Ukrainian business will be able to insure against war – how the new EBRD tool works
1 April 11:36
The EBRD (European Bank for Reconstruction and Development) has launched the Ukraine Recovery and Reconstruction Guarantee Facility (URGF), which will allow Ukrainian companies to take advantage of new opportunities for war risk insurance. This is stated on the website of the European Bank for Reconstruction and Development, "Komersant Ukrainian" reports
What is URGF and how does it help business?
The URGF guarantee mechanism, launched by the EBRD in partnership with Aon, allows international reinsurers to return to the Ukrainian market. The EBRD’s line of credit enabled MS Amlin to resume operations by creating a war risk reinsurance chain.
As a result, Ukrainian insurers INGO, Colonnade, and UNIQA began issuing policies for domestic cargo, motor vehicles, and railway rolling stock.
The mechanism provides global reinsurers with guarantees from the EBRD that cover losses from war risks insured by local companies.
Who was the first to benefit?
Agricultural companies were the first to benefit from the URGF. In the first few weeks of operation, the reinsurance coverage amounted to more than EUR 5 million, which indicates high demand.
Policies have already been signed with companies that support critical trade in Ukraine.
MS Amlin was the first reinsurance company to join the program, and three Ukrainian insurers have expanded their offerings thanks to international support.
How the war affected the insurance market
After the full-scale invasion of Russia in February 2022, international reinsurers left Ukraine, leaving local insurers unable to reinsure risks. This led to a sharp decline in access to commercial war risk insurance.
In late 2023, Ukrainian companies began offering limited policies.
Thanks to the partnership with MS Amlin and the EBRD’s support, Ukrainian companies can now offer higher limits of loss, making insurance more affordable and effective for businesses.
How the EBRD’s Underwriting Guarantee Facility works
The URGF is an open platform that allows various insurance and reinsurance companies to offer insurance against war risks. Local companies can approach Ukrainian insurers through their brokers or directly through INGO, Colonnade or UNIQA to issue policies.
The mechanism works in close cooperation with the Ministry of Economy of Ukraine and the National Bank of Ukraine to ensure that the market is properly supported and stable.
Business benefits and economic growth
Through the EBRD’s facility, coverage of up to €1 billion per year will be made available through capital recycling. This will not only help to expand opportunities for war risk insurance, but will also contribute to the development of economic activity and the recovery of enterprises in the war-affected regions of Ukraine.
The program is part of a broader support to the country from international donors such as France, the United Kingdom, Norway and Switzerland, as well as the European Union.
How to use the insurance?
Interested companies can access the policies through local brokers or by contacting INGO, Colonnade or UNIQA. The project was developed in cooperation with the Ministry of Economy and the National Bank of Ukraine, complementing other market initiatives.
Support is provided by France, the United Kingdom, Norway, the TaiwanBusiness-EBRD Fund, as well as the EU and Switzerland, which have pledged additional funding to expand the guarantees.
The EBRD’s role in Ukraine’s economy
Since February 2022, the EBRD has invested more than €6.2 billion in Ukraine, focusing on energy, infrastructure, food security and the private sector.
In 2023, the Bank increased its capital by €4 billion to support investments during the war and post-war recovery. The URGF has been an important step in this process, helping businesses adapt to the war.
