Ukrainian companies can now use a new war risk insurance facility to protect up to €1 billion ($1.1 billion) worth of goods and vehicles annually, backed by the European Bank for Reconstruction and Development (EBRD).
Ukrainian insurance companies INGO, Colonnade, and UNIQA are offering war risk policies for inland cargo, motor vehicles, and railway stock, EBRD wrote in a press release.
These policies are backed by the EBRD’s Ukraine Recovery and Reconstruction Guarantee Facility (URGF) and supported through reinsurance contracts with MS Amlin.
“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,” EBRD wrote.
Within the first few weeks, contracts worth more than €5 million ($5.4 million) were signed.
“Policies have been signed with businesses operating in the agricultural sector, sustaining critical trade in Ukraine,” the press release says.
But there’s still enough room for companies – at full capacity, the EBRD’s guarantee could facilitate insurance cover for up to €1 billion ($1.1 million) worth of goods and vehicles in transit each year, according to EBRD.
International reinsurer MS Amlin will return to Ukraine’s reinsurance market thanks to EBRD’s program, which creates a new global reinsurance network to cover war-related risks, the press release says.
Many International reinsurers withdrew from the Ukrainian market after the beginning of Russia’s full-scale invasion, not only because of the war, but also because of foreign currency restrictions that closed payments under reinsurance contracts for Ukrainian companies.
This reduced the ability of local insurers to reinsure their risks and limited offers of commercial insurance products.
By late 2023, local insurers started offering limited war risk policies. Now, with international support, they can provide higher coverage limits and larger total payouts, EBRD reported.
The URGF, managed by Aon, helps global reinsurance companies cover losses from certain war-related risks insured by Ukrainian firms.
Businesses can get war risk insurance through local brokers or directly from INGO, Colonnade, or UNIQA. This project was developed with Ukraine’s Ministry of the Economy and the National Bank of Ukraine and supports other market efforts.
The program is backed by France, the UK, Norway, and the TaiwanBusiness-EBRD Technical Cooperation Fund, with additional support from the EU and Switzerland.
Since February 2022, the EBRD has invested over €6.2 billion ($6.7 billion) in Ukraine, focusing on energy security, infrastructure, food supply, trade, and private businesses.
In 2023, the EBRD approved a €4 billion ($4.3 billion) capital increase to support investments during the war and in Ukraine’s future rebuilding.