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Insurance giant AIG is looking to withdraw cover for clients operating in Russia and Ukraine, Reuters reported citing sources.

The move is part of the company’s plan to reduce its exposure to losses from claims as the US and its allies continue to bombard Moscow with sanctions over its invasion of Ukraine.

AIG could add exclusion clauses to policies for clients operating in the region, the sources said, adding that other key industry players are also looking to remove Russia, Belarus, and Ukraine from their policies.

“What we are now seeing are the underwriters starting to introduce Russia, Ukraine wording into their policies,” Marsh managing director, US and Canada cyber brokerage leader Meredith Schnur was quoted by the news agency as saying.

If AIG decides to go ahead with its plan of halting cover for clients with Russian and Ukrainian operations, it would be the first major player to do so.

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The sanctions imposed against Russia have triggered a mass exodus of western firms operating in the country including insurance firms.  

However, some entities in the agriculture and energy industries continue to operate in the region and they need cover to continue their operations.

The reputational damage of doing business in Russia, along with the risk of property damage and late payments are the major causes of concern for insurance firms.

Last week, the Joint War Committee (JWC) added all Russian waters to its list of high-risk areas for marine insurers.

Estimates suggest that the Russia-Ukraine war could cost up to $35bn to commercial insurance firms, with aviation, political risk, cyber and marine war being the most impacted sectors.