Aon and Marsh McLennan Call on (Re)insurance Industry to Aid Ukraine’s Resilience

Rhea-AI Summary

Aon and Marsh McLennan (NYSE: MMC) have called on the (re)insurance industry to support Ukraine's resilience by removing blanket exclusions and differentiating Ukraine from Russia and Belarus in risk assessments. The firms emphasize that this action would catalyze economic growth and strengthen Ukraine's foundations for a post-conflict economy.

Key points:

• Many global reinsurers have grouped risks from Ukraine, Russia, and Belarus together, limiting (re)insurance capital.
• Both companies are working with governments and organizations to support Ukraine's economy.
• Marsh McLennan expanded its public-private partnership to cover shipping to and from Ukraine's ports.
• Aon created a first-of-its-kind insurance program for war risk policies in Ukraine.
• The firms argue that data-driven risk assessment can enable more impactful insights for Ukraine's reconstruction.

Positive

• Marsh McLennan expanded its public-private partnership to cover all shipping to and from Ukraine's ports
• Aon created a first-of-its-kind insurance program to support war risk policies for businesses operating in Ukraine
• The initiative aims to stimulate economic expansion and employment in Ukraine
• The companies are working with governments and international organizations to support Ukraine's economy

Negative

• Many global reinsurers have grouped risks from Ukraine, Russia, and Belarus together, limiting (re)insurance capital
• Arbitrary exclusions for Ukraine contribute to confusion about varying levels of risk in the country
• Current risk assessment practices may impede economic growth and stability in Ukraine

Financial Analyst

The call from Aon and Marsh McLennan for the (re)insurance industry to support Ukraine's resilience is a significant development with potential long-term implications. By advocating for the removal of blanket exclusions, these industry giants are pushing for a more nuanced approach to risk assessment in Ukraine. This could lead to increased insurance capital availability, which is crucial for economic growth and reconstruction efforts.

The proposed changes could have a positive impact on Ukraine's economy, particularly in key sectors like healthcare, energy and agriculture. However, investors should note that this is a complex situation with ongoing risks. The potential influx of insurance capital could create new investment opportunities, but it's essential to monitor the implementation of these proposals and their actual impact on the ground.

Market Research Analyst

This initiative by Aon and Marsh McLennan represents a significant shift in market perception of Ukraine. By differentiating Ukraine from Russia and Belarus in risk assessments, they're potentially opening up a new market for (re)insurers. This could lead to increased competition and potentially lower insurance costs for businesses operating in Ukraine.

The development of tools like Ukraine's war risk data platform demonstrates a move towards data-driven decision making in a complex geopolitical situation. This transparency could attract more investors and insurers to the Ukrainian market. However, the success of this initiative will largely depend on how many other insurers follow suit and how quickly the proposed changes are implemented.

Legal Expert

The call to remove blanket exclusions for Ukraine in (re)insurance contracts has significant legal implications. It challenges the current practice of grouping Ukraine with Russia and Belarus, which could be seen as an unfair business practice. This move could potentially lead to regulatory scrutiny and calls for more nuanced risk assessment practices across the industry.

The development of public-private partnerships, such as Marsh McLennan's expansion to cover all shipping to and from Ukraine's ports, creates new legal frameworks for operating in conflict zones. These partnerships could become models for future conflict areas, potentially changing how businesses and governments collaborate in high-risk environments. Investors should closely monitor the legal and regulatory developments stemming from these initiatives.

The firms emphasized that the removal of blanket exclusions would catalyze Ukraine’s growth and future reconstruction

MONTE CARLO, Monaco--(BUSINESS WIRE)-- Aon and Marsh McLennan today called on the (re)insurance industry to build upon the capital, expertise and historical role of the (re)insurance industry to help Ukraine’s resilience by catalyzing economic growth and strengthening the country’s foundations for a post-conflict economy. The firms emphasized that the removal of blanket exclusions, which ignore the diversity of risk throughout the country, would further support Ukraine’s economy.

Additionally, 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 (re)insurance 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.

“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. We’re asking the insurance industry to look closely at Ukraine’s risks and work to strengthen the public private partnerships under development.”

Marsh McLennan and Aon each are already working with the Ukraine, U.S. and UK governments, along with many other international organizations, to support Ukraine’s economy as it endures ongoing attacks and accelerate investment in the country’s 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. This follows Marsh McLennan’s support in helping the Ukraine Government develop its war risk data platform which provides investors and (re)insurers with granular transparent data on the impact of the conflict to date and degree of war risk.

In June, Aon worked with the U.S. International Development Finance Corporation to create a first-of-its-kind 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 firms assert that arbitrary exclusions for Ukraine contribute to confusion about the vastly different levels of risk in the country. As a result, there are potential issues with how (re)insurers underwrite risks between regions directly impacted by the war and many areas of central and western Ukraine which have suffered little to no war damage. 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.

About Marsh McLennan

Marsh McLennan (NYSE: MMC) is a global leader in risk, strategy and people, advising clients in 130 countries across four businesses: Marsh, Guy Carpenter, Mercer and Oliver Wyman. With annual revenue of $23 billion and more than 85,000 colleagues, Marsh McLennan helps build the confidence to thrive through the power of perspective. For more information, visit marshmclennan.com, or follow on LinkedIn and X.

About Aon

Aon plc (NYSE: AON) exists to shape decisions for the better — to protect and enrich the lives of people around the world. Through actionable analytic insight, globally integrated Risk Capital and Human Capital expertise, and locally relevant solutions, our colleagues provide clients in over 120 countries with the clarity and confidence to make better risk and people decisions that protect and grow their businesses.

Follow Aon on LinkedIn, X, Facebook and Instagram. Stay up-to-date by visiting Aon’s newsroom and sign up for news alerts here.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240907031227/en/

Marsh McLennan

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Source: Marsh McLennan

FAQ

What are Aon and Marsh McLennan (MMC) calling for regarding Ukraine's insurance coverage?

Aon and Marsh McLennan are calling on the (re)insurance industry to remove blanket exclusions for Ukraine and differentiate it from Russia and Belarus in risk assessments to support Ukraine's economic resilience and reconstruction efforts.

How has Marsh McLennan (MMC) expanded its support for Ukraine?

Marsh McLennan has expanded its public-private partnership with the Ukrainian government to cover all shipping to and from Ukraine's ports, and has helped develop a war risk data platform for investors and (re)insurers.

What insurance program has Aon created to support businesses in Ukraine?

Aon has worked with the U.S. International Development Finance to create a first-of-its-kind insurance program to support war risk policies for businesses operating in Ukraine.

Why do Aon and Marsh McLennan (MMC) argue against grouping Ukraine with Russia and Belarus in risk assessments?

They argue that grouping Ukraine with Russia and Belarus is not based on data-driven risk assessment and overlooks Ukraine's efforts to align with free and democratic economies, potentially impeding its economic growth and stability.