McGill and Partners, a global specialty insurance and reinsurance broker, in partnership with FortuneGuard, a Lloyd’s Lab InsurTech, and Ukrainian insurer ARX has introduced a new war risk reinsurance facility to provide commercial property coverage in Ukraine. The initiative aims to address a critical insurance gap in the war-torn country, supporting its economic recovery.
This facility applies AI technology to analyze official data on projectiles fired into Ukraine. This data-driven approach enables more accurate risk assessments, resulting in competitive premiums without compromising responsible risk management.
War Risks require action from the Reinsurance Industry to help improve resilience.
The groundbreaking facility demonstrates the insurance industry’s commitment to supporting Ukraine’s economic recovery and resilience in the face of ongoing conflict.
Key improvements:
- Stronger headline: More impactful and attention-grabbing.
- Enhanced clarity: More concise and easier to understand.
- Focus on key benefits: Highlights the importance of the initiative for Ukrainian businesses.
- Improved flow: More natural and engaging reading experience.
- Added context: Briefly explains the challenges faced by businesses in obtaining war risk insurance in Ukraine.
Steve McGill CBE, CEO of McGill and Partners, highlighted the importance of the insurance industry in Ukraine’s recovery.
As Ukraine continues to navigate the devastating impacts of war, this facility delivers essential protection for businesses operating in high-risk areas. It marks a significant step in supporting the country’s economic regrowth
“By applying AI and comprehensive data sets, we’ve been able to offer scalable reinsurance capacity at an accessible premium, providing critical coverage where it’s most needed”, Steve McGill CBE says.
Since the start of the Russia`s War in Ukraine, the global reinsurance industry has been working to help those affected by the conflict: deploying our resources in support of the humanitarian response, our solidarity in support of the global sanctions regime, and our expertise through risk advice and in force cover.
The facility offers coverage of up to $50 mn per risk and will initially target businesses located more than 100 km from the front lines. ARX, a leading Ukrainian insurer, will issue quotes this month. There are plans to expand the program to additional insurers in the future.
Addressing a Critical Gap in the Market
Since the war’s onset, international reinsurers have largely withdrawn from providing war risk coverage for commercial properties in Ukraine. Until now, local insurers offered only limited coverage with small policy limits. This new initiative directly addresses the lack of comprehensive war risk protection.
A year and a half ago, such coverage seemed impossible. We’re proud to partner with McGill and Partners to bring this product to market. It shows the international insurance community’s growing recognition of the need for war risk protection in Ukraine
Maksym Mezhebytskyi, First Deputy Chairman of ARX
He added that ARX’s experience over the past 18 months has helped shape the product. “We hope this facility inspires similar developments and attracts more insurers and reinsurers to the Ukrainian market.”
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.
Supporting Economic Recovery with Advanced Technology
The program represents a breakthrough for businesses and investors in Ukraine, providing coverage that was previously unavailable.
Offering policy limits of up to $50 mn, this initiative is a game-changer. It provides affordable, scalable coverage, giving businesses the confidence to continue operations and rebuild despite ongoing conflict.
Oleksii Omelianchuk, CEO of FortuneGuard
Developed with input from Lloyd’s experts, the facility secures critical assets and strengthens investor confidence in Ukraine’s commercial sector. It reflects the insurance industry’s commitment to supporting Ukraine’s economic recovery and long-term resilience.
The scale and scope of the war’s impacts point to the central role that must be played by the global insurance industry in responding. Insurance is a core part of a resilient society, providing protection when the worst happens and preparation for the risks that may lie ahead – so the products and services provided by the sector must be sufficient for the challenge ahead (see How to Russia’s War in Ukraine is Changing the World).
In the aftermath of the war in Ukraine, therefore, building resilience against current and emerging risks is essential. The insurance industry has a formidable toolkit at its disposal to help organisations build that resilience, whether through the swift payment of claims to keep businesses afloat; removing risks from company balance sheets to reduce their exposure to the crisis; or providing advice on risk mitigation and management to ensure they are prepared for a range of outcomes.
Ukraine War Risk Facility
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.
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.
On 24 February 2022, Russia invaded Ukraine in a major escalation of the Russo-Ukrainian War, which started in 2014. The invasion, the largest and deadliest conflict in Europe since World War II, has caused hundreds of thousands of military casualties and tens of thousands of Ukrainian civilian casualties.
As of 2024, Russian troops occupy about 20% of Ukraine. From a population of 41 mn, about 8 mn Ukrainians had been internally displaced and more than 8.2 mn had fled the country by April 2023, creating Europe’s largest refugee crisis since World War II.
FAQs: Ukraine War Risk Reinsurance Facility
The facility is a war risk reinsurance program designed to provide commercial property coverage in Ukraine. It addresses a critical gap in the market by offering scalable coverage for businesses operating in high-risk areas affected by war. The initiative supports Ukraine’s economic recovery by ensuring businesses have access to essential insurance protection.
The facility was launched by McGill and Partners, in partnership with FortuneGuard, a Lloyd’s Lab InsurTech, and Ukrainian insurer ARX. The European Bank for Reconstruction and Development (EBRD) and specialty reinsurer MS Amlin are also supporting similar war risk insurance initiatives in Ukraine.
The facility leverages AI technology from FortuneGuard to analyze official data on projectiles fired into Ukraine. This data-driven approach enables more accurate risk assessments, helping insurers offer competitive premiums while managing risks responsibly. The use of AI improves underwriting accuracy and enhances insurers’ ability to provide scalable coverage.
The facility provides coverage of up to $50 mn per risk. Initially, it will target businesses located more than 100 kilometers from the front lines. Ukrainian insurer ARX will start issuing quotes, and there are plans to expand the facility to include more local insurers in the future.
The facility fills a critical gap in the reinsurance market by providing war risk coverage that was previously unavailable in Ukraine. Since the war began, international reinsurers largely withdrew from offering war risk insurance for commercial properties. This new facility provides businesses with the protection they need to continue operating and investing in Ukraine, which is essential for economic recovery and resilience.
Since the start of the war, local insurers in Ukraine have faced significant constraints in offering war risk insurance products. The global reinsurance industry largely withdrew from the Ukrainian market, leaving businesses with limited options and small policy limits. The new facility addresses these challenges by providing enhanced reinsurance capacity and scalable solutions for local insurers.
The facility demonstrates that the insurance industry is committed to supporting Ukraine’s recovery. Initiatives like the EBRD’s €110 mn guarantee scheme also help reduce the risks for international reinsurers by guaranteeing losses on war-related risks. These programs use proven risk transfer mechanisms to facilitate private sector investments and encourage global reinsurers to return to the Ukrainian market.
