The European Commission has approved, under EU State aid rules, a €1.5 billion (PLN 6.4 billion) Polish scheme to provide State-supported reinsurance of insurance for transport on the territory of Ukraine.

Poland, through its public export credit agency (KUKE), will offer reinsurance to cover war-related risks, such as damage from military operations, sabotage, terrorism, uprisings, and riots, for insurance companies providing transport coverage within Ukraine.

According to the European Commission, the measure directly benefits insurers in Poland and indirectly supports Polish-authorised transport companies delivering goods in Ukraine.

“The transport companies eligible for reinsurance coverage will be companies registered in Poland and authorised to carry out freight transport activities for hire or reward, or transport companies from other Member States with an established branch registered in Poland,” the European Commission explained.

The scheme is reportedly designed to fill a critical gap in war-risk insurance for transport companies impacted by the conflict in Ukraine.

Under this initiative, support will be offered through public reinsurance, with KUKE covering 80% of war-related risks, while private insurers assume the remaining 20%.

“The insurance companies, after subtracting the commission fee covering acquisition and administrative costs of the insurance, will pay to KUKE the adequate risk premium. This will ensure continued and adequate risk assessment and pricing. Standard commercial risks associated with the transport of goods are not covered by the scheme. The scheme will be in place until 30 June 2027,” the European Commission said.

Teresa Ribera, Executive Vice-President for Clean, Just and Competitive Transition, commented, “The scheme approved today will contribute to maintaining and facilitating transport of goods between the EU and Ukraine, disrupted by the ongoing Russian aggression, while ensuring that any potential competition distortions are kept to a minimum.”

In related news, Lloyd’s global insurer and reinsurer MS Amlin recently committed up to €110 million in reinsurance capacity over five years to support war risk policies underwritten by three Ukrainian carriers, via a scheme developed in partnership with global broking group Aon and the European Bank for Reconstruction and Development.

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