War risk insurance is becoming one of the most difficult financial questions for Ukrainian business. Companies need protection for warehouses, plants, logistics assets and commercial property, but the available products remain expensive and often cover only a small part of the real value of assets.
The basic problem is the balance between premium and limit. Local insurers can often provide coverage of several tens of millions of hryvnias, which is meaningful for smaller property but insufficient for large industrial facilities or distribution centers. For assets worth hundreds of millions or more, international reinsurers are usually needed.
Why the market is hard to scale
Geography is a major restriction. Many insurers avoid assets close to the front line, temporarily occupied territories, ports or sensitive energy facilities. Even in safer regions, the cost can be several times higher than standard property insurance before the full-scale invasion. For central regions, premiums may reach high single digits or more as a percentage of the insured limit.
Demand exists, but many inquiries do not turn into contracts because the economics are difficult. A company may pay a significant premium and still receive a limit that would not compensate a major loss. This is especially relevant for logistics companies, manufacturers and retail networks with expensive fixed assets.
State compensation programs and participation by international financial institutions can make the system more usable. Government support can reduce premiums or compensate losses where private insurers do not operate, while foreign reinsurance can increase limits and spread risk. Without that combination, war risk insurance will remain a narrow product rather than a mass tool for economic recovery.
For investors, the issue matters beyond insurance. A functioning risk-transfer mechanism helps unlock financing, protect new projects and make rebuilding decisions less fragile. The market is forming, but it still needs scale, data, capital and trust.
