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Thursday, Aug 11, 2022

Lloyd’s to insure Black Sea grain shipments for up to $50M each

Lloyd’s to insure Black Sea grain shipments for up to $50M each

The UN, Turkey, Russia and Ukraine signed an agreement to reopen 3 Black Sea ports around Odesa last week.
Lloyd's of London insurers will offer a special package to cover Ukrainian grain shipped via freshly-agreed Black Sea corridors in a move that will build confidence around the U.N. agreement, it was announced Friday.

One of the chief worries after the U.N., Turkey, Russia and Ukraine signed an agreement to reopen three Black Sea ports around Odesa last week centered on providing security assurances to private trading companies, who operate the vast majority of the grain ships.

Under its "Marine Cargo and War facility," insurer Ascot will provide coverage for up to $50 million (€49 million) worth of damage to the grain each ship carries as part of a program set up with Lloyd's and Marsh. Any damage to the vessels themselves — for example from a Russian missile strike or a sea mine — would need to be covered by a separate insurance policy that is also being pieced together, according to an Ascot spokesperson.

"The facility will allow ships transporting grain, and other designated food products from Ukrainian ports, to have reliable and readily available coverage in place for their export voyages," Ascot and Marsh, the broker, said in a joint press release.

A spokesperson for Ascot refused to comment on whether the price of the insurance were much higher because of the risks of navigating the Black Sea amid the war. Ukraine's Infrastructure Minister Oleksandr Kubrakov told POLITICO this week he was in discussions with the British government on securing insurance guarantees but the Ascot spokesperson said the U.K. is not financing the insurance.

Ukraine President Volodymyr Zelenskyy said Friday that he was waiting for the final go-ahead from the U.N. and Turkey and is ready to send ships along the agreed maritime corridors "in the coming days."
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