Ukraine has won an agreement with Marsh McLennan and Lloyd’s to expand the current war risk insurance program to cover ships carrying all non-military cargo such as iron ore, steel, and containerised shipping.
The public-private partnership with Ukrainian government, Lloyd’s and the advisory and insurance specialist Marsh McLennan, will support Ukraine export trade by providing lower war risk premiums.
The facility “Unity”, as it is called, will provide exporters with lower premiums to ship a wider range of goods through its Black Sea trade routes and deliver “major economic benefits to Ukraine.”
Launched in November 2023 to provide affordable war risk insurance for grain shipments and other critical food supplies globally, the “Unity” offers hull and separate protection & indemnity (P&I) war risk insurance at significantly reduced premiums compared to standard market pricing.
In addition to grain, Unity now provides cover for Ukraine’s other leading export industries including iron ore, steel, electrical equipment, and animal fodder.
Standby letters of credit created by the state-owned Ukrainian banks Ukreximbank and Ukrgasbank, each confirmed by DZ Bank, will continue to provide a first loss compensation fund to shipowners and charterers which is supported by the Government of Ukraine.
Underwritten by insurers based at Lloyd’s and other London-based insurers, and led by Ascot, Unity provides up to $50m in hull and P&I war risk insurance. Unity is available to clients of all Lloyd’s registered brokers, to provide added support to ongoing humanitarian efforts and alleviate continued pressure on supply chains and global food security.
John Doyle, president and chief executive, Marsh McLennan, said: “We’re pleased to expand this public-private partnership with the Ukrainian government. It will provide exporters with lower premiums to ship a wider range of goods through its Black Sea trade routes and deliver major economic benefits to Ukraine.”
The first deputy prime minister of Ukraine and minister of economy minister, Yulia Svyrydenko, notes that last year steel production was down by more than three times 2021 levels.
Exports of metallurgical products have also decreased significantly.
“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,” said Yulia Svyrydenko.
