Broker Marsh McLennan is expanding its marine war risk insurance collaboration with the Ukrainian government to try to slash shipping costs and boost the country’s Black Sea exports.
The Lloyd’s of London insurance market has also signed up to the expanded facility, called Unity, and it will be open to all Lloyd’s registered brokers to market.
Unity was launched last November by Marsh and Ukraine to promote grain exports. It will now include steel, iron ore, electronic and containerised products.
The facility, to be led by insurer Ascot and underwritten by Lloyd’s underwriters, will provide protection and indemnity and hull war risk insurance up to $50m.
Marsh said the aim is to at least halve commercial war risk rates, which are currently just under 1% of hull values, falling from as high as 4% before grain exports were resumed last September.
Although there have been attacks on shipping by Russia, there is yet to be a major claim related to the Black Sea grain trades.
Marsh chief executive John Doyle said: “Marsh McLennan is dedicated in our support of Ukraine — helping it attract global investment to rebuild the country and recover from the devastating impact of war on its people and economy.”
Standby letters of credit from state-owned Ukrainian banks Ukreximbank and Ukrgasbank will provide a first loss-compensation fund to shipowners and charterers, supported by the government of Ukraine.
Economic resilience
Ukraine’s First Deputy Prime Minister, Yulia Svyrydenko, who is also the economy minister, said: “Insuring vessels backs our efforts to increase the volume of all non-raw material product exports, in particular iron ore and steel.
“Strengthening the processing industry and developing non-raw material exports are priorities for the government to enhance our country’s economic resilience.”
Marsh is bullish about the role the expanded war risk facility can play in bringing down Ukraine’s export costs and revitalising its war-hit economy.
The restarting of grain exports has seen close to 1,000 bulk carriers trade to the country in just six months.
But so far uptake of Unity has been limited to a handful of ships.
War risk cover for Ukrainian grain exports has been provided mainly by the commercial marine insurance market.
