The challenges of the Ukrainian economy are related to the lack of insurance and it is already obvious that this hinders the attraction of investors, who first of all think about the protection of their capital.
This opinion was expressed by the US Special Representative for Ukraine’s Economic Recovery Penny Pritzker at the Ukraine Recovery Conference (URC2024) in Berlin on Wednesday.
“We all understand: in order for private investors to come in, insurance is needed. This is the first thing an investor thinks about,” she said.
According to Pritzker, she and her team took this as a call to action It was seconded by the US-based Development Finance Corporation (DFC) and global reinsurance broker Aon, which found practical innovative solutions to the issue. DFC already provides an insurance product designed for SMEs.
“We have purposely built an insurance model that is scalable. However, for this sector to flourish in Ukraine, many players are needed. I will encourage other insurance organizations, international institutions to think how they can join this model. I am confident: this mechanism will bring to Ukraine the necessary capital for its economic growth both when there is a war and when there is peace and reconstruction begins,” she emphasized.
According to DFC Executive Director Scott Nathan, before the war the corporation had a large portfolio in Ukraine, including risk insurance. Currently, to support the private sector and the country’s economy, one of the important toolkits in its portfolio is political risk insurance, which has closed $350 million worth of arrangements for three contracts in agriculture, manufacturing and education over the past year.
“Together with our partner ARCS, we as DFC can provide $50 million in war risk insurance, air raid risk, etc. to different clients. These can be small policies that can go to larger policies,” he noted.
At the same time, Nathan said that projects are being developed with Aon that can be scaled. One such project will be announced soon.
“Practically, we are helping local insurance companies build capacity for the country. Insurance is a mechanism to mobilize capital in the country and we hope to offer such an innovative tool. This is just the beginning, just part of our joint efforts to invest in Ukraine’s future, to lay the foundation for future investments when its recovery and reconstruction begins. It is important for the economy to work every day already now, during the war, and for this we need to build capacity in the insurance market. This is the key to success,” he said.
According to Aon President Erik Andersen, it is very important to provide protection by Ukrainian insurance companies, as well as to have a mechanism of pooled resources to provide insurance in the health care system, for small businesses, etc.,” he said.
“What we are saying is that we wanted to participate and invest our capital through the DFC, through local insurers. We have been working in Ukraine for a long time, it’s a big insurance program, and we want this capital to go to companies that operate in the country,” he said.
State Enterprise Antonov (Kyiv) announced a tender for mandatory aviation insurance services for civil aviation on May 31.
Namely for civil aviation risk insurance services (under insurance classes 1, 5, 11): aircraft insurance, aviation carrier’s liability insurance for damage caused to passengers, baggage, cargo and mail; liability insurance of commercial civil aircraft operator for damage caused to third parties.
As well as insurance of the liability of developers, manufacturers of civil aviation equipment, maintenance organizations authorized to conduct test flights for damage caused to third parties; insurance of the liability of an educational institution in the performance of training flights for damage caused to third parties. Insurance of aircraft crew members and other aviation personnel; insurance of persons who have the right to be on board an aircraft on legal grounds without purchasing tickets; insurance of employees of the customer of aviation works, employees of other organizations involved in the performance of aviation works, and persons ensuring the technological process during the performance of aviation works.
According to the message on the website of the Ukrainian Universal Exchange, the expected cost of the purchase of insurance services is UAH 5.607 million, the cost of submitting a bid is UAH 4.08 thousand.
Documents are accepted until 17:00 on June 7.
State Aviation Enterprise “Ukraine” (Boryspil, Kyiv Region) on May 24 announced a tender for insurance of liability of the operator of a civil aircraft of commercial aviation for damage caused to third parties and liability of an air carrier for damage caused to passengers and luggage; aircraft insurance.
According to the message in the electronic public procurement system Prozorro, the tender was announced for the insurance of aircraft crew members, other aviation personnel and persons entitled to be on board the aircraft legally without purchasing tickets.
The expected value of the insurance services purchase is UAH 26.674 mln.
The amount of security for contract execution is 5% of the value of the procurement contract.
The deadline for submission of tender offers is June 1
As reported, the only participant in a similar tender announced on April 22, 2024 was “Ukrainian Fire Insurance Company” (UPIC Kiev) with a proposal of UAH 26.665 million, with an expected cost of UAH 26.674 million. However, on May 22, the company’s offer was rejected.
State Enterprise Ukraine was established to organize, provide and perform air transportation, special flights of the highest official delegations of Ukraine and other states within the country and beyond its borders in compliance with the requirements and rules stipulated in the relevant regulations.
civil aviation, INSURANCE, RISKS, State Enterprise Ukraine, TENDER
On May 21, the Ministry of Foreign Affairs of Ukraine announced a tender for voluntary insurance of motor vehicles and compulsory insurance of civil liability of owners of land vehicles, according to the electronic state procurement system Prozorro.
The expected cost of purchase of services is UAH 342,898 thousand.
The deadline for submission of tender documents is May 29.
AUTO, INSURANCE, MINISTRY OF FOREIGN AFFAIRS, TENDER, UKRAINE
From mid-May, the Austrian Ministry of Finance and the Austrian export credit agency OeKB (Oesterreichische Kontrollbank Aktiengesellschaft) will start accepting applications for export and investment insurance in Ukraine at the expense of a special fund for Ukraine created by the Ministry of Finance in OeKB through the budget law.
According to the Austrian agency’s press release, it is expected that EUR500 million will be allocated to cover operations in Ukraine over the next five years, and the attraction of funds from international financial institutions could make it possible to receive up to EUR1 billion.
“Approximately EUR100 million per year is earmarked for new business. This will also open up opportunities for Austrian exporters in the process of Ukraine’s recovery,” the Ministry of Finance said in a release.
It is indicated that as part of the existing and proven export promotion procedure, the Ministry of Finance is already facilitating export transactions worth EUR 3-5 million in Ukraine with payment terms of up to three years through OeKB.
It is noted that since funds are limited and the goal is to achieve a wide diversification of risks, in particular in the supported sectors, small and medium-sized public sector transactions based on a state guarantee will be possible at the first stage.
“This will allow us to make vital investments for Ukraine. These include the supply of drinking water and heat, the provision and rehabilitation of the transport sector with roads, bridges and rail infrastructure, as well as supply agreements and investments such as joint repair shops for buses, trams and trains,” commented Finance Minister Magnus Brunner.
On May 15, the state enterprise Delta-Lotsman (Mykolaiv) announced a tender for voluntary insurance of liability to third parties for maritime accidents caused by the fault of marine pilots, pilot-operators of the insured’s vessel traffic control service in the performance of their official duties.
According to the electronic public procurement system ProZorro, the expected cost of the service is UAH 1.171 million. The tender security is an electronic guarantee of UAH 35 thousand.
The deadline for submission of bids is May 24.
SE “Delta Pilot” was established by order of the Ministry of Transport of Ukraine in 1998 in order to improve conditions for ensuring safety of navigation, protection of human life at sea and the environment, in the territorial sea of Ukraine in accordance with the requirements of international agreements and conventions, streamlining the structure of marine pilot services in the north-western part of the Black Sea.
