(Reuters) — Insurance for humanitarian workers, journalists, engineers and others heading to Ukraine is now more expensive and harder to arrange than during the Iraq war.
Although initially nervous about providing coverage immediately after Russia’s February invasion of Ukraine, which Moscow refers to as a “special military operation,” a few more insurers have become willing to do so in recent months, industry sources say, although it is costly. .
“The rates in Ukraine are currently higher than what was previously experienced in Iraq and Afghanistan. …Fundamentally, it’s more of an active war zone rather than an insurgency situation,” said Alexis Fehler, casualty and health underwriter at Lloyd̵7;s of London-backed insurer OneAdvent.
“Instability caused by Ukrainian gains and the subsequent retaliatory actions by the Russian forces will have a further dramatic impact on costs,” he added.
Another Lloyd’s of London-backed insurer, Battleface, charges an average of €3,500 ($3,429) a week for a combination of €250,000 personal accident cover and €250,000 medical cover for Ukraine, senior underwriter Roger Perry said, although accident cover alone can cost up to €4,375 a week for higher risk parts of the country.
“Our insurers charge in seven-day tranches … because everything changes so quickly,” he said, adding that “the further east you go, it gets higher.”
Nevertheless, Battleface excludes Donbas – two eastern Ukrainian provinces that Russia has unilaterally declared as part of its territory – and the Odesa region in the south, although it may make exceptions, especially for short periods like a day.
During the 2003 Iraq War, Lloyd’s of London and other insurers conducted daily reviews of the premiums charged to cover journalists operating in the Gulf given fears that reporters could be used as human shields or executed, according to media reports at the time.
A third insurance source, who declined to be named, said the daily insurance cost of sending a journalist to the riskiest parts of Ukraine could be 5% to 10% of the amount covered, meaning an organization could break even on the total the value of an individual’s coverage after 10 days, an unsustainable situation for most.
A typical policy covers accidental death and dismemberment, emergency evacuation, repatriation and overseas medical benefits.
Organizations have sent more media and medical personnel and reconstruction experts to Ukraine, sources said, but insurance companies and security experts are particularly concerned about the risks to civilians after missiles rained down on Ukrainian cities, including Kyiv, following an attack on the bridge linking Russia with the annexed Crimean peninsula on Oct. 8
“As the resources on the Russian side have changed… they’ve started using things like ballistic missiles, old anti-shipping missiles and then adapting them for land attack, these are much less accurate,” said James Dennis, regional security coordinator at consultants Healix.
The United Nations and other aid agencies in Ukraine said last week that the missile attacks had disrupted their humanitarian work.
“As Ukrainian counteroffensives increase in the face of expected further Russian mobilization, the situation outside areas directly affected by the conflict will remain volatile,” said Sally Llewellyn, regional security director at consultants International SOS.
A shortage of providers is also driving up insurance costs, sources say, pointing in particular to reluctance among some U.S. insurers to offer Ukraine coverage.
American International Group Inc., which declined to comment, was drafting broad exemption clauses for Russia and Ukraine, Reuters reported earlier this year.
“We see some willingness among select insurers to consider writing coverage in Ukraine,” said Steven Capace, head of government contractors at broker Marsh, although he added, “Recent Russian missile attacks in population centers such as Kyiv and Lviv … likely create new concern among insurance companies.”