The European Bank for Reconstruction and Development (EBRD) and global professional services firm Aon have launched a €110 million Ukraine Recovery and Reconstruction Guarantee Facility.
The initiative aims to address the significant reduction in reinsurance capacity in Ukraine following Russia’s full-scale invasion in February 2022. The facility is designed to support global reinsurance companies with a guarantee covering certain war-related risks underwritten by local Ukrainian insurers.
The facility seeks to leverage existing market infrastructure and established risk transfer mechanisms to provide the protection needed for private-sector investment. By making commercial war risk insurance more accessible, EBRD noted that the initiative is expected to stimulate business activity and support Ukraine’s economic recovery and reconstruction.
Global reinsurer MS Amlin is the first international reinsurance partner to join the platform. The UK-based reinsurer will use the facility to transfer reinsurance exposure off its balance sheet, enabling it to provide war risk cover to Ukrainian insurers.
Local companies INGO, Colonnade, and UNIQA will also participate, using their networks to offer war risk coverage to businesses and SMEs.
The program initially covers inland cargo, motor vehicle damage, and railway rolling stock, with the potential to expand to additional assets as demand evolves. Due to the short-term nature of such policies, the facility can recycle capital, providing coverage for a multiple of the €110 million guarantee.
Estimates suggest that the guarantee could facilitate insurance for up to €1 billion worth of goods and vehicles in transit annually.
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The facility is supported by funding from France, the United Kingdom, Norway, the TaiwanBusiness-EBRD Technical Cooperation Fund, and pledges from the European Union and Switzerland. Additional donor contributions are expected to expand the guarantee over time.
The EBRD and Aon also worked closely with Ukraine’s Ministry of the Economy and the National Bank of Ukraine to ensure the facility aligns with national objectives and complements existing international and government programs.
EBRD president Odile Renaud-Basso (pictured above) described the facility as a key milestone for Ukraine’s economy.
“The EBRD’s guarantee will enable private-sector reinsurers to re-engage on Ukrainian war risk and build a resilient insurance market in Ukraine. This is crucial to giving businesses confidence that their assets are protected, which, in turn, will unlock and accelerate investment in Ukraine,” Renaud-Basso said.
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