Faced with the war in Ukraine and the withdrawal of major international reinsurers, the European Bank for Reconstruction and Development (EBRD) decided to launch a guarantee program to support Ukrainian insurance companies. Objective: to enable local and international companies to ensure their activities despite the risks of war.
A response to a paralyzed market
Since the Russian invasion of February 2022, international reinsurers have largely withdrawn from Ukraine, despite total aid of 5.4 billion euros from Bred. This withdrawal has made it almost impossible for local insurance companies to cover risks like land transportation or industrial vehicles. Consequence: exports and foreign investments are in free fall.
To remedy this, the Bairdin partnership with the British broker Aonproposes an innovative mechanism. Financed by France, the United Kingdom, Norway and supported by Switzerland and the European Union, it allows Ukrainian insurers to transfer part of the risks to foreign reinsurers. This guarantee primarily targets the transport of goods by landTHE motor vehicles and the railway equipment.
Francis Maligedirector for financial institutions at the EBRD, underlines: “We identified a need, particularly for people who are shipping goods to Ukraine and need their rail cars and trucks insured. » Thanks to this device, the EBRD hopes to cover up to 1 billion euros worth of goods and vehicles each year.
Reviving investments in Ukraine
This guarantee program represents a strategic lever to revive private investments in Ukraine. By securing economic activities, this guarantee fund aims to enable local businesses and SMEs to resume their activities, and foreign investors to return to the Ukrainian market.Odile Renaud-BassoPresident of the EBRD, emphasizes the importance of the initiative: « The mechanism will help build a resilient insurance market in Ukraine and unlock and accelerate investments in the country. »
With the support of local insurers such as INGO, Colonnade and UNIQA, the guarantee will be distributed on short contractsthe aim being to facilitate its reuse for a greater volume of activities. Francis Malige, Director of Financial Institutions at the EBRD, specifies: “ The system is demand-driven. It will be able to grow and evolve according to market needs, because the reconstruction of Ukraine will not be a linear process. » By focusing on land transport and essential infrastructure, this EBRD program aims to respond to specific needs, and to revive Ukraine's logistics and industrial chains as quickly as possible.
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