Fitch Ratings said most of the claims would be directed at the Lloyd's of London insurance market, which writes a substantial portion of the world's aviation policies.
More than 500 internationally owned jets leased to Russian operators have been trapped in the country since aviation sanctions were introduced following the country's invasion of Ukraine.
Experts have warned there could be years of potential litigation between aircraft owners and insurers should Russia seize the jets in retaliation for Western sanctions and against President Vladimir Putin's regime.
"We believe total insurance claims could be as high as $10 billion in a worst-case scenario, which would be by far the largest annual claims in the history of aviation insurance," Fitch said. "Even in such a scenario, we believe most insurers and reinsurers would suffer only a hit to earnings, rather than capital depletion, and we would not expect material ratings implications," the ratings agency added.
Fitch said there might be "rare exceptions" among specialized Lloyd's insurers, where a combination of aviation claims with other large losses could lead to modest depletion of capital levels.
The ratings agency added that a more realistic loss estimate was likely to be around $5 billion to $6 billion.
The New York-based company said losses were still dwarfed by the $30 billion that insurers have paid out globally in coronavirus-related claims, or the $100 billion hit companies took for natural catastrophes in 2021.
Putin signed off on a new law last week that would allow Russian aircraft operators to retain foreign-owned planes for use in the domestic market, where the lessors have canceled contracts because of the sanctions. Investment bank Berenberg said at the time that the development "raises the risk of the jets being potentially unrecoverable."
--Editing by Joe Millis.
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