Prospects of Ukrainian-Polish Cooperation in the Area of Political Risk Insurance

Abstract

Insurance is one of the key instruments for managing the political risks of bilateral economic cooperation. In this area, political risk insurance (PRI) is a product whose purpose is to protect investors from losses during unforeseeable political events. The intensifi cation of export and import relations and investment activities requires the cooperation between Ukraine and Poland in the PRI sphere. An intergovernmental agency for the insurance of political risks is an optimal institutional unit for this cooperation. It should be based on the mechanism of public-private partnership. This institution will be deprived of the disadvantages of not only the state (resource insuffi ciency) but also the private (limited risk appetite) mechanisms of political risks management. Unlike the Berne Union, which focuses on the insurance of international trade contracts (about 90%), the bilateral Ukrainian-Polish agency should concentrate on the PRI of investment contracts. The establishment of active cooperation between Ukrainian and Polish insurance companies, associations of insurers, scientifi c and educational institutions is one of the preconditions for its successful activity. Consequently, common approaches will be developed to improve the functioning of this segment of the insurance market according to European standards.