Aon's $350M War Cover Scheme Boosts Ukrainian Businesses

Insurance broker Aon has taken a significant step towards supporting Ukrainian businesses by unveiling a $350 million war cover scheme in partnership with a US development agency. The scheme aims to provide protection against war risks, a crucial move to bolster the country's wartime economy and pave the way for reconstruction efforts. War risk insurance plays a vital role in safeguarding businesses from losses incurred during conflicts. However, following Russia's full-scale invasion more than two years ago, foreign insurers and reinsurers had withdrawn from offering such coverage in Ukraine. This move left many businesses vulnerable and in need of financial protection. The collaboration between Aon and the US development agency presents a lifeline for Ukrainian companies, enabling them to secure crucial protection against war risks. The initiative not only supports businesses but also aligns with Kyiv's broader objective of attracting foreign investors back to the country. Aon's president, Eric Andersen, emphasized the significance of this initiative, highlighting its potential to encourage local insurers to provide war risk policies to businesses nationwide. This development is particularly timely as Ukraine seeks to mobilize investments for its estimated $1 trillion reconstruction effort. The $350 million scheme comprises a $50 million reinsurance facility, with the US International Development Finance Corporation acting as the reinsurer to local Ukrainian insurers. This enables them to offer war risk policies to businesses, with notable participation from insurers like ARX, a Ukrainian subsidiary of Canadian insurer Fairfax Financial. Additionally, $300 million of war risk cover has been allocated for projects in the healthcare and agriculture sectors. The unveiling of this scheme at a two-day Ukraine recovery conference in Berlin underscores the country's determination to secure aid and investments, particularly for its energy sector. The involvement of key figures like US special representative Penny Pritzker and Ukraine's deputy economy minister Taras Kachka highlights the collaborative nature of this initiative. As Ukraine navigates its path towards economic recovery, the introduction of the war cover scheme represents a pivotal moment for the country's private sector. By fostering a robust insurance market and attracting private capital, Ukraine is positioning itself for sustainable growth and resilience in the face of ongoing challenges. The scheme not only provides immediate support but also lays the groundwork for a more stable and secure future, ensuring that businesses can thrive even in the midst of uncertainty. With resilience and innovation at its core, Ukraine is forging ahead towards a brighter economic horizon, supported by strategic partnerships and proactive initiatives like the Aon-led war cover scheme.