Aon and the European Bank for Reconstruction and Development (EBRD) have expanded the Ukraine Recovery and Reconstruction Guarantee Facility (URGF) from €110 million to €150 million, boosting war risk reinsurance capacity that has supported nearly 10,000 policies covering goods and vehicles worth more than €500 million.
Aon said the expansion comes at a critical time for Ukraine, which is facing intensifying Russian attacks on energy, transport, logistics and civilian infrastructure, alongside a renewed blockade of Black Sea ports.
“The attacks have significantly strained Ukrainian businesses and the economy, and adequate war risk insurance is essential for businesses to manage their risks and ensure that their business activity can continue,” the global professional services firm explained.
Through the URGF, which is managed by Aon, the EBRD is providing global reinsurer MS Amlin with a guarantee covering losses on war-related risks underwritten by the local Ukrainian insurers participating in the facility.
Aon noted that this enables the Ukrainian insurers to benefit from reinsurance coverage and expand their war insurance offering.
“Premiums generated by these policies have exceeded claims reported to date, and MS Amlin has not called on the EBRD guarantee – a sign that the insurance market for war risk in Ukraine is functioning well,” Aon added.
With the expansion of the facility, Ukrainian insurance companies UNIVERSALNA (Fairfax Financial Group, Canada) and USG (Vienna Insurance Group) have joined previously announced local market participants INGO, Colonnade and UNIQA in driving the expansion of the product in the Ukrainian market.
Aon said the facility has been expanded to cover the transportation and storage of gas-related assets, while also introducing a new line of business covering inventory held in temporary warehouse storage.
For reference, the scheme already covers inland cargo, motor vehicle damage and railway rolling stock.
The facility is backed by France, the United Kingdom, Norway and TaiwanBusiness–EBRD Technical Cooperation Fund and Switzerland.
Meanwhile, the additional capacity is supported by donor coverage from the European Union under its Ukraine Investment Framework (UIF).
Aon framed the latest announcement as part of its ongoing efforts to support Ukraine. More details and related stories can be found here.
Greg Case, President and CEO of Aon, commented, “With the war continuing to imperil the Ukrainian economy, war risk insurance is central to sustaining investment and building resilience in Ukraine.
“We are proud to welcome UNIVERSALNA and USG to the expanded facility, which has already led to more than €500 million of reinsurance coverage for goods and vehicles across nearly 10,000 policies and will now protect more businesses, while preparing the country for recovery and reconstruction.”
Odile Renaud-Basso, President of the EBRD, said, “The URGF is a critical tool that helps businesses in Ukraine to manage their risk and continue operating in a war environment. We’re pleased to work with our partners to expand the scheme and offer additional support to more companies amidst challenging operating conditions.”
Martin Burke, Chief Underwriting Officer, MS Amlin, added, “Ukrainian businesses continue to trade and invest despite the conflict, driving strong demand for war-risk insurance. Expanding the facility will allow local insurers to meet more of that demand and provide cover across a broader range of commercial risks.
“This expansion is an important step towards building a broader, more sustainable market. Bringing in more reinsurers and additional capacity will be vital to supporting Ukraine’s economic resilience and longer-term recovery.”
Oleksiy Muzychko, CEO of UNIVERSALNA, observed, “We would like to express our sincere appreciation to the EBRD and Aon for their continued support. This initiative is especially important for Ukrainian businesses today, and for the agricultural sector in particular.
“By joining this reinsurance program, we will increase our capacity to provide war risk coverage, enabling more businesses across Ukraine to access the protection they need to sustain operations and contribute to the country’s economic resilience.”
Pavlo Nelga, CEO of USG, noted, “At USG, we strongly believe in the continued resilient development of Ukrainian business, and joining the expanded facility helps us better address current needs in Ukraine. We are grateful to our international partners for their continued support and for upgrading the facility for the Ukrainian insurance market. We look forward to remaining a strong partner in rebuilding the country after the war.”
Peter Höfinger, Deputy CEO of Vienna Insurance Group, said, “The renewed and intensified attacks on Ukraine’s energy, transport and civilian infrastructure underpins the importance of functioning insurance solutions right now.
Businesses need the ability to protect their assets and maintain operations even under these extremely difficult circumstances. Together with our strong partners Aon and EBRD, we are helping to provide additional insurance capacity where it is urgently needed and, at the same time, supporting the resilience of the Ukrainian economy.”
