- 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: 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.
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SOURCE Aon plc