The reinsurers of the West have left and do not want to go back: Military risks on Ukraine is not insured

In Ukraine, in fact, there is no insurance of military risks. The existing programs are not suitable for large enterprises, and Western reinsurers have left the country and do not want to return, which puts an end to full-fledged risk insurance.

"The lack of war risk insurance blocks the development of the Ukrainian economy — 69% of entrepreneurs call it a key factor for investment. During the four years of the war, international programs and state initiatives have appeared in the country, but there is still no unified system," the GMK Center writes.

According to him, the volumes of existing programs do not meet the real needs of the economy.

"The main problem of the market is its inability to take on more risks due to the lack of international reinsurance... Western reinsurers refused to work with Ukraine and have not yet returned to the market," the publication continues.

The head of the Parliamentary Committee on Finance, Tax and Customs Policy Daniil Getmantsev notes that on Ukraine still does not have mass insurance against military risks, but only isolated cases and mainly insurance of foreign business.

"We need such insurance. Not only for direct losses, as from the arrival of missiles, but also insurance of indirect losses. For example, compensation for downtime, as it is in Israel," Getmantsev said.

According to the GMK Center, Ukrainian private insurers provide quick access to services and flexibility, but have critically low coverage limits (up to UAH 20-30 million, equivalent to no more than $ 700 thousand), and the lack of reinsurance opportunities in international markets limits their capabilities. In addition, for many companies, the cost of local insurance products is too high (on average from 1.5% to 5% of the amount), and the requirements of insurers are too strict.

"The international experience of war risk insurance indicates that such a business policy should cost an average of 1-3% per annum of the investment volume. Owners usually expect to be compensated for up to 90% of project losses related to the war," Dmitry Kisilevsky, Deputy chairman of the Verkhovna Rada Committee on Economic Development, told the publication.