International actors at the Ukraine Recovery Conference in London in June have signed a statement of intent on cooperating to relaunch the private insurance market in Ukraine, by working jointly with key market and public-sector stakeholders to develop a guarantee facility.

Russia’s war on Ukraine has all but closed this market, yet making insurance available to private investors is key to ensuring resilience in wartime and a successful reconstruction later. Without it, foreign direct investment (and other forms of capital injection) in Ukraine remain stunted.

Likewise, the UK – host of the Ukraine Recovery Conference 2023 – is issuing a statement on insurance, supporting initiatives already under way, including the European Bank for Reconstruction and Development (EBRD) pilot, and setting out guiding principles to inform them.

Insurance is a crucial area of endeavour to support Ukraine’s economic resilience. The latest needs assessment for Ukraine, carried out by the World Bank and partners and published on February 24, showed the country had suffered physical damage of $135bn after a year, and would need $411bn to rebuild over a ten-year period. While international finance to Ukraine thus far has largely been from countries and international organisations, given the enormous needs of reconstruction the private sector will also need to play a major role going forward.

The challenge – as set out by the statement of intent’s signatories, the EBRD, the European Commission, Norway, Switzerland, TaiwanBusiness, the EBRD Technical Cooperation Fund and Ukraine – is providing the right insurance for these private-sector investors.

Agreeing that a public-private partnership approach is necessary to develop the market at the required reasonable scale, the signatories committed to working together to achieve this goal, in line with the principles to be set out in the closing UK statement at the conference. The signatories will explore the possibility of cooperating on establishing a Ukraine Recovery Guarantee Facility, in partnership with leading international private-sector institutions, aiming to facilitate the provision of private-sector insurance against war-related risks in Ukraine. This would initially focus on trade but have the potential to expand to other segments of the insurance market.

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They will also explore leveraging donor support to re-engage Ukraine domestic insurance and reinsurance industries and their global counterparts, as well as creating a platform for dialogue among key public and private insurance market stakeholders to identify further areas where cooperation may be possible.