The Russia-Ukraine war has turned into a “seismic” geopolitical event with knock-on, far reaching implications across the global risk landscape, Lloyd’s and Aon say in a joint report on the conflict.

The report, the second in a series evaluating the conflict, says key developments since the war started in February have demonstrated how risks are becoming more complex and uncertain, and the role of insurers and reinsurers in coming up with solutions to mitigate against those risks.

Key developments mentioned in the report include explosions at the Nord Stream 1 and 2 gas pipelines, disrupting critical Russian supplies to Europe and Moscow’s moves to reduce the Russian economy’s reliance on the US currency.

“The (re)insurance industry has already begun reacting to the conflict and the challenges as they unfold, with a number of solutions already in place to respond to emerging customer needs,” the report says.

“Yet it is also clear that the implications for the industry are vast, with several areas where additional action is needed.”

The industry has stepped up to support businesses since the conflict, such as the Lloyd’s facility to insure crucial shipments of grain out of Ukraine.

But other areas such as supply chain and reputational risk are likely to require further action from the industry to help customers build greater resilience against the long-term effects of the conflict.

As a result, Lloyd’s and Aon have agreed to establish an innovation forum to support the commercialisation of new solutions that address emerging customer needs.

The initial focus of the innovation forum will be on three key topics where the crisis has particularly exacerbated the challenges facing businesses: energy, cyber and supply chain.

“The tangible impacts of the Ukraine conflict are evident across the world and across industries,” Aon Global Chairman of Reinsurance Solutions Dominic Christian said.

“Although the insurance market has reacted quickly and effectively to support policyholders, the crisis has exposed gaps that show we must move further and faster.”

The report, Ukraine: A conflict that changed the world – the re(insurance) industry response – also touched on the seven areas of pressure facing businesses that were flagged in the first report: cyber, supply chain, food security, climate transition, energy security, ESG and public sentiment.

It says the industry’s progress in responding to the seven challenges ranged from immature, gaining momentum and to well progressed.

Progress in relation to supply chain and ESG and public sentiment is immature; in cyber, climate and food security the industry is gaining momentum; and in energy security the industry is well progressed in coming up with solutions.

Click here for the report.