ARX, FortuneGuard, McGill and Partners Launch War Risk Insurance With Limits of Up to $50 Million

ARX, Ukraine’s leading insurance company and a member of the Canadian Fairfax Financial Holdings group, has launched war risk insurance for commercial real estate and investments in Ukraine. 

It will provide coverage of up to $50 million per risk, creating the product in collaboration with an insurtech participant in Lloyd’s Lab FortuneGuard and a top Lloyd’s broker McGill and Partners, the company’s press release said on Thursday. 

“Until now, insurance has primarily covered mobile assets, such as cargo via the grain corridor, or small and micro-businesses, while medium and large enterprises and investors had limited options to protect their assets.” 

ARX will calculate rates for insurance using AI-based analytics to assess risks, considering attack history, damage, and proximity to critical infrastructure, the company said. 

The product covers risks of damage from drones, missiles, and debris from air defense systems.

ARX has been working in the war insurance niche over the last year and a half, gaining experience on how to handle the product. 

“We have also gained experience in handling claims for ‘Iron Dome’ property insurance product against war risks (recently, the first claim of Hr.14 million ($333,333) was paid – compensation for damage caused by a drone to a private enterprise),” the statement quoted First Deputy CEO and Management Board Member of ARX IC JSC Maksym Mezhebytsky. 

Other Topics of Interest

How Poland’s Trade with Russia Undermines EU Sanctions and Support for Ukraine

Polish officials have struggled to rein in companies that are suspected of sanctions-busting, according to economic watchdog reports.

Hamish Greenwood, Partner and Head of Crisis Management at McGill and Partners said that ARX products would be aimed at local businesses so that they could afford to pay for protecting their assets from war risks. 

“Before this product, only multinational corporations could afford such coverage, leaving local businesses virtually unprotected,” said Greenwood, as per the press release. 

ARX is one of the leading retail insurance companies on Ukraine’s market. Its net income is estimated at Hr.287.5 million ($6.8 million) for three quarters of 2024, according to the statistics of Ukraine’s central bank, the National Bank of Ukraine. This is the third highest net income result for the same time period compared to other players on the market.

The European Bank for Reconstruction and Development (EBRD) and leading professional services firm Aon launched a bank guarantee designed to reinsurance capacity to private-sector insurers in Ukraine. The plan should cover internal domestic cargo, motor vehicle damage and railway rolling stock.

The insurance was launched as a tool for the new €110 million Ukraine Recovery and Reconstruction Guarantee Facility.

War insurance saved Ukraine’s vital shipping route for exporting grain, though global insurers should stop “blanket” exclusion of Ukraine’s market, Senior Marsh McLennan partner told Kyiv Post previously in an interview.

Marsh McLennan, a global leader in risk management services, is now negotiating coverage for potential civilian flights from Ukraine once the sky is safer. 

Ukraine is working on broader war insurance – the National Bank of Ukraine, the Ministry of Economy and the Ministry of Finance presented the draft Law of Ukraine “On the System of Military Risk Insurance” to create a solution for this issue.