During the EU-Ukraine Investment Conference, the US International Development Finance Corporation (DFC), in collaboration with international insurance and reinsurance broker AON and Ukrainian insurance company ARX, signed an agreement to launch a war risk reinsurance mechanism. 

The agreement was signed following DFC’s announcement at the Ukraine Recovery Conference (URC) in June regarding the creation of a mechanism that would allow DFC to provide insurance not only to investors to attract investments but also to small and medium-sized enterprises by expanding its reinsurance programme for Ukrainian insurance companies. 

“We are grateful for the partnership with the United States and DFC in establishing a mechanism that will scale up war risk reinsurance in Ukraine. DFC has demonstrated real leadership in developing and implementing this mechanism. Most importantly, this insurance is provided through Ukrainian insurance companies that have the relevant knowledge and expertise in underwriting. The launch of the reinsurance mechanism is also an important signal for recovery and attracting investment to Ukraine,” said Oleksii Sobolev, First Deputy Minister of Economy of Ukraine. 

“In collaboration with the private sector, DFC is building trust among investors where it is most needed and mobilising the capital necessary to strengthen Ukraine’s economy today and in the future. DFC’s insurance provides critical support to the Ukrainian people and economy as we work towards creating a brighter and more prosperous future for the country,” said Agnes Dasewicz, Head of Investments at DFC. 

Under the agreement, DFC will act as a reinsurer for ARX, which will issue insurance policies in Ukraine covering risks of physical damage caused by war. The implementation of this DFC mechanism is expected to positively impact the number of private companies participating in recovery projects. DFC is also considering providing additional reinsurance capacity to other Ukrainian insurance companies. The Ministry of Economy, together with the European Commission, is also working on implementing similar mechanisms with other financial institutions.