Aon and the European Bank for Reconstruction and Development have expanded the capacity and scope of a war risk insurance facility for Ukraine as it faces intensifying attacks from Russia.

The size increases to €150 million ($241 million) from €110 million ($176 million), and cover will be added for transportation and storage of gas-related assets and inventory goods in temporary warehouse storage.

The Ukraine Recovery and Reconstruction Guarantee Facility, managed by Aon, was announced two years ago and already covers inland cargo, motor vehicle damage and railway rolling stock.

The European Bank for Reconstruction and Development arrangements support global reinsurers through a guarantee for losses on war-related risks underwritten by Ukrainian insurers.

The additional capacity, supported by donor funding from the EU under the Ukraine Investment Framework, allows insurers INGO, Colonnade and UNIQA to offer more war risk cover. 

Two additional Ukrainian insurers, USG, which is part of Vienna Insurance Group, and UNIVERSALNA, part of Fairfax Financial Group, will join.

Aon says Ukraine is enduring intensifying Russian attacks on energy, transport, logistics and civilian infrastructure, along with the renewed blockade of Black Sea ports.

“With the war continuing to imperil the Ukrainian economy, war risk insurance is central to sustaining investment and building resilience in Ukraine,” the broking giant’s president and CEO Greg Case said.

The facility has led to more than €500 million ($802 million) of reinsurance coverage for goods and vehicles across nearly 10,000 policies to date.

MS Amlin, the first reinsurer to join the scheme, is renewing its €80 million ($128 million) participation and providing additional reinsurance capacity, taking its total support to €130 million ($208 million).

“Ukrainian businesses continue to trade and invest despite the conflict, driving strong demand for war risk insurance,” MS Amlin chief underwriting officer Martin Burke said.

“Expanding the facility will allow local insurers to meet more of that demand and provide cover across a broader range of commercial risks.”

MS Amlin has not had to call on the guarantee, with premiums generated by local policies exceeding claims reported to date.