Tomas Fiala’s Dragon Capital Group was the first to register its project — the M10 Lviv Industrial Park — for an insurance guarantee from the World Bank’s Multilateral Investment Guarantee Agency (MIGA). The insurance is to start soon.

Stay updated with the latest news by following us on X (Twitter)

Since the start of the full-scale war in Ukraine and by June business asset losses are estimated at USD 11.4 billion, with at least 426 large and medium-sized private enterprises and state-owned companies damaged or destroyed due to Russian aggression, according to the Kyiv School of Economics (KSE).

The number may in fact be significantly higher, since there is currently no information on facilities in Ukraine’s temporarily occupied territories. In addition, the companies suffered significant losses due to Russia’s blowing up of the Kakhovka hydroelectric power station, forcing businesses to relocate or shut down operations in the affected area.

Prospects for insurance

The Ukrainian government started discussing a war risk insurance mechanism, which would cover both foreign and domestic investors, a year ago. To create military insurance products, Ukraine began looking for trust funds and other appropriate instruments.

As early as March 2023, first deputy prime minister Yulia Svyrydenko said that the testing of war risk insurance products by MIGA, part of the World Bank Group, and other global players was underway. She called active war risk insurance a key issue for trade, investment, and the implementation of recovery projects.

By April, the National Bank of Ukraine (NBU) had developed a concept for creating a system of military and political risk insurance, which was to become the basis for the respective draft law.

According to the concept, the first stage will see the launch of a transitional model for a quick start of political and military risk insurance. It is based on the key proposals of the US Agency of International Development (USAID) to create a fund with the participation of international partners and donors.

At the second stage, a long-term and fully-fledged domestic system of political and military risk insurance, or the Military Insurance Pool of Ukraine, will be established. Its purpose is to accumulate funds for future payments and centralised reinsurance of risks in the international market.

In May, the Verkhovna Rada adopted in the first reading the draft law on insurance of investments in Ukraine against military risks. Two months later, the parliamentary committee on finance, taxation and customs policy gave the green light for the draft law to be passed in the second reading.

The draft law allows Ukraine’s Export Credit Agency (ECA) to insure against military risks the investments of Ukrainian and foreign companies in Ukraine. To that end, additional budget funds should be allocated. At the same time, the ECA can attract external funds from institutions such as the European Bank for Reconstruction and Development (EBRD) to increase its authorised capital. Currently, the ECA’s authorised capital is only UAH 2 billion.

Earlier, in January, the NBU Board adopted a resolution on licensing of the ECA and "conditions for conducting Insurance activities".

The ECA was established back in 2018 to promote the export of goods and services of Ukrainian origin by insuring and providing guarantees under contracts that ensure the development of exports.

If the aforementioned draft law is passed by the Ukrainian parliament and signed by the president, this goal may be changed — that is, instead of insuring direct investments from Ukraine, the ECA will also insure direct investments in Ukraine against "risks that may be caused by armed aggression, hostilities and / or terrorism".

However, this will apply only if such investments are "directed to the creation of facilities and infrastructure necessary for the development of the processing industry and export of goods or services of Ukrainian origin".

The draft law does not specify the mechanism of such insurance, leaving the job to the government and the National Bank.

Since it was established, the ECA has carried out only 98 insurance contracts.

Scepticism and realities

Maksym Oryshchak, an analyst at the Centre for Exchange Technologies, a consultancy, believes that the system of insurance against military and political risks would not be able to exist during a full-scale war.

"The very essence of insurance is to protect against something that is unlikely to happen. And if an insured event does occur, it will be too rare for the insurer to be able to pay out of the funds accumulated in the insurance premium fund," Mr Oryshchak tells

"This means that even if insurance companies do decide to provide such services in a time of war, the cost of this insurance will be so high that it will actually become a barrier. Businesses will not be able to afford to pay for such insurance for a long time — from three to six months, depending on the industry."

The options where part of the insurance premiums can be subsidised by the state or the options of creating a state fund to subsidise part of the insurance payments depend on the state’s solvency, Mr Oryshchak says, adding its cannot be guaranteed in times of war.

"Someone might say that in this case, a state guarantee to insurance companies can be written into the law. But again, the purpose of war is usually to change the military and political leadership of a country.

"So, for insurance companies, especially foreign ones, all this could end in the cancellation of the law with state guarantees if another political group comes to power."

However, the military and political risk insurance mechanism may make sense after the war in Ukraine is over and Kyiv receives security guarantees from NATO, China, or other countries, the analyst believes — warning there will still be risks of local military clashes, terrorist attacks, and much more.

"Then providing businesses, including foreign ones, with state subsidies to insure military and political risks can really work. Such a decision will remove some of the barriers that will hinder investment in Ukraine's economic recovery after the war," Mr Oryshchak explains to

Dragon Capital Group is the first Ukrainian applicant for the MIGA insurance guarantee. The group wants to obtain a USD 10 million insurance guarantee for the construction project of the M10 Lviv Industrial Park.

In a statement to, the group declined to reveal the details, saying it expects the insurance process to start soon.

"Then, we will issue a statement where we will be able to tell you all the details".

The total amount of guarantees issued by MIGA’s Support to Ukraine's Reconstruction and Economy Trust Fund (SURE TF) currently stands at EUR 40.85 million. MIGA’s total insurance portfolio is estimated at approximately USD 13 billion with investments in more than 160 countries.

The Framework on War Risk Insurance was launched at the Ukraine Recovery Conference in London in June, where representatives of Ukraine's partner countries supported the idea of the MIGA trust fund and promised to provide funds for it.

It is expected that by the end of the year, MIGA will be able to insure projects in Ukraine worth up to USD 1 billion. The insurance can be applied for here.

The European Bank for Reconstruction and Development (EBRD) has also started developing a pilot war risk insurance scheme for Ukraine. It has created a separate trust fund, with several countries already agreeing to contribute to it, and the European commission providing its guarantees. The goal is to raise at least USD 300 million.

"This fund will also be available to reinsurers. Since it is conditionally free, the money will be paid only for the EBRD’s administration," Oleksandr Hryban, an adviser to the Ukrainian economy minister, told Ukrinform news agency.

"This will trigger the entire insurance market. Such a mechanism should be in place by the end of the year."

The US International Development Finance Corporation (DFC) has also announced its readiness to finance Ukrainian business and insure foreign investment in Ukraine. The publicly announced resource is USD 1 billion. Prior to that, the DFC provided support only to American investors who invested in various countries around the world. The US government also supports investment insurance for the Ukrainian economy through the US Agency for International Development (USAID Ukraine).

Special funds for Ukrainian investment insurance have been created by such countries as the UK, Japan, Germany, France, Canada, Australia, Israel, Poland, etc.

For instance, the UK government’s export credit agency, UK Export FInance (UKEF), has allocated GBP 200 million to insure political and military risks for British investors considering investing in Ukraine. Marsh McLennan, a consultancy, will work on the programme. At the London Recovery Conference, its representatives said that the war risk insurance scheme should be available on an unprecedented scale and will be backed by the UK government.

The German economic ministry provides insurance coverage through the Investment Guarantee Scheme, administered by the international audit firm PricewaterhouseCoopers. Poland provides investment insurance for Polish companies in Ukraine through its export credit agency KUKE.

The cost of investment insurance against war risks depends on a number of factors, including the size and nature of the investment, the level of risk, and the coverage desired. In general, the cost of insuring investments against war risks is expressed as a percentage of the total investment and can range from 0.5 to 5 percent, or more.