Page 96 - UKRRptJul24

provided only by international organizations: the World Bank's International Investment Guarantee Agency (MIGA), the American Development Finance Corporation (DFC), and the Polish agency KUKE. Now, ECAs have joined the list of organizations that are ready to insure investments. Insurance will contribute to creating facilities and infrastructure necessary for developing the processing industry and exporting goods. Since the full-scale invasion, 97 Ukrainian exporters obtained coverage sufficient to execute ₴1.48B in export agreements using ECA insurance. The total volume of supported exports amounted to ₴12.86B ($325M). As a reminder, Unity, the affordable ship insurance program, implemented by Marsh McLennan and Lloyd's of London and the government of Ukraine, extends to all non-military cargo.
Demand for mortgage lending is growing in Ukraine. In April, the indicator increased by 22%. Ukrainian banks issued more than 1,000 mortgage loans worth ₴1.7B, an increase of 21.6% compared to March, the National Bank reports. Most of the deals were concluded on the secondary real estate market.
Life insurance is a potential long-term revenue source for Ukraine's economy. In Ukraine, there is a significant potential for developing a life insurance market, which can become a source of long-term funding for the economy, said the Deputy Head of the NBU, Kateryna Rozhkova. The global ratio of life insurance premiums to GDP is 2.7%. For developing countries, this indicator is 1.6%, while in Ukraine, it remains at 0.08%. "Life insurance premiums in the global market in 2023 accounted for about 41% of the annual total insurance premiums, in Ukraine for the same period the figure is 11.1%," the official said. The NBU, together with market participants, is working on developing a future model for the Ukrainian life insurance market. In Ukraine, this market is represented by only 12 companies working with various accumulative risk products. Cumulative insurance is currently in low demand, and changes in this segment are possible if the economy stabilizes, the capital market is developed, and citizens' well-being improves.
8.1.4 Bank news
The world's largest insurance broker announced an unprecedented $350M war risk insurance program in Ukraine. Insurance company Aon announced the launch of an $350M war risk insurance program in Ukraine during URC2024. It is designed to simplify Ukraine's attraction of foreign investment during the war. The program is implemented together with the US International Development Finance Corporation (DFC) and consists of two parts:
● $50M will reinsure policies issued by qualified Ukrainian insurance companies. The ARX insurance company has become Aon and the DFC’s first Ukrainian partner.
● $300M will insure military risks in health care and agriculture.
"The US government is taking steps to help attract capital to Ukraine's private sector. It is critical to Ukraine's recovery, and we are using our unique tools, especially political risk insurance, to strengthen investor confidence in Ukraine at this critical time," said DFC CEO Scott Nathan.
The DFC announced the creation of an instrument that will provide insurance to investors and small and medium-sized businesses through the reinsurance of Ukrainian insurance companies. The instrument has $50M in
96 UKRAINE Country Report July 2024 www.intellinews.com