Ukraine Cargo Insurance Policy Suspended After Russia Quits Grain Deal
LONDON –– A cargo insurance facility providing cover for Ukraine grain shipments via a safe sea corridor has been suspended after Russia quit the United Nations-backed agreement, broker Marsh said on Tuesday.
The marine cargo and war facility led by Lloyd’s of London insurer Ascot, together with other underwriters, provided cover of up to $50 million per cargo.
“It is currently on pause,” said David Roe, head of UK cargo at Marsh, which acted as the facility’s broker. “It is suspended effectively due to the agreement not being extended.”
“Without the corridor being in place, there is a greater degree of uncertainty attached to the risk.”
Ascot declined to comment.
Insurance has been vital to ensure shipments through the corridor.
Russia struck Ukrainian ports on Tuesday, and the Kremlin warned that attempts to ship grain from Ukrainian Black Sea terminals without security guarantees from Moscow would carry risks because Kyiv used those waters for military activities.
“There is every expectation that there will continue to be cover, but it might be at a price that is difficult,” Marcus Baker, Marsh’s global head of marine and cargo, said separately.
“The safety and wellbeing of crew has to be a paramount consideration for every shipowner.”
Additional war risk insurance premiums, which are charged when entering the Black Sea area, need to be renewed every seven days.
They already cost thousands of dollars and are expected to go up, while shipowners could prove reluctant to allow their vessels to enter a war zone without Russia’s agreement. There is also the risk of floating mines.
“If you looked at the situation now compared to three or four weeks ago, the whole region is likely to be a riskier area,” Baker said.
The Lloyd’s of London insurance market has already placed the Black Sea region on its high risk list.