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The Military and Political Risk Insurance as a Mechanism for Protecting Investments in the Ukrainian Economy
Baranov A. L., Zimenkov A. Y.

Baranov, Andrii L., and Zimenkov, Andrii Yu. (2024) “The Military and Political Risk Insurance as a Mechanism for Protecting Investments in the Ukrainian Economy.” Business Inform 7:421–427.
https://doi.org/10.32983/2222-4459-2024-7-421-427

Section: Finance, Money Circulation and Credit

Article is written in Ukrainian
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UDC 368

Abstract:
The aim of the article is to study the approaches to insurance against military and political risks, which are used in different countries of the world to protect investments, as well as to substantiate and assess the possibility of their implementation in Ukraine during the ongoing war. Analyzing and systematizing the scientific works of scholars, also generalizing the practical experience of international and foreign institutions, various options for the implementation of military and political risk insurance were consi-dered. As a result of the study, it is determined that, given the huge amount of damage caused by mili-tary operations, limited possibilities of the State-based financing and attraction of funds from interna-tional donors, the only option for protecting future investments in the economy of Ukraine can be insur-ance against military and political risks. Due to the difficulty of predicting these risks, the complexity in terms of assessing losses, as well as the high probability of their occurrence in Ukraine, the private in-surance business is not very interested in the development of such insurance. Operations for the provi-sion of guarantees and/or insurance in terms of military and political risks in Ukraine by international and foreign institutions, such as MIGA, DFC, USAID, KUKE, etc., are analyzed. It is determined that the main objects of guaranteeing or insurance are export-oriented sectors of the economy. For the most part, such protection applies only to certain foreign investments. The proposed steps by the government and the NBU to expand the functions of the Export Credit Agency (ECA) and create a State agency for military risks insurance are considered and analyzed in detail. Such a decision will lead to a conflict of interest, when both State institutions will compete in the same segment of the insurance market and struggle for a single source of funding either on the part of the State or international donors. Prospects for further research in this direction are the analysis of world experience in the field of insurance against military, political, terrorist, and disaster risks, especially regarding the mechanisms of rapid accumulation of funds and the creation of appropriate funds intended to compensate for the losses caused. A com-prehensive mechanism should involve all stakeholders: the State, international donors, international fi-nancial and insurance institutions, international insurance business, and domestic insurers.

Keywords: military and political risks, insurance, investments, export credit agency, losses, recovery.

Fig.: 1. Tabl.: 1. Bibl.: 15.

Baranov Andrii L. – Doctor of Sciences (Economics), Professor, Head of the Department, Department of Innovative Business Technologies, Kyiv National Economic University named after Vadym Hetman (54/1 Beresteiskyi Ave., Kyiv, 03057, Ukraine)
Email: [email protected]
Zimenkov Andrii Yu. – Director, RA Medialogic LLC (43 Vasylia Danylevycha Str., Kyiv, 02000, Ukraine)
Email: [email protected]

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