- Builds on Aon's efforts to support Ukraine's economy, insurance industry and
preparation for reconstruction – representing more than
$465M in public and private capital
for war risk insurance
- New €110 million guarantee scheme through the EBRD to provide
reinsurance capacity for international reinsurers and Ukrainian
insurance companies to cover war related risks in Ukraine
- Supports re-engagement of international reinsurers in the
Ukrainian war insurance market and has attracted market interest
with international reinsurer MS Amlin joined by three Ukrainian
Insurance Companies: INGO, Colonnade and UNIQA
DUBLIN, Dec. 12,
2024 /PRNewswire/ -- Aon plc (NYSE: AON), a
leading global professional services firm, and the European Bank
for Reconstruction and Development (EBRD) have structured a
tailor-made and highly innovative facility supporting the
revitalization of the war risk insurance market in Ukraine. With support from Aon, the EBRD has
launched a new guarantee designed to boost the provision of
reinsurance capacity to private sector insurers, addressing the
ongoing challenges posed by the war.
Under the new €110 million Ukraine Recovery and Reconstruction
Guarantee Facility, the EBRD will support global reinsurance
companies through a guarantee covering losses on specific
war-related risks underwritten by local Ukrainian insurers. The
structure seeks to leverage existing market infrastructure and
tested risk transfer mechanisms from the insurance industry to
provide the protection private sector investors require.
Russia's full-scale invasion of
Ukraine in February 2022 has led to a significant reduction
of reinsurance capacity available to the market, as international
reinsurers have largely withdrawn from Ukraine. This left local insurers considerably
limited in their ability to offer commercial war risk insurance
products. By making war risk insurance more accessible, the
facility will stimulate business activity and economic growth,
paving the way for Ukraine's
recovery and reconstruction.
The first-of-its-kind program is designed as an open platform
that can transact with different insurance market participants that
seek to benefit from the guarantee. The global speciality reinsurer
MS Amlin is the first international reinsurance partner to join the
EBRD facility. The structure allows MS Amlin to transfer
reinsurance exposure off their balance sheet, which enables the
UK-based reinsurer to re-engage with Ukrainian insurers and provide
the much-needed war risk cover.
The Ukrainian insurance companies INGO, Colonnade and UNIQA are
among the first local market participants who will be actively
driving the expansion of the product in the Ukrainian market. Given
their wide distribution network, it is expected that the facility
will enable the provision of war risk coverage to businesses and
small and medium-sized enterprises at scale.
Initially, the scheme will cover inland cargo, motor vehicle
damage, and railway rolling stock, with the flexibility to expand
to a broader range of assets based on evolving market demand. As
such, insurance policies are generally short-term, the facility
will be able to recycle capital and provide coverage for a multiple
of the guarantee amount, depending on the number of policies sold
and the frequency of claims. Based on this approach, the EBRD's
guarantee may insure up to EUR 1
billion worth of goods and vehicles in transit each year,
driving significant economic impact.
The facility is initially backed by France, the United
Kingdom, Norway and
TaiwanBusiness–EBRD Technical Cooperation Fund. Additional donor
support has been pledged by the European Union and
Switzerland. Further donor contributions will enable the
growth of the EBRD guarantee over time.
Moreover, EBRD and Aon have coordinated closely with the
Ukrainian Ministry of the Economy and the National Bank of
Ukraine to ensure the provision of
war risk insurance policies to Ukrainian companies and to further
strengthen the Ukrainian economy. The facility is designed to be
complementary of facilities offered by other international
organizations and the Ukrainian government.
Odile Renaud-Basso, President of
the EBRD, said: "This is a significant milestone for Ukraine and a testament to the EBRD's
unwavering commitment to supporting the country's real economy. 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 is crucial to giving
businesses confidence that their assets are protected, which in
turn will unlock and accelerate investment in Ukraine."
Greg Case, CEO of Aon, said:
"Aon's steadfast commitment to Ukraine compels our firm to continue to
identify new opportunities for businesses to invest in the country
during the ongoing war. 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."
Martin Burke, Chief Underwriting
Officer, MS Amlin, said: "We are proud to support this innovative
solution, providing much needed reinsurance capacity to help the
domestic Ukrainian insurance market rebuild itself and support
local businesses and clients. One could not find a better
expression of our company purpose, providing continuity in
uncertain times, than through our commitment to this scheme."
Yulia Svyrydenko, first Deputy Prime Minister, Minister of
Economy of Ukraine said: "We are
sincerely grateful to the EBRD and all parties involved in
launching this insurance mechanism. The market has been eagerly
anticipating it. 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."
This latest announcement with the EBRD builds on Aon's work over
the last year to support Ukraine's
economy, insurance industry and preparation for reconstruction –
representing more than $465M in public and private capital for
war risk insurance. In June 2024,
Aon worked with the U.S. International Development Finance
Corporation to create a first-of-its-kind insurance
program to support war risk policies for businesses operating
in Ukraine. The firm also called on the (re)insurance industry
to remove blanket exclusions for risks originating
in Ukraine, Russia, and Belarus in order to
help Ukraine's resilience and
catalyze economic growth.
Since February 2022, the EBRD has
deployed €5 billion in Ukraine,
focusing on supporting energy security, vital infrastructure, food
security, trade and the private sector, alongside key policy
reforms. The EBRD's Board of Governors approved in 2023
a capital increase of €4 billion to support investment
both in wartime and reconstruction.
About Aon
Aon plc (NYSE: AON) exists to shape
decisions for the better — to protect and enrich the lives of
people around the world. Through actionable analytic insight,
globally integrated Risk Capital and Human Capital expertise, and
locally relevant solutions, our colleagues provide clients in over
120 countries with the clarity and confidence to make better risk
and people decisions that protect and grow their businesses.
Follow Aon
on LinkedIn, X, Facebook and Instagram. Stay
up-to-date by visiting Aon's newsroom and sign up for news
alerts here.
Media Contact
mediainquiries@aon.com
International: +1 312 381 3024
Toll-free (U.S., Canada and
Puerto Rico): +1 833 751 8114
Logo -
https://mma.prnewswire.com/media/1632623/Aon_Logo_2.jpg
View original
content:https://www.prnewswire.co.uk/news-releases/aon-and-the-european-bank-for-reconstruction-and-development-launch-innovative-war-risk-insurance-facility-for-ukraine-302329564.html
