” to the escalating conflict in the Middle East but is monitoring potential supply chain disruption that could feed through into insurance claims inflation, group chief executive Amanda Blanc (pictured) said.
Speaking on a media call following the insurer’s full-year results, Blanc addressed questions about the company’s exposure to the conflict.
“First of all, I think it's important to say that we don't actually have any operations in the region and we've got a very limited direct exposure in any of our businesses,” Blanc said.
The insurer has also received some enquiries from customers concerned about travel plans as the conflict unfolds.
“What we've seen so far is we've had very limited travel claims,” Blanc said. “We have had calls from customers asking about should they travel. And obviously we're pointing them to the Foreign Office guidance on that.”
Blanc said customers affected by disruption should first contact airlines or travel providers.
“In travel insurance claims, the first port of contract should always be to the airline, the travel provider or the tour operator, they're obviously best placed to rearrange the travel and to cover the immediate costs,” she said.
“If customers then face costs that can't be recovered from the travel providers, then they can make reasonable claims, depending obviously on their policy terms and conditions, but we don't expect that to be significant.”
Insurers are also watching whether geopolitical disruption could feed through into supply chains and claims costs, particularly after the inflationary pressures that followed the Ukraine war in 2022.
Addressing supply chain risks, Blanc said, “We've got a good case study in this in terms of the Ukraine situation back in 2022, where we saw the impacts on supply chains had inflationary impact on things like vehicle parts and replacement vehicles.
“If this goes on for a prolonged period of time, we would expect that this could have some impact. But I think it's very early to be talking about that yet.”
Blanc said Aviva’s global corporate and specialty operations have limited exposure and that standard war exclusions are in place.
“In the GCS business, we've got limited exposure, which is in line with our sort of balanced approach to exposure management,” she said. “We have all obviously all the standard war exclusions in place, so we do not expect this to be a significant impact for Aviva via the GCS business.”
She added that the insurer is closely monitoring data for any signs of disruption feeding through into claims costs.
“In anything like this, we are reviewing the data from day one,” Blanc said. “The benefit of a modern data platform and the amount of data that we have is that we can look at that almost on an hour-by-hour basis.”
