The Ukrainian government is working to create a War Risk Reinsurance Fund to encourage private investment into the country even before the war with Russia ends, Economy Minister Yulia Svyrydenko said.
The fund, to be created with international financial institutions and other foreign partners, is meant to help attract large private reinsurance firms and international insurers to the Ukrainian market to increase the availability of war-risk coverage in the country, the minister said in a news release.
“One of the main tasks of the Government this year is to support the private sector of the economy without waiting for the end of the war," she said. "Together with our international partners and financial institutions, we are working on the creation of the War Risk Reinsurance Fund, which will help bring large private reinsurers, and international and Ukrainian insurance market operators to the market."
Svyrydenko made the comments after a meeting with Hiroshi Matano, executive vice president of the World Bank's Multilateral Investment Guarantee Agency (MIGA) Hiroshi Matano, which she said has already carried out four war-risk insurance projects in Ukraine.
MIGA last month provided $9.1 million of war-risk insurance for the construction and operation of a warehouse and supporting infrastructure in the western city of Lviv. The insurance, for UIPH Ukrainian Industrial Property Holding Limited of Cyprus, covers the risk of war and civil disturbance for up to 10 years.
She added that the government is working with MIGA to set up a "working group to speed up and optimise the process of investor insurance."
“It is extremely important to change the perception of Ukraine as a continuous high-risk zone," Svyrydenko said. "One potential solution is to create a special trust fund aimed at launching global insurance and reinsurance of war risks. This fund could be jointly managed by the governments of partner countries in cooperation with Ukraine."
So far, war-risk insurance offerings to back the reconstruction of Ukraine have been sporadic but increasing, with involvement by foreign governments and multilateral institutions in recent months.
In October, the German government agreed to provide war-risk insurance to building materials manufacturer Fixit to open a factory in Ukraine, the Dutch government earmarked 60 million euros to insure Dutch companies helping rebuild Ukraine and
Ukrainian Prime Minister Denys Shmyhal also said last month that France, Japan, Italy and Sweden have also committed to offering war-risk insurance for their nations' companies and the US plans to do so.
