Russell Group, an insurance analytics company, said that the loss could be the largest to hit the market for aviation war risks since the New York terrorist attacks of 9/11.
The company estimates that 589 western-built aircraft, many of which are leased to Russian operators, are grounded in the country. Russia's largest operator, Aeroflot, has been blocked from European and North American airspace under sanctions introduced after the country invaded Ukraine.
Suki Basi, Russell Group managing director, said there were fears in the sector about the fate of Western aircraft leased to Russian companies.
"There is a large concern in the aviation war market at the moment; clients are all trying to understand the number and value of planes on the ground in Russia, as there are concerns that these aircraft could be confiscated by the Russian government," Basi said in a report released on Thursday.
Britain banned insurers last week from providing cover for aviation and aerospace equipment to clients in Russia or for products intended to be used in the country. The ban follows similar measures introduced by the European Union on Feb. 25.
The sanctions have set the stage for potential legal conflict between European aircraft owners and their insurers over liability if Russia confiscates the planes. Law firm Holland & Knight last month said that all sides should urgently review the contractual terms of their insurance policies, warning that cover might have "ceased to be effective" under the sanctions.
The EU's sanctions did not include a "wind-down" clause but became effective immediately. But the U.K. has given insurers until March 28 to stop providing cover for Russian clients or for products intended to be used in Russia.
The U.K. sanctions also, crucially, include a ban on payments of claims. But the wording of the government's policy is unclear on whether liability is deferred until sanctions are lifted or is waived entirely because the policies become void.
The Bank of England has declined to comment, saying only that the terms of insurance contracts will be a determining factor. HM Treasury has so far failed to respond.
--Editing by Ed Harris.
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