The first insurance projects against military and political risks have already begun to be implemented in Ukraine
The first insurance projects against military and political risks have already begun to be implemented in Ukraine thanks to cooperation with international financial organizations and national export credit agencies of partner countries, First Deputy Prime Minister – Minister of Economy of Ukraine Yuliya Svyridenko reported, according to the ministry’s website.
In her column for the American think tank Atlantic Council, she noted that the World Bank’s multilateral investment guarantee agency MIGA issued a policy to a company specializing in commercial real estate investments in Ukraine.
At the same time, it is clarified that the company is investing in the construction of an industrial park in Lviv M10 on an area of 140,000 square meters. m, which occupies six sites for production and warehouse premises and provides for 3 thousand new jobs. The company received guarantees against the risks of war and civil unrest for ten years in the amount of up to $9.1 million. Of this, $4 million is provided by the donor countries of the Trust Fund for the Support of the Reconstruction and Economy of Ukraine (SURE Trust Fund) managed by MIGA.
National export credit agencies (ECA) also contribute to the implementation of military and political risk insurance. Thus, the Polish export credit insurance corporation KUKE will insure investors who are interested in the restoration of Ukraine. For more than a year, KUKE was the only insurance organization in the EU that provided guarantees for the sale of goods to Ukraine. Thanks to this, exports from Poland to Ukraine increased by almost 55% last year.
“We see active work in the direction of war risk insurance by the American International Development Finance Corporation (DFC), which is ready to consider also insuring the investments of Ukrainian investors. Currently, they are working on several applications for the insurance of Ukrainian projects in the amount of approximately $200 million. Provide support the governments of the G7 and G19 countries, the European Commission, the World Bank and export credit agencies of other countries are also ready in the field of insurance of investments against war risks in Ukraine,” the First Deputy Prime Minister notes.
According to Svyridenko, participation in political risk insurance for the work of their companies in Ukraine has already been confirmed by the export credit agencies of Germany, France, Italy, Great Britain, Sweden and Japan.
Recently, the German federal government decided to provide Ukraine with export credit guarantees, also known as Hermes Cover. This expands coverage and supports exporters working with Ukraine. Also, the French state insurance company Bpifrance Assurance Export announced that it will insure French companies that are ready to invest in Ukraine and take an active part in the reconstruction of the country, without waiting for the end of the war.
In addition, the European Bank for Reconstruction and Development (EBRD) is working on the formation of a fund and attracting donor funding to it. “The creation of the fund will contribute to the activation of the local insurance market covering property and trade risks, and we hope that it will be operational by the end of 2023,” the head of the Ministry of Economy noted.
She also emphasized that for the domestic market of Ukraine, it is planned to expand the powers of its own export credit agency through the adoption of a draft law that will enable EKA to insure business not only against economic risks, but also against risks related to hostilities or other crimes of Russia.
“As long as state-funded programs provide much-needed insurance coverage, the key goal remains to restore the international reinsurance market in Ukraine. For this to happen, it is important to change the perception of Ukraine as a “solid red zone” with many risks. One of the options for this is the creation of a special trust fund for launching global insurance and reinsurance of war risks. It could be managed by the governments of partner countries together with Ukraine,” Svyridenko emphasized.