Ukraine reaches deal on insurance of Black Sea exports

Ukraine has signed a deal with Lloyd’s of London and Marsh McLennan to bring insurance cover for ships taking Ukrainian grain exports.

Ukraine’s economy minister Yulia Svyrydenko said that the $50m programme would insure ships against military risks.

Marsh McLennan said yesterday that, in collaboration with the Ukrainian government, the Export Credit Agency of Ukraine, Ukreximbank, Ukrgasbank and DZ Bank, a new facility – called Unity – had been launched “to provide affordable insurance supporting the export of grain and other critical food supplies globally from Ukraine’s Black Sea ports”.

The facility is being underwritten by insurers based at Lloyd’s. Unity will provide up to $50m in hull and separate protection & indemnity (P&I) war risk insurance.

Ukreximbank, the State Export-Import Bank of Ukraine, and state-owned Ukrainian bank Ukrgasbank will provide standby letters of credit, each confirmed by DZ Bank, to support the facility, which itself is backed by the Ukraine Ministry of the Economy.

Global law firm, Norton Rose Fulbright, provided advisory services.

As with the ‘As One’ facility launched in July 2022 to provide insurance under the now defunct Black Sea Grain Initiative, Marsh will extend the new Unity facility to clients of Lloyd’s-registered brokers, to provide added support to ongoing humanitarian efforts and alleviate continued pressure on supply chains and global food security.

Ukraine prime minister Denys Shmyhal said that “the launch of the Unity facility will enable Ukraine to provide vital food supplies to the world at the same time as supporting the Ukrainian economy and keeping the Black Sea open for international trade. This partnership between the Ukrainian government, Marsh McLennan and Lloyd’s of London is a sign of confidence in our economy and demonstrates that Ukraine is open for business.”

In June Marsh McLennan committed to provide services on a pro-bono basis to the Ukrainian government. This includes building a data platform for the assessment of war risks in Ukraine, strategic advisory services from Oliver Wyman, and catastrophe reinsurance modelling from Guy Carpenter.

Marcus Baker, Global Head of Marine, Cargo & Logistics, Marsh, said: “The creation of this public-private partnership, with insurers working in tandem with the Ukrainian government and its banks, will accelerate the urgent resumption of vital grain exports amid the ongoing effects of this brutal conflict. Unity’s unique structure will enable underwriters to price risks at more affordable levels than those experienced in recent months.”

A week ago a pilot died and three Filipino crew and a dockworker were injured following a Russian missile strike on a bulk carrier entering the Ukrainian port of Yuzhny.,