War risk insurance system can start working quite quickly after adoption of relevant bill
After the parliament adopts the bill on the war risk insurance system, this system can start working quite quickly.
According to a message on the National Bank of Ukraine (NBU) page on Facebook, this opinion was expressed by First Deputy Governor of the NBU Kateryna Rozhkova at a meeting with representatives of the American Chamber of Commerce in Ukraine.
She recalled that the bill developed by the National Bank with the participation of experts from the World Bank, the Ministry of Economy and the Ministry of Finance has been in the relevant committee of the Verkhovna Rada since December 2024, and expressed hope for its early consideration.
"Developing a fully functional war risk insurance system is a critically important task for Ukraine in wartime, given the small capacity of the Ukrainian insurance market and limited access to the international reinsurance market," the banker emphasized.
Rozhkova also noted that the key details of the draft law are mandatory insurance of collateral for bank loans and housing construction throughout the entire period of new construction, reconstruction or overhauls, which will contribute to the growth of demand for investment loans, increase the quality of collateral and, accordingly, reduce the bank's risk premium when lending.
If there is a war risk insurance agreement with international companies or specialized state institutions, in particular, ECA, the conclusion of a new agreement under the new law will not be required. In the future, the list of risks that can be insured within the system may be expanded, in particular after the war - to political and climatic risks, risks of man-made disasters, that is, to areas that the market is not ready to take on.
As for domestic insurance companies, Rozhkova noted, they can work with the agency as intermediaries, for which they will receive a fee, or directly as insurers, taking on part of the risk, and will take care of the issues of fixing and assessing losses. Over time, the role of the agency will narrow even more, because the state does not intend to replace the market. The state agency will be able to offer international reinsurers to join the system and package reinsure accumulated risks, because they are not interested in small volumes, and individual companies in the retail segment of the market do not generate large volumes.