The likely huge insurance claims related to the cancellation of aircraft leases in Russia is already leading to “horrendous” hikes in the cost of renewing policies, the chief executive of major lessor BOC Aviation Ltd said on Thursday.

Over 400 leased planes worth almost $10 billion remained in Russia after a March 28 deadline to cancel the contracts in line with Western sanctions over the war in Ukraine, leaving lessors facing heavy potential writedowns or a long insurance battle.

In a trading update on Thursday, BOC said the net book value of the 17 owned aircraft it was in the process of recovering from Russia—net of all cash collateral held in respect of the aircraft—was $589 million or 2.5 percent of its total assets.

All letters of credit held in respect of the aircraft had been successfully drawn, it added.

“Because there are going to be huge claims on these insurances this year for confiscation or theft if the aircraft aren’t given back, this will then have a knock-on effect on insurance costs,” Robert Martin told an aviation conference.

“This is one of the unforeseen circumstances that is going to hit us later this year, and I’m hearing some horrendous numbers for some of the near-term renewals due at the end of March. We fortunately don’t go until January next year.”

The world’s top aircraft lessor AerCap said last week that it had submitted a $3.5 billion insurance claim for more than 100 jets stuck in Russia, the largest exposure in the sector.

BOC’s Martin said the consequences of the battle ahead may force the aviation business to completely rethink how it does insurance and that having too much concentrated on one single market is not healthy.

Martin said BOC had taken out “some” aircraft it manages from Russia. The Singapore-based lessor said on Thursday that one managed aircraft remains in Russia as well as the 17 it owns.

“We will continue to gradually take the other aircraft out. The only way is by negotiation. There is no magic wand, and I feel sorry for our Russian customers; they’ve been put in this situation not because of something they’ve done,” Martin said.

“Whatever doesn’t get resolved will end up in an insurance claim.”

(Reporting by Padraic Halpin; editing by David Evans and Chizu Nomiyama)