Ukraine: How Exposed Are Insurers?

Ukraine (UKR) is one of the largest insured risks for political risk insurance (PRI) and trade credit insurance (TCI). This predates the current situation in Ukraine and started immediately after the country’s accession to sovereignty in 1991.

Based on data from the Berne Union, the trade association representing credit and political risk insurers, PRI carriers issued $19 billion of new coverage globally in 2021, of which $2 billion went to cover risks in Europe and $1.6 billion to cover risks in Russia.

Based on these figures and other published data, we estimate that PRI insurers have insured between $1 billion and $7 billion in Ukraine risks over the last five years.

New PRI losses in Ukraine due to Russia’s invasion will likely be material but well within the ability of private carriers to perform on their obligations. Several factors are contributing to reducing private PRI insurers’ exposure in Ukraine:

Some PRI and TCI carriers stopped writing Ukraine risk in 2014
Carriers with existing Ukraine risk have likely taken reserves against future losses in Ukraine
80% of PRI coverage is provided directly or indirectly by government agencies such as OPIC in the U.S. and by multilateral agencies such as the World Bank’s MIGA.