Aon plc has partnered with the European Bank for Reconstruction and Development (EBRD) to launch an innovative €110 million war risk insurance facility aimed at revitalising Ukraine’s economy amid ongoing conflict. The facility, designed to address the decline in reinsurance capacity caused by Russia’s invasion, will provide support for businesses and small and medium-sized enterprises (SMEs) in Ukraine.
The Ukraine Recovery and Reconstruction Guarantee Facility was structured with Aon’s expertise, a news release noted. It enables the EBRD to provide guarantees to international reinsurers to cover losses on specific war-related risks. The initiative aims to restore confidence in Ukraine’s war risk insurance market, paving the way for increased investment and economic recovery.
International reinsurer MS Amlin has joined the programme, collaborating with Ukrainian insurers INGO, Colonnade, and UNIQA. The facility initially covers inland cargo, motor vehicle damage, and railway rolling stock, with potential expansion based on demand. The EBRD estimates the facility could insure up to €1 billion in goods and vehicles annually by leveraging short-term policies and recycled capital.
The news release highlighted that the program is backed by funding from nations such as France, the UK, Norway, Taiwan, and support from the EU and Switzerland, ensuring the facility’s sustainability and capacity to grow over time.
The news release noted the EBRD and Aon have worked with Ukraine’s Ministry of the Economy and National Bank to align the facility with the country’s needs, building on Aon’s broader commitment. To date, Aon has mobilised over $465 million in war risk insurance capital for Ukraine since February 2022.
“This is a significant milestone for Ukraine and a testament to the EBRD’s unwavering commitment to supporting the country’s real economy,” said Odile Renaud-Basso, president of the EBRD. “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 innovative new facility in collaboration with the European Bank for Reconstruction and Development further enhances the stability of the insurance market in Ukraine and strengthens the foundation for economic resiliency and growth,” said Aon CEO Greg Case.
Since the war began, Ukraine’s insurance market has suffered from reduced reinsurance capacity, limiting local insurers’ ability to offer commercial war risk policies. Ukrainian Deputy Prime Minister Yulia Svyrydenko expressed optimism over this new facility in addressing these gaps: “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. It will help attract investments into 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.”
According to the news release, the facility is part of broader international efforts to assist Ukraine, with the EBRD having allocated €5 billion since 2022 to support energy security, infrastructure, and private sector development. It also aligns with the EBRD’s €4 billion capital increase approved in 2023 for wartime and reconstruction investments.
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