First Ukrainian companies take advantage of new war risk insurance facility supported by EBRD

This article is brought to you in association with EBRD.

• First companies benefit from wider availability of war risk insurance as EBRD’s Ukraine Recovery and Reconstruction Guarantee Facility (URGF) becomes fully operational
• EBRD’s facility enables international reinsurer MS Amlin to re-engage with Ukraine’s insurance market and opens up a new international reinsurance value chain for war risks
• Bank’s partnership with Aon contributes to a well-functioning war risk insurance market and supports economic resilience and recovery

Companies operating in Ukraine are now able to take full advantage of a new war risk insurance instrument, jointly developed by the EBRD and the global professional services firm Aon.

The Ukrainian insurance companies INGO, Colonnade and UNIQA have begun to offer war risk policies backed by the EBRD’s Ukraine Recovery and Reconstruction Guarantee Facility (URGF) for inland cargo, motor own damage and railway rolling stock, following the conclusion of reinsurance contracts with the international reinsurer MS Amlin.

Through the URGF, which is managed by Aon, the EBRD is providing global reinsurance companies with a guarantee covering losses on certain war-related risks underwritten by local Ukrainian insurers.

MS Amlin is the first reinsurer to join the EBRD’s facility, enabling the three Ukrainian insurers to expand their war insurance offering, as they can now benefit from reinsurance coverage from abroad. The scheme has already provided reinsurance coverage totalling more than €5 million in its first few weeks, signalling strong demand for war risk insurance. Policies have been signed with businesses operating in the agricultural sector, sustaining critical trade in Ukraine.

Since Russia’s full-scale invasion of Ukraine in February 2022, international reinsurers have largely withdrawn from the market, leading to a significant reduction in the reinsurance capacity of local insurers. This has left local insurers severely restricted in their ability to offer commercial insurance products, as they have been unable to reinsure their own loss risks. Although local insurers had begun to offer limited policies against certain war-related risks in late 2023, with international reinsurance capacity now backing the issuance of such policies, they are able to offer greater loss limits, and larger aggregates to their clients, which supports wider availability of the product in the market.

The EBRD’s facility is designed as an open platform that can transact with different insurance and reinsurance companies which are seeking to offer war risk insurance. Interested end customers can access insurance policies via their local brokers or by contacting one of the three Ukrainian insurance companies directly. The project complements other market activities and has been developed in cooperation with Ukraine’s Ministry of the Economy and the National Bank of Ukraine.

At full capacity, the EBRD’s guarantee could facilitate insurance cover for up to €1 billion worth of goods and vehicles in transit each year through the ability to recycle capital from generally short-term insurance policies, providing coverage worth a multiple of the guarantee amount. This will make war risk insurance more accessible, stimulate business activity and economic growth, and help to lay the foundations for Ukraine’s recovery.

The facility is backed by France, the United Kingdom, Norway and the TaiwanBusiness-EBRD Technical Cooperation Fund. Additional donor support has been pledged by the European Union and Switzerland. Further donor contributions will enable the EBRD’s guarantee to grow in size over time.

Since February 2022, the EBRD has deployed more than €6.2 billion in Ukraine, focusing on support for energy security, vital infrastructure, food security, trade and the private sector, in addition to key policy reforms. In 2023, the EBRD’s Board of Governors approved a capital increase of €4 billion to support investment in Ukraine, both in wartime and during the subsequent reconstruction phase.