🎈 Up Big Today: Find today's biggest gainers with our free screenerTry Stock Screener

EBRD launches 110 million euro guarantee for Ukraine war-risk insurance

Published 12/12/2024, 04:06 AM
Updated 12/12/2024, 10:01 AM
© Reuters. FILE PHOTO: A general view shows central Kyiv, amid Russia's invasion, Ukraine February 14, 2023. REUTERS/Gleb Garanich/File Photo

By Libby George

LONDON (Reuters) - The European Bank for Reconstruction and Development is launching a 110 million euro guarantee to jumpstart war risk reinsurance for inland transport in Ukraine.

The bank estimates the scheme could facilitate insurance cover for over 1 billion euro worth of goods and vehicles in transit each year - its latest effort to boost Ukraine's economy as it approaches its third year of war with Russia.

The plan, in partnership with Aon (NYSE:AON), aims to get global reinsurance companies, which have largely excluded Ukraine, Russia and Belarus since last year, to guarantee local losses. That would allow Ukrainian insurance companies to get some exposure off their books - and thus offer more coverage.

"This facility should make insurance more accessible," said Francis Malige, EBRD's Managing Director for Financial Institutions, adding that capacity in Ukraine's insurance market is extremely limited. "We are trying to kick start a market here."

EBRD said that international reinsurer MS Amlin would participate in the donor-backed scheme, along with Ukrainian insurance companies INGO, Colonnade and UNIQA.

Malige said the scheme targeted inland cargo, motor vehicle damage and railway rolling stock, as there is capacity to cover it - in contrast with "fixed" assets such as energy infrastructure, which have been frequent targets of Russian attacks.

There is already a scheme backed by the Ukrainian government to cover marine war insurance.

© Reuters. FILE PHOTO: A general view shows central Kyiv, amid Russia's invasion, Ukraine February 14, 2023. REUTERS/Gleb Garanich/File Photo

Other international lenders and governments, as well as Ukranian banks and insurance companies, have tried to develop other war-risk insurance systems, but the elevated, unpredictable risks have meant high premiums - and thus limited uptake.

Malige said that the aim was to help reinsurers understand the risk, and become more comfortable with it, "so that with the same pot of money, we can cover much larger scope of assets in the country."

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.