Aon, in partnership with the European Bank for Reconstruction and Development (EBRD), has introduced a facility aimed at addressing war risk insurance in Ukraine. This initiative seeks to provide critical reinsurance capacity to private sector insurers dealing with war-related challenges.
- EBRD launches €110 mn guarantee scheme to provide reinsurance capacity to cover war-related risks in Ukraine
- Bank’s partnership with Aon supports re-engagement of international reinsurers in the Ukrainian war insurance market
- International reinsurer MS Amlin and Ukrainian insurance companies INGO, Colonnade, and UNIQA to participate in the scheme
- Donor contributions, including from France, the UK, Norway and the TaiwanBusiness-EBRD Technical Cooperation Fund, make war risk insurance more accessible. Other donors, including the European Union and Switzerland, are in advanced negotiations.
The €110 mn Ukraine Recovery and Reconstruction Guarantee Facility guarantees losses on specific war-related risks underwritten by local Ukrainian insurers. The EBRD will support global reinsurers by leveraging established market infrastructure and proven risk transfer mechanisms to facilitate private sector investments.
Aon’s commitment to Ukraine drives us to create new opportunities for businesses to invest during the ongoing war. This collaboration with the EBRD strengthens Ukraine’s insurance market, fostering economic resilience and growth
Greg Case, CEO of Aon
The program operates as an open platform, allowing diverse insurance market participants to benefit from the guarantee. MS Amlin, a specialty reinsurer, became the first international reinsurance partner in the facility. By transferring reinsurance exposure off its balance sheet, MS Amlin has re-engaged with Ukrainian insurers to offer war risk coverage.
Local insurers, including INGO, Colonnade, and UNIQA, are spearheading the facility’s adoption in Ukraine. These companies aim to expand war risk coverage for businesses and small to medium-sized enterprises (SMEs) through their extensive networks.
We are proud to support this innovative solution, providing much needed reinsurance capacity to help the domestic Ukrainian insurance market rebuild itself and support local businesses and clients.
Martin Burke, Chief Underwriting Officer at MS Amlin
One could not find a better expression of our company’s purpose, providing continuity in uncertain times, than through our commitment to this scheme.
Since February 2022, the EBRD has deployed more than €5.4 billion in Ukraine, focusing on supporting energy security, vital infrastructure, food security, trade and the private sector, in addition to key policy reforms.
Yuliia Svyrydenko, first Deputy Prime Minister and Minister of Economy of Ukraine, said: “It will help attract investment to the Ukrainian economy and serve as a signal to other market players that new insurance mechanisms can and should be implemented, as there is clear demand from the private sector.”
We are sincerely grateful to the EBRD and all parties involved in launching this insurance mechanism. The market has been eagerly anticipating it. I am confident that this mechanism will provide much-needed support for small and medium-sized businesses, which have been severely affected by the war.
Yuliia Svyrydenko, first Deputy Prime Minister and Minister of Economy of Ukraine
Initially, the facility covers inland cargo, motor vehicle damage, and railway rolling stock. Its flexibility enables expansion to additional asset categories based on market needs.
Short-term insurance policies allow capital recycling, potentially insuring up to €1 bn worth of goods and vehicles in transit annually, depending on claim frequency and policy volume.
France, the United Kingdom, Norway, and the TaiwanBusiness–EBRD Technical Cooperation Fund have provided initial backing. Additional support from the European Union and Switzerland is expected, with future donor contributions poised to expand the facility’s capacity.
The initiative aligns with efforts by the Ukrainian Ministry of the Economy and the National Bank of Ukraine. It complements other programs by international organizations and the Ukrainian government to bolster war risk insurance availability and economic stability.
The Russia-Ukraine war significantly reduced reinsurance capacity as international reinsurers withdrew from Ukraine. Local insurers faced constraints in offering commercial war risk insurance products. This facility aims to bridge that gap by enhancing reinsurance capacity and supporting local insurers.
Aon had previously announced a $350 mn war and political risk insurance program to stimulate capital investments and economic recovery in Ukraine.
This included a $50 mn reinsurance facility in partnership with the U.S. International Development Finance Corp. (DFC) and an additional $300 mn program targeting health care and agriculture industries in Ukraine.
These combined efforts represent a strategic approach to rebuilding Ukraine’s economy through innovative insurance solutions and international collaboration.
