This move is expected to support ARX in expanding its war risk insurance offering and unlock more than $200m in new coverage for static assets in the region. Credit: Mamun_Sheikh/Shutterstock.

US insurer Aon has brokered a transaction on behalf of the US International Development Finance Corporation (DFC) to deliver $50m in political risk insurance (PRI) to aid businesses in Ukraine.  

This reinsurance facility will be extended to ARX, a Ukrainian subsidiary of Fairfax Financial Holdings, to enhance the availability of war risk insurance in the region. 

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It aims to create a portfolio of war risk insurance policies for companies operating within Ukraine.  

This move is expected to support ARX in expanding its war risk insurance offering and unlock more than $200m in new coverage for static assets in the region. 

With the support of DFC’s PRI, ARX will be able to provide more coverage to businesses operating in Ukraine. This is expected to help build investor confidence while reducing investment risk in Ukraine during the ongoing conflict. 

The PRI from DFC is part of a strategy to support Ukraine’s economic recovery and future reconstruction. The agency’s total portfolio in Ukraine amounts to $1.7bn including a $250m loan to strengthen food security and $25m in PRI to assist those injured in the conflict. 

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DFC Investments head Agnes Dasewicz stated: “In collaboration with the private sector, DFC is building investor confidence where it is needed most and mobilising the capital required to strengthen Ukraine’s economy today and into the future. DFC’s political risk insurance is providing vital support to the Ukrainian people and their economy as we work towards a brighter and more prosperous future for the country.” 

Aon CEO Greg Case said: “Aon’s work with the US International Development Finance Corporation is unlocking and accelerating investment in Ukraine at a time when the need is most acute. 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.” 

The development comes shortly after Aon’s introduction of the Florida Flood v3.0 model, certified by the Florida Commission on Hurricane Loss Projection Methodology.