Discover how MS Amlin and EBRD are fortifying Ukraine’s war risk insurance market, ensuring stability and resilience in uncertain times.
Lloyd’s global insurer and reinsurer, MS Amlin, has pledged a substantial commitment of up to €110 million in reinsurance capacity over the next five years. This strategic move is designed to bolster war risk policies underwritten by three Ukrainian insurance companies. The initiative is part of a collaborative scheme developed alongside global broking group Aon and the European Bank for Reconstruction and Development (EBRD).
This forward-thinking initiative, known as the €110 million Ukraine Recovery and Reconstruction Guarantee Facility, was unveiled late last year. MS Amlin has effectively activated this innovative reinsurance framework, which holds the potential to offer Ukrainian SMEs up to €1 billion in coverage annually. Initially, the re/insurer has committed €80 million in reinsurance capacity, which will progressively escalate to €110 million over the five-year span, supporting war risk policies underwritten by INGO, Colonnade, and UNIQA, the three participating Ukrainian insurers.
The EBRD supports this scheme, which allows MS Amlin to offload the exposure from its balance sheet. The primary objective is to rejuvenate the war risk insurance market in Ukraine amidst the ongoing conflict with Russia. This landmark reinsurance scheme is anticipated to enable local insurers to start offering inland cargo and transport cover for SMEs.
Typically, these war risk policies are short-term, allowing the facility to recycle capital and potentially extend coverage beyond the initial guarantee amount. According to the EBRD, this facility could safeguard up to €1 billion worth of goods and vehicles yearly, culminating in €5 billion over the five-year period.
The scheme initially covers inland cargo, motor vehicle damage, and railway rolling stock, with the flexibility to expand based on evolving demands. Countries like the UK, France, Norway, and the Taiwan Business-EBRD Technical Cooperation Fund have already pledged initial support. Further contributions are anticipated from the European Union and Switzerland, with expectations of additional donor support to enhance the EBRD guarantee in the future.
Amidst ongoing conflict, this new facility aims to enhance insurance accessibility, thereby stimulating business activity and economic growth. Martin Burke, MS Amlin’s Chief Underwriting Officer, emphasized, “Expanding insurance access is crucial for supporting Ukraine’s SMEs and the broader economy. By addressing the reinsurance gap, this scheme will bolster business confidence, secure supply chains, and drive economic advancement. The facility showcases how specialist insurers can catalyze investment in high-risk regions and underscores the essential role of public-private partnerships in Ukraine’s rebuilding process. Our leadership in this facility aims to attract additional market capacity essential for Ukraine’s long-term reconstruction and recovery.”
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