Broker insurtech partnership launches Ukrainian commercial property reinsurance facility

Specialty (re)insurance broker McGill and Partners has launched a war risk reinsurance facility for Ukrainian commercial property in partnership with Lloyd’s Lab insurtech FortuneGuard. 

The new proposition utilises artificial intelligence (AI) to enhance the understanding and underwriting of commercial property risks in the East European state, with analysis of official data on projectiles fired into the country from Russia that assesses the likelihood of war damage.

It is hoped that this data can then be used to support risk presentation and underwriting, with live data risk monitoring intended to offer more affordable premiums to Ukraine-based businesses.

McGill and Partners has also partnered with Ukrainian insurer Arx to allow £40m ($50m) to be offered per risk, with reinsurance capacity provided by London market and Lloyd’s syndicates, although coverage can only be provided for properties located more than 100 kilometres from the front line. 

In a statement, the broker said that it was motivated to set up the facility because, since the outbreak of the war on 24 February 2022, the “international reinsurance market has largely withdrawn from providing capacity for war risk reinsurance in Ukraine”.

Devastating impacts 

Steve McGill, chief executive and founder at McGill and Partners, said: ”As Ukraine continues to navigate the devastating impacts of war, we recognise the significant role of the insurance industry in supporting Ukraine’s economic regrowth.

“Providing critical coverage for businesses in Ukraine, the launch of this groundbreaking facility marks a significant milestone in supporting Ukraine’s economic recovery and resiliency.

“By harnessing the power of AI and comprehensive data sets, we have been able to take a more informed approach to presenting and underwriting risk. This approach has enabled us to deliver scalable reinsurance capacity at an accessible premium, adding critical coverage for businesses that were largely unprotected.”

Oleksii Omelianchuk, founder and chief executive at FortuneGuard, added: ”This historic facility is a game changer for Ukraine’s commercial sector and investors.

”It provides coverage that was previously unavailable in the market and, by leveraging cutting-edge AI-driven analytics, local expertise and comprehensive data, we can provide affordable and scalable coverage for businesses and investors operating in Ukraine.

”Developed with input from Lloyd’s experts, this initiative not only secures assets but also provides the confidence businesses need to continue operating and rebuilding in these challenging times.”