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BOC Aviation Sues 16 Insurance Companies Over Russia Losses

BOC Aviation has become one of the latest aircraft leasing firms to launch legal action against insurers to recover losses from aircraft stranded in Russia. The Dublin-based aircraft lessor is suing 16 insurance companies, including Swiss Re, Chubb European Group, Lloyd’s of London and AIG Europe, Reuters reported.

BOC Aviation is a subsidiary of Singapore-based BOC, the largest aircraft leasing company in Asia. In August, the company reported to its investors that 17 planes stuck in Russia amounted to a loss worth $804 million.

Russia’s unprecedented move to nationalize more than 500 foreign-registered aircraft from lessors has disrupted the insurance sector.

BOC Chief Executive Robert Martin told investors in his earnings update in August that the sanctions against Russia were “rushed through approval by governments” and would affect both lessors and insurers, both parties in litigation for the foreseeable future will bind. Martin said BOC Aviation filed insurance claims at the time, and the company intends to “vigorously pursue those claims.”

“This has had an impact on landlords and our insurers and will keep lawyers busy for many years. It may require a complete rethinking of aviation insurance,” said Martin.

BOC Aviation joins AerCap, Avolon and Carlyle Aviation as among the major aircraft leasing companies to file lawsuits against insurers. In June, AerCap filed a $3.5 billion lawsuit over its claim for more than 100 planes. Earlier this month, Bloomberg reported that Carlyle Aviation Partners, a subsidiary of the Carlyle Group (NASDAQ: CG ), filed a $700 million claim with more than 30 insurers and reinsurers.

Fitch Ratings, the US credit rating agency, indicated that “insurers and reinsurers could face claims as high as $10 billion in a worst-case scenario due to the grounding of aircraft in Russia.”

If insurers and reinsurers had to make those payments, it would be “through and through devastating,” said Bill Behan, CEO of Assured Partners Aerospace. FLY in March. He said he estimated the payout would be more than “two to three times the size of every insurance dollar paid to the insurance industry in the world for all of aviation.”

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