- Comprehensive $50M reinsurance facility will enable U.S. International Development Finance Corporation to reinsure war-related risks and advance insurance capacity in Ukraine
- Aon and U.S. DFC collaborated on additional $300M in war risk insurance for Ukraine’s health care and agriculture industries
- U.S. Special Representative for Ukraine’s Economic Recovery Penny Pritzker instrumental in galvanizing public and private sector support
DUBLIN, June 12, 2024 /PRNewswire/ — Aon plc (NYSE:) (NYSE: AON), a leading global professional services firm, announced a $350M, first-of-its kind insurance program with the U.S. International Development Finance Corporation to build insurance capacity and accelerate new capital investment and economic recovery in Ukraine.
As one of the largest global brokers operating in Ukraine, Aon coordinated a comprehensive $50M reinsurance facility, working closely with DFC and the Ukraine Ministry for Development of Economy and Trade to support the active and ongoing issuance of on-the-ground war risk policies to businesses operating in Ukraine. Aon and DFC collaborated on an additional $300M in war risk insurance specifically designed for Ukraine’s health care and agriculture industries.
“Capital will not go where it is not protected and this unprecedented program with the U.S. International Development Finance Corporation is intended to unlock and accelerate investment in Ukraine at a time when the need is most acute,” said Eric Andersen, president of Aon, at the Ukraine Recovery Conference in Berlin. “This groundbreaking facility will enable the local insurance industry to appropriately price risk and draw much needed new capital into Ukraine, while creating capacity and capability in the country to support reconstruction.”
DFC will act as the reinsurer for qualified insurance companies issuing policies in Ukraine and use its balance sheet to assume $50M of war-related reinsurance risk in Ukraine. The facility builds upon two well-established DFC models: on-lending, which guarantees loans made by local banks in Ukraine to facilitate lending to priority geographies and sectors; and insurance underwriting, especially for war and political risk. The additional $300M of capacity in war risk for Ukraine’s health care and agriculture sectors highlights the robust demand for accessible, affordable war risk insurance by private companies operating in Ukraine that will only increase during reconstruction.
“The U.S. Government is taking steps to help drive capital to the private sector in Ukraine,” said DFC CEO Scott Nathan at the Ukraine Recovery Conference. “The private sector is critical to Ukraine’s recovery, and we are leveraging our unique tools, especially political risk insurance, to build investor confidence in Ukraine at this critical moment.”
The first firm to be certified as a qualified Ukrainian insurance company to access the reinsurance facility is ARX, a Ukrainian subsidiary of Fairfax Financial. Aon, DFC and ARX will work together to build a portfolio of war risk insurance policies for companies operating in Ukraine and support ARX in expanding its war risk insurance offering in the country. With the facility in place, qualified insurance companies can select to provide rapid, on-the-ground war risk policies to businesses operating in Ukraine. In the long-term, this facility can encourage private market participation in Ukraine by other reinsurers, promoting a foundation of private investment that will be essential to a recovery.
The announcement follows the September 2023 appointment of former Commerce Secretary Penny Pritzker to lead the U.S. government’s response to the war in Ukraine as the U.S. Special Representative for Ukraine’s Economic Recovery. In this role, Special Representative Pritzker convened the private sector, multilateral banks and businesses operating in Ukraine to mobilize support for the Ukrainian economy and has been instrumental in advancing the work of Aon and the DFC to mobilize the insurance industry to bring $350M in private capital to support Ukraine’s economy and recovery.
“As we looked for opportunities to support the Ukrainian economy, we recognized that a robust insurance market was essential to attracting investment in the country,” said Pritzker. “This facility and the infusion of new private capital into Ukraine will help local businesses operate in the country today, while preparing Ukraine for reconstruction and further economic growth.”
About Aon
Aon plc (NYSE: AON) exists to shape decisions for the better ” to protect and enrich the lives of people around the world. Through actionable analytic insight, globally integrated Risk Capital and Human Capital expertise, and locally relevant solutions, our colleagues provide clients in over 120 countries and sovereignties with the clarity and confidence to make better risk and people decisions that protect and grow their businesses.
Follow Aon on LinkedIn, X, Facebook (NASDAQ:) and Instagram. Stay up-to-date by visiting Aon‘s newsroom and sign up for news alerts here.
Media Contact
mediainquiries@aon.com
Toll-free (U.S., Canada and Puerto Rico): +1 833 751 8114
International: +1 312 381 3024
