The coverage program is designed to support capital investment and economic recovery in the country
Aon and the US International Development Finance Corporation are collaborating to offer a $350 million war insurance program meant to help Ukraine with capital investment and economic recovery.
The program is in two main parts
The program includes $300 million in coverage for the healthcare and agriculture sectors in Ukraine, and another $50 million in war insurance, that is, additional coverage for the insurers providing protection there.
The reinsurance strategy was designed in a partnership with the Ukraine Ministry for Development of Economy and Trade, said a recent statement released by Aon.
Protecting businesses against damaged property with war insurance
The war insurance coverage also helps to provide businesses with coverage for damage to their properties resulting from military conflict. This program is viewed as highly important to Ukraine’s economy as coverage is difficult to obtain in the region due to the Russian invasion.
Large insurers from western countries have widely withdrawn from providing coverage in Ukraine since Russia’s invasion in February 2022. This has made it difficult and very risky for businesses in the country to operate.
The hope for a rapid improvement
Those behind the program are hopeful that with the announcement of the reinsurance, there will be a quick change in attitude by other insurers who will return to the area under the protection of the war insurance.
“We’re very hopeful that our announcement today of reinsurance…will lead immediately to some other deals with local insurers,” said CEO Scott Nathan of the Development Finance Corporation in a recent Reuters report, having spoken to that publication while attending a Ukraine investment conference that took place in Berlin.
According to Nathan, there has been a substantial recovery in the Ukrainian economy, but there remains a “very challenging” situation in place for companies that seek to operate there.
Insurers have wanted to return to the region, but in the absence of their own protection, they have felt forced to abstain, as the risk was too high.
Brokers aside from Aon, such as Willis Towers Watson, had been attempting to fill the coverage gap. That broker announced a partnership in May in which it was collaborating with VUSU, a Ukrainian insurer, to provide coverage for cargo transportation on land within Ukraine. That coverage was headed by Markel, a Lloyd’s of London syndicate.
