Ukraine turns uninsurable war risk into investment opportunity
Verkhovna Rada’s finance committee chair Danylo Hetmantsev announced the program on Sunday, building on previous warnings from officials that “the lack of coverage for military risks is a significant obstacle to attracting investors for Ukraine’s reconstruction and economic development,” as former deputy economy minister Oleksiy Sobolev, now Ukraine’s minister of economy, environment, and agriculture, noted last year.
The plan splits coverage into two tracks: direct state compensation for war damage in frontline areas through Ukraine’s Export Credit Agency, and premium subsidies elsewhere to make insurance affordable for businesses and households.
As Hetmantsev’s announcement suggests, Ukraine is ready to solve the insurance conundrum with state backing, following successful smaller programs that have already proven the concept works.
How Ukraine plans to make war-risk insurance work
Frontline zones: The Export Credit Agency will directly compensate damaged property in the highest-risk areas near active combat through a claims-based system.
Safer regions: The government will subsidize insurance premiums across the rest of the country, making commercial coverage affordable for both Ukrainian businesses and foreign investors.
The program still needs legislative amendments to expand the Export Credit Agency’s mandate and a Cabinet decision on budget allocation. Hetmantsev described the costs as “moderate” but provided no specific figures.
“This was a challenging path. Thanks to the Cabinet of Ministers and NBU for constructive cooperation, and I expect final decisions,” he wrote on social media.
Ukraine’s war-risk experiments show promise
Ukraine isn’t building this system from scratch.
The country has been testing war-risk coverage in targeted sectors with impressive results.
Maritime success: The Unity facility, built with Marsh, Lloyd’s, and Ukrainian state banks, drove down war-risk rates for Black Sea shipping and expanded in March 2024 to cover all non-military cargo.
International backing: The World Bank’s MIGA expanded political-risk insurance for Ukraine in 2024, while broker Aon and the US Development Finance Corporation unveiled a $350 million scheme for Ukrainian businesses earlier this year.
Private market entry: A London-backed reinsurance program launched this year, offering property coverage—but only for assets more than 100 kilometers from the front lines. This shows how distance-to-combat still shapes pricing.
What investors have been waiting for
The new system aims to unify these fragmented pilot programs into comprehensive rules that private insurers and international reinsurers can price against. According to Oleksiy Sobolev, the goal is to create “a single pool, clear rules, and ultimately the ability to attract international reinsurers to this market.”
The original concept, developed last autumn by Ukraine’s National Bank, Ministry of Economy, and Ministry of Finance, envisioned financing through mandatory insurance payments and international donor support.
Coverage would protect against physical war damage, with mandatory insurance initially covering mortgaged property and residential construction projects.
The investment math that matters
If Ukraine can deliver predictable budget support and attract international reinsurer participation, the program could shift investment calculations from “uninsurable” to “expensive but manageable”—unlocking bank lending and foreign direct investment far beyond the maritime corridor.
However, the program’s scale and speed will determine whether this becomes a genuine turning point or just another limited pilot in a market still fundamentally priced for war.
The legislative timeline, budget envelope size, and reinsurer participation remain unclear.
Ukraine’s approach builds on proven models—the Unity shipping facility demonstrated that strategic state participation can dramatically reduce private market pricing while attracting commercial capital. The question is whether Ukraine can scale this from ships to the entire economy while the war continues.
For international investors who have spent three years watching Ukrainian opportunities from the sidelines, the program represents the missing piece that could finally make the risk calculable rather than simply unacceptable.