The impact of the Russia–Ukraine war on the world’s largest listed insurance firms

We examine the short-term market impact of the beginning of the military conflict between Russia and Ukraine (24 February 2022) on the world’s largest insurance firms. Using an event study for the 100 largest listed insurers globally, we observe that the unexpected loss effect seems to prevail over the long-term growth effect, leading to a decrease of insurance firm’s equity market values. Furthermore, our results show a higher negative stock market reaction for foreign insurers with a high exposure to Russian/Ukrainian markets. These results also confirm the existence of a ‘proximity penalty’ for firms in the vicinity of the war zone. Finally, our results provide insight into which insurer-specific characteristics emerge as value drivers. Larger, well-capitalised, profitable and life or diversified insurance firms with less institutional ownership have superior stock market returns and are more able to handle the losses resulting from the war.