EBRD Launches €110 Million War Risk Reinsurance for Ukraine

By Libby George

LONDON (Reuters) – The European Bank for Reconstruction and Development (EBRD) is initiating a €110 million guarantee to enhance war risk reinsurance for inland transport in Ukraine.

The bank estimates this scheme could facilitate insurance coverage for over €1 billion worth of goods and vehicles in transit annually. This initiative is part of EBRD's ongoing efforts to bolster Ukraine's economy as the country approaches its third year of conflict with Russia.

In collaboration with Aon (NYSE:AON), the plan seeks to engage global reinsurance companies, which have largely excluded Ukraine, Russia, and Belarus since last year, to cover local losses. This would enable Ukrainian insurers to transfer some risk off their books, allowing them to provide more coverage.

Francis Malige, EBRD's Managing Director for Financial Institutions, stated, "This facility should make insurance more accessible," noting that the capacity within Ukraine's insurance market is very limited. "We are trying to kick start a market here."

EBRD confirmed that international reinsurer MS Amlin would participate in the donor-backed scheme, alongside Ukrainian companies INGO, Colonnade, and UNIQA.

Malige mentioned that the scheme focuses on inland cargo, motor vehicle damage, and railway rolling stock due to available capacity, unlike "fixed" assets such as energy infrastructure, which have been frequent targets of Russian attacks.

Currently, there is a government-backed scheme in Ukraine for marine war insurance.

Despite efforts from other international lenders, governments, and Ukrainian banks and insurers to establish additional war-risk insurance systems, high premiums resulting from unpredictable risks have limited participation.

Malige emphasized the goal of helping reinsurers better understand and become comfortable with the risk, stating, "so that with the same pot of money, we can cover a much larger scope of assets in the country."