A new export course: extension of Black Sea vessel insurance to cover all non-military cargo

The UNITY affordable ship insurance program, implemented jointly by Marsh McLennan and Lloyd's of London and the Ukrainian government, is significantly expanding its capabilities. From now on, it will be possible to cover not only the maritime transportation of grain and other important foodstuffs, but also vessels carrying all non-military cargoes, such as iron ore, steel and containerized cargo.

The press service of the Ministry of Economy reports this. It is noted that the expansion of insurance to all non-military cargo, such as containerized cargo, iron ore, and steel, is of great importance to Ukraine, especially given the increased opportunities for exporting metallurgical products that have fallen victim to a full-scale invasion.

According to data from 2023, compared to 2021, steel production in Ukraine decreased by 3.4 times, and exports of metallurgical products decreased several times. "Ship insurance can help to increase exports of all non-resource products, which is a priority for the Government in the context of strengthening economic resilience," said Yulia Svyrydenko, Minister of Economy of Ukraine.

Thanks to the UNITY insurance instrument, insurance rates in the commercial market have been halved. The rate under UNITY is currently 0.75% for agricultural products. All international brokers have access to the UNITY insurance instrument, which can be used by ship owners and Ukrainian exporters.

The UNITY program, which was launched to provide affordable insurance against war risks for the supply of grain and other important food products around the world, began operations in November 2023. UNITY offers hull insurance and separate protection and indemnity (P&I) against war risks at significantly reduced premiums compared to standard market prices.

UNITY's mechanism for reducing the cost of shipping insurance in Ukraine's territorial waters includes, among other things, the creation of a fund to compensate the first part of losses to shipowners and charterers through the issuance of standby letters of credit by state-owned Ukrainian banks - Ukreximbank and Ukrgasbank - which are confirmed by the German DZ Bank.

Lloyd's of London underwriters led by Ascot and other insurance companies provide up to USD 50 million for hull and P&I insurance against war risks. UNITY is available to clients of all registered Lloyd's of London brokers, providing additional support for ongoing humanitarian efforts and helping to mitigate the aggressor's pressure on supply chains and global food security.