International Union of Marine Insurance (IUMI) president Frederic Denefle says a state-backed insurance scheme for Ukraine grain shipments is not yet available.
His comments come as two Turkish-linked ships sailed into the Ukrainian port of Chornomorsk for Ukraine’s first grain exports since the collapse of the Black Sea Grain Initiative.
Denefle, speaking at the opening of the IUMI conference in Edinburgh, Scotland, said at this moment the mainstream marine insurance market is not prepared to cover grain shipments following recent Russian drone attacks on Ukrainian export facilities.
“The Russian tactic is so clear that marine insurers are no longer prepared to provide insurance for those Ukraine shipments,” said Denefle, who is also chief executive of French war risk insurer Garex.
He cited state-backed efforts in Turkey and Ukraine to attempt to share the risk of insurance cover with the commercial marine insurance market as a possible solution.
He said the efforts indicate the importance of marine insurance to facilitate world trade, but such a policy is still not yet available.
“The Ukraine government has tried to deal with the marine insurance market to build up a collateral financial arrangement, but we still don’t know how it will be framed and the discussions are ongoing,” he said.
Broker Marsh is working with Kyiv and the London marine insurance market to come up with the scheme.
As TradeWinds reported earlier, the 3,330-dwt Resilient Africa (built 2001) and 18,300-dwt Aroyat (built 1997) sailed into Ukraine to load grain over the weekend at the deep-sea port of Chornomorsk.
The insurance cover has not been declared, although sources suggested it may have been secured in the local market.
It is also thought that the risk of an attack on the vessels may be limited, as Russia wants to maintain its relationship with Turkey.
Denefle also highlighted the issue of inflation in the marine insurance market. He said it is raising insured values, which may have to be balanced through more insurance capacity and higher premiums.