In Ukraine, work began on the creation of the State Agency for War Risk Insurance. Appropriate bill No. 12372 “On the system of military risk insurance” was developed by a group of deputies, including Andriy Motovylovets, Maryana Bezugla, Andriy Klochko, Halyna Tretyakova, Yaroslav Yurchyshyn and others.
The authors of the draft law emphasize the need to introduce mechanisms that will ensure the protection of property interests of citizens, businesses and state objects from the consequences of military risks. As of January 2024, direct damage to Ukraine’s infrastructure due to hostilities exceeded $155 billion, and reconstruction costs reached $486 billion. At the same time, Ukraine still does not have a comprehensive system for covering such risks.
Many countries around the world have specialized institutions or insurance pools to cover war and terrorist risks. For example, Pool Reinsurance Company Limited operates in Great Britain, which provides reinsurance for terrorism risks, and in Australia, the ARPC Terrorist Pool has been created to insure risks with the participation of the state.
In Ukraine, war risk insurance is still limited and available only to a small number of customers, mostly through property insurance and motor vehicle insurance contracts. The main obstacles to the development of such insurance are the limited opportunities of the Ukrainian insurance market, the difficulty of reinsurance of war risks at the international level, and the high level of military and political risk in Ukraine.
The Ukrainian Export Credit Agency (ECA) already provides insurance and reinsurance against military and political risks for investments in infrastructure and industrial projects. Similar services are provided by international institutions such as MIGA (Multilateral Investment Guarantee Agency) and the American DFC Corporation. In 2023, risk insurance mechanisms for investments in the processing industry and exports were introduced on the basis of EKA.
