Happy Wednesday - What insurance news are we missing? Send tips to. “It will be a public-private partnership.” “That’s the ‘24 challenge,” Ellison said. Marsh and others in the insurance sector estimate it would take around $500 million of public funding to get going.
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The financial demands further illustrate the pressure for a government-funded buffer to make it work for private insurers. Just do the math on a cargo ship taking fire versus a large passenger airplane. What’s next? Ukraine President Volodymyr Zelenskyy wants to open up airspace, and so the focus is on how to insure commercial aircraft in western Ukraine. “That’s facilitating about 8 percent of Ukraine’s GDP. “Initially it was just for ships carrying grain, but we aim to soon agree on an expansion of the program to cover all commercial shipping including steel, iron ore, other products,” he said. The impact, according to Ellison, “is suddenly you have affordable insurance for up to 1,000 ships.” To help mitigate the costs to insure ships, Marsh put together an arrangement where the Ukraine government contributed money to a first-loss fund to back up insurance claims. “The private sector will not initially on its own insure this sort of war,” Ellison said.Ī recent example is the effort to insure grain shipping through the Black Sea.
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The other big catalyst is securing public money to help backstop insurers and make them more willing to operate in Ukraine. Strikes are divulged according to the month they occurred, and the service has around 350 users. The database has revealed that 66 percent of the 1,470 local governments in Ukraine have not had a single explosive incident since the invasion two years ago, according to Ellison. Marsh helped launch a war-risk data platform in November that gives insurers, investors and governments an unclassified window into the scope of the conflict. Treasury Secretary Janet Yellen said Tuesday that finding a way to unlock the funds is “necessary and urgent.” and its allies tap into $285 billion of frozen Russian central bank assets. The latter demand – funding a government buffer to shore up insurers – may hinge on the extent to which the U.S. Two big takeaways stood out in our discussion: Data and public financial support will be key to insuring Ukraine’s infrastructure and investment. And you’ll start to bring in other investors and other insurers as you build confidence.” And then as they get more confident the high-risk investor will invest in slightly higher-risk projects. “At the moment, you want high-risk investors to come to Ukraine and invest in low-risk projects,” Ellison said. Marsh is working with Ukraine’s government on a pro-bono basis.
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Ellison said there’s very little of it available after the industry lost about $8 billion on the invasion.
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MM recently sat down with Crispin Ellison, partner at the consultancy Oliver Wyman, to talk about the lead role his firm and parent company Marsh McLennan are playing to help draw insurance capital back to Ukraine. In addition to finding hundreds of billions of dollars to pay for it, another critical piece of the puzzle will have to be solved: Luring back insurers in the middle of a hot war. How to finance Ukraine’s reconstruction is in focus as the world marks two years since Russia’s invasion. The POLITICO Pro platform combines the news you need with tools you can use to take action on the day’s biggest stories. Editor’s note: Morning Money is a free version of POLITICO Pro Financial Services morning newsletter, which is delivered to our subscribers each morning at 5:15 a.m.