Highlighting the existence of blanket exclusions in reinsurance contracts for risks originating in the region impacted by the ongoing Russia Ukraine conflict, Aon and Marsh McLennan are jointly calling for their removal.

In a joint statement issued on Sunday, the insurance brokerage firms said the exclusions “ignore the diversity of risk” in the region.

According to the statement, since the start of the war, many global reinsurers have grouped risks originating in Ukraine, Russia, and Belarus together, excluding them from reinsurance contracts, limiting [insurance and reinsurance] capital and impeding economic growth and stability.”

“The inclusion of Ukraine with Russia and Belarus is not rooted in the data and analytics that drive the assessment of risk and overlooks that Ukraine, while under siege, seeks to further align as a free and democratic economy and member of the European Union,” the statement said.

“Marsh McLennan is dedicated in our support of Ukraine—helping it attract global investment to rebuild the country, and recover from the devastating impact of war on its people and economy,” said John Doyle, president and CEO of Marsh McLennan. “We call on the global insurance community to join us in this effort and end blanket exclusions for Ukraine.”

“Aon’s support of Ukraine leads us to look forward to its economic recovery,” said Greg Case, CEO of Aon. “Insurance capital is essential for the reconstruction of Ukraine’s health care, energy and agricultural sectors,” he added. “We’re asking the insurance industry to look closely at Ukraine’s risks and work to strengthen the public-private partnerships under development.”

The statement cited initiatives already in the works, aligning Marsh McLennan and Aon with the Ukraine, U.S. and UK governments and with other international organizations to support Ukraine’s economy as the country endures ongoing attacks, and to accelerate investment in its eventual economic recovery.

• In March, Marsh McLennan announced the expansion of its public-private partnership with the Ukraine government to cover all shipping to and from Ukraine’s ports.
• Marsh McLennan also helped the Ukraine government develop a war risk data platform, providing investors and insurers with granular transparent data on the impact of the conflict.
• In June, Aon worked with the U.S. International Development Finance Corporation to create an insurance program to support war risk policies for businesses operating in Ukraine.

“The availability of insurance for war risk, especially across health care and agriculture, will stimulate economic expansion and employment, while strengthening the foundation of Ukraine’s economy to support a robust reconstruction,” the statement said.

Emphasizing the arbitrariness of exclusions for Ukraine, the brokerage firms said the exclusions “contribute to confusion about the vastly different levels of risk in the country,” suggesting that underwriters should distinguish between regions directly impacted by the war and those that suffered little or no damage in areas of central and western Ukraine. “The use of data and analytics can enable more impactful insights into where insurance capital can contribute to Ukraine’s reconstruction and further economic growth,” the statement said.

Source: Aon, Marsh McLennan