11 Mar 2022 13:23

Leading Western insurance brokers Marsh & McLennan, Aon plc suspending operations in Russia under different scenarios - source

MOSCOW. March 11 (Interfax) - Marsh & McLennan, a major international insurance broker, has decided to withdraw from the capital of its Russian subsidiary, JSC Marsh Insurance Brokers, an informed source in the insurance market told Interfax. "A 100% share of the Western broker will be bought out by its Russian entity, the company itself will be renamed. The entire team and management will remain, and Marsh's general director for Russia and CIS, Andrei Denisov, will still lead the company after the transaction is completed," the source said.

"The broker's operations have not been suspended, which is important in today's situation, when clients need to maintain current contracts, intensive advice on the preservation and organization of insurance protection in conditions of high turbulence in various sectors of the economy, changes in the financial market and in legislation, blockage of most international reinsurance opportunities. The job for insurance brokers is only getting more and more complicated. The transfer of powers to new shareholders from Marsh will follow a 'soft scenario' without cessation of the broker's work," the source told Interfax.

Aon Rus - Insurance Brokers LLC, a subsidiary of Aon plc , is also stopping its activities in Russia, the source continued: "However, a different scenario is unfolding. A final decision on the further fate of the Russian subdivision has not yet been made, the employees of the Russian subdivision have been placed on forced leave for an indefinite period".

Marsh is an international professional services company, headquartered in New York, which is engaged in brokerage activities in the areas of insurance and risk management. It is a subsidiary of Marsh McLennan, and part of its risk management and insurance division, represented in 130 countries with about 40,000 employees in total.

JSC Marsh - Insurance Brokers has been operating in Russia since 1993, its activities include organization of insurance and reinsurance protection in the segments of cargo transportation, energy, industry, aviation and space, construction, and technology as well as risks of financial institutions and personal insurance risks.

Aon plc is a well-known international company, specializing in risk management, insurance and reinsurance brokerage services and human resources consulting, represented in 120 countries of the world with 50,000 employees. The large Anglo-American Irish international company is headquartered in Dublin, Ireland. Up until April 2020, the headquarters was located in London.

Aon Rus - Insurance Brokers LLC, a subsidiary of Aon plc, has been operating in Russia since 1994, with over 1,000 Russian and foreign companies among its legal entity clients. The scope of the company's interests includes organization of property insurance programs (both commercial real estate and large industrial risks, including the fuel and energy industry and metallurgy), liability insurance, insurance of construction and installation works, insurance of trade lending and risks of financial institutions, cargo transportation, marine, aviation and space risks, as well as risks under personal insurance programs.

International insurance brokers in Russia, who organize insurance and reinsurance protection for Russian and foreign clients, have found themselves "between a rock and a hard place" due to the introduction of sanctions. On the one hand, foreign players in traditional reinsurance markets in Europe and the USA refused to continue operations with Russian partners, and on the other hand, Russian lawmakers initiated a bill that introduces a ban on transactions with foreign insurers, reinsurers and insurance brokers from unfriendly countries, applying also to the transfer of funds by Russian insurers under contracts concluded before the date of the bill entering into force.

The draft bill is being considered by the State Duma via a simplified procedure; according to plans by deputies, it may be adopted in three readings on March 11.