We strive to develop a unified strategy for insuring military risks that would provide maximum coverage as soon as possible: Oleksii Sobolev

A wide range of issues related to war risk insurance were discussed during a coordination meeting between teams from the Ministry of Economy, Environment and Agriculture led by Minister Oleksii Sobolev, the National Bank of Ukraine, led by NBU Governor Andriy Pyshnyy, and representatives of the insurance market.

There are already products on the market that cover war risks. The total reinsurance capacity, formed thanks to the support of partners, in particular Lloyd's (USD 400 million), DFC (USD 200 million), EBRD (EUR 110 million), as well as thanks to the growth of the Ukrainian market itself (up to USD 350 million), has reached over USD 1 billion. This allows us to offer insurance products to cover war risks for property, cargo, motor vehicles and rolling stock.

A state compensation model is also already in place, implemented by the Export Credit Agency of Ukraine, and the Government is constantly working to make it more convenient and useful for businesses. Since 1 January, 19 companies have expressed their desire to participate in the state programme. Of these, 15 have submitted applications for compensation for losses in frontline territories, and four have concluded insurance contracts against military risks in other regions of Ukraine (where the state intends to reduce the insurance rate to 1% for amounts up to UAH 1 million).

Therefore, as discussed during the meeting, further development of the sector requires a comprehensive approach.

"We have a common goal — to move from spot solutions that are already working on the market to the development of a comprehensive unified architecture with insurance products that are accessible to everyone. We want to develop a single insurance strategy as quickly as possible that would ensure maximum coverage for all businesses and investors, and to enshrine it in law," said Oleksii Sobolev, Minister of Economy, Environment and Agriculture of Ukraine.

At the meeting, a concept for a three-tier system was presented and agreed upon, which should cover the needs of both small and medium-sized businesses and large investors:

• The first tier consists of state programmes with minimal costs, which are most suitable for those areas and risks where market mechanisms do not work.
• The second level consists of hybrid products, where the market and the state can jointly guarantee coverage through co-financing or compensation.
• The third level consists of commercial products without state participation.

As noted, the advantage of the presented model lies in the inclusion of the state in the process of insuring risks where market mechanisms do not work: in frontline territories, in certain areas, etc.

The participants of the coordination meeting agreed on the presented model. Following the meeting, the parties decided to continue cooperation on the issues raised.