Bank of Russia injects $2B into state reinsurer to cover mounting war losses

Russia’s central bank is pouring 165 billion rubles, roughly $2 billion, into the Russian National Reinsurance Company (RNRC), the state-owned reinsurer that has become the backbone of the country’s insurance market since Western firms packed up and left. Governor Elvira Nabiullina confirmed the capital injection as a direct response to financial losses driven by Ukrainian attacks on Russian territory.

Record payouts and a shrinking safety net

RNRC recorded approximately 71 billion rubles in reinsurance compensation payments in 2025, a record high fueled overwhelmingly by war-related claims. The company now handles around 71% of property insurance for legal entities in Russia.

RNRC is wholly owned by the Bank of Russia, which already raised the company’s authorized capital to 300 billion rubles back in March 2022, shortly after the full-scale invasion of Ukraine began. The latest injection suggests that even that substantial buffer wasn’t enough to absorb the pace of claims rolling in three years into the conflict.

How RNRC became Russia’s only game in town

Founded in 2016, RNRC was originally designed to provide a domestic reinsurance option for Russian companies. It was useful but not dominant. Then came 2022.

When Western sanctions hit and major international reinsurers like Munich Re, Swiss Re, and Lloyd’s of London withdrew from Russian business, RNRC went from being one option among many to being essentially the only option. Russian insurers that had previously spread risk across global markets suddenly had nowhere to go but the state-backed entity.

The departure of Western reinsurers also meant that the risk-sharing mechanisms that normally distribute catastrophic losses across global capital pools simply don’t exist for Russia anymore. Every major loss event lands squarely on RNRC’s balance sheet, and by extension, on the Bank of Russia’s.

The fiscal treadmill of wartime insurance

Nabiullina’s announcement frames this as a stability measure. Without adequate capitalization, RNRC could fail to meet claims obligations, which would cascade through the entire Russian insurance industry. Companies unable to obtain reinsurance would either stop writing policies or become dangerously exposed to single-event losses.

The Bank of Russia is effectively using its balance sheet to absorb the physical costs of war through the insurance system. Every destroyed factory, every damaged oil depot, every wrecked logistics hub eventually becomes a claim that flows through RNRC and lands at the central bank’s door.

The March 2022 capital raise was supposed to prepare RNRC for wartime conditions. Three years later, another $2 billion is needed.

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