Global conflicts drive demand for war risk insurance

With conflict continuing in Ukraine and the Middle East, a little-explored global industry has never been more in demand – the war risk insurance market.

When a Russian missile damaged Natalia Grishko’s apartment in a tower block on the outskirts of Kyiv last November she thankfully was not injured.

Mrs Grishko’s daughter, Alina Kalcheva, says the missile fell about 100m (328ft) from the building. “The blast wave damaged my mother’s balcony, windows, doors, and the interior of the apartment.”

While her mum was “of course very upset and cried” to begin with, Mrs Kalcheva says she ultimately felt calm because they had insured the flat against such an attack.

For while general household insurance doesn’t cover conflict damage – whether you live in Ukraine or a country not under attack – Mrs Kalcheva had had the foresight to take out specialist war risk insurance cover for her mother. And the insurer paid out $1,000 (£740) to help cover the repairs.

The annual premium or cost was $52, and the 33-year-old says she “didn’t hesitate to buy it. And as it turned out it was obviously the right decision.”

Fellow Ukrainian Ekaterina Vasylieva even took out a war risk policy for her car in April 2024. That was particularly timely, because only a day later her vehicle was damaged by Russian shrapnel when it was parked in a street in the coastal city of Odesa.

“Only the day before I extended the comprehensive insurance on the car, and the manager offered for me to get insurance against military risks,” she says. “The cover saved me a lot because after the Russian attack the car looked like a sieve.”