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լ�и��� McLennan was instrumental in developing the Black Sea Unity Facility, which became available in November 2023 and provides affordable insurance to cover grain shipments from Ukraine through the Black Sea in a heightened risk environment. The facility was needed after war risk insurance premium per voyage rose to unaffordable levels in the summer of 2023, with significant consequences for the humanitarian supply of grain to Africa and other regions, as well as on Ukraine’s economy.

Unity has since been expanded to cover ships carrying any cargo.

The project is a public-private partnership with the Ukraine government. Coverage includes ships, crews, and protection and indemnities from non-sanctioned nations trading to and from Ukraine, and transit on the Black Sea corridor and Danube River.

Estimates show that the opening up of the Black Sea corridor has led to a 7% increase in Ukraine’s GDP and has reduced insurance premiums to below pre-war levels.

Unity received the International Flagship Project Award during the 2024 Ukraine Recovery Conference in Berlin for its innovative approach to restoring insured marine trade in the Black Sea.��

We have provided pro-bono support to the Ukrainian government to create the War Risk Data Platform, providing the data needed for assessment and modelling of war risks in Ukraine. The platform gives investors, insurers, and governments access to granular war risk data to enable both assessment of individual risks and portfolio-wide strategy setting.

The platform aggregates data from the Ukraine government and shows, by location and time, a breakdown of events, including damage level. It also provides information on event type, such as an airstrike or UAV attack, and object type, such as energy or infrastructure.

The platform’s creation sprang from the difficulty within the insurance market to accurately assess risk in different parts of Ukraine, which left even specialist war-risk insurers unable to operate effectively in the market. Without available and affordable insurance, private investment at scale will not happen. The platform can also be used by governments to make informed judgements on travel advice.

Live since October 2023, the platform had more than 550 authorized subscribers by mid-2024. Among its findings: approximately 66% of Ukraine had been untouched by war-related incidents since February 22, 2022, and the violence has been concentrated on the front lines.

We have been supporting the UK and Ukrainian governments in scoping options for war-risk insurance, which was a key input to the London Conference Framework announced by Prime Minister Rishi Sunak in 2023.

We have proposed the establishment of an innovative, multinational war-risk pool that we believe is required to enable the recovery and reconstruction of Ukraine at scale.

Currently there is virtually no war-risk insurance available to provide cover for investments or property in Ukraine. The insurance industry – in Ukraine or elsewhere – has never habitually covered war-risks at anything approaching the scale required.

At the present time, the key risk in question – war – is ongoing – which presents a challenge for the insurance industry: the analogy being that you cannot insure your house when it is already on fire. Even once the current ‘hot’ phase of war has ended or significantly diminished, an elevated degree of risk will remain in the eyes of private (re)insurance markets for a number of years.

The market alone cannot provide a solution. Our proposal is for the creation of a war-risk pool, enabled by provision of a backstop by G7+ governments, that will create the conditions for the functioning of the conventional property insurance market.

This is analogous to the types of public-private partnerships developed by a number of G7 countries for various perils including terror risk – although on a larger scale and a novel multi-lateral basis.

լ�и��� McLennan continues to work to develop additional insurance resources in other areas, including (as of mid-2024):

Aviation insurance: ��Developing affordable commercial aviation insurance for flights to and from western Ukraine.

Travel insurance: Along with aviation insurance, affordable travel insurance for business travelers is crucial for further investment in Ukraine’s recovery and business development.��

Energy insurance: Working to create a war risk insurance facility to cover replacement energy assets to enable Ukraine to address its energy crisis ahead of the winter months.��

Our լ�и��� colleagues in Kyiv have continued to support clients and insurers in Ukraine even as the war is ongoing.

Our colleagues swiftly mobilized in response to the humanitarian crisis, raising $1.4M dollars to support the people of Ukraine, hosting refugees in their homes and finding refugees opportunities for employment.