London Insurance Sector Readies $50M Ukraine Grain Cargo Cover

An insurance company in London plans to return Ukrainian crops and send fertilizers through a safe route, trips that may require up to $ 50 million of insurance for each shipment, sources from the companies involved said on Wednesday.

The London marine insurance market has put the Black Sea region on the high-risk list and insurance premiums have skyrocketed.

For each trip, each ship needs different parts to cover, including cargo and the ship itself, called the hull and machinery. Additional fees are also paid by underwriters to enter such areas.

Lloyd’s Insurance Hiscox To Insure Grain Shipping To Ukraine

Lloyd’s Ascot insurer and broker Marsh have set up a grain trading facility to cover up to $50 million of freight per voyage, Marsh’s global head of shipping and freight Marcus Baker said.

“We have had inquiries in the last few days and we hope that this will be done,” he told Reuters, adding that $50 million was enough to transport more grain.

Although there were problems that needed to be solved in relation to the cage and the ports, he said: “What we have now means that when it happens, we can move.”

Baker declined to comment on pricing but said the facility will also include a “no-nonsense bonus” — hassle-free travel refunds.

He said other insurers may join Ascot in offering the cover.

The first grain shipment to leave a Ukrainian port since Russia invaded on Feb. 24, following the agreement made by Ankara and the United Nations, it was supposed to pass through the Bosphorus after an inspection on Wednesday.

It is unclear what the first luxury item contained, but company officials said insurance is required for all trips.

A Turkish official said the number of shipments from Ukraine could exceed the first successful trip.

Turkish, Russian and Ukrainian military officials, working with the UN team, have established a Joint Coordination Center (JCC) in Istanbul to be able to ship from Odesa, Chornomorsk and Yuzhny – the three Black Sea ports of Ukraine.

Neil Roberts, head of marine and aviation at Lloyd’s Market Association, which represents all businesses listed on the Lloyd’s of London insurance market, said some risks were needed for those wishing to underwrite transport.

“The market is waiting for the approval of the tours coming from JCC Istanbul,” said Roberts.

Other insurance options are also available.

Hiscox has committed to an insurance company set up to provide cover for ships sailing on a safe route from Ukraine, its chief executive said on Wednesday.

The initial cost of any shipwreck was about 3% of the ship’s value for 7 days, an insurance source said.

This compares to up to 1.5% on most Black Sea cruises, which can still be thousands of dollars for a seven-day cruise.

(Reporting by Jonathan Saul and Carolyn Cohn; Editing by Barbara Lewis)

Photo: In this photo provided by the Ukrainian Infrastructure Ministry Press Office, the ship Razoni, under the flag of Sierra Leone, with 26,000 tons of Ukrainian corn, leaves the port of Odesa, Ukraine, Monday, Aug. 1 , 2022. The first Ukrainian grain train left the port of Odesa under international cooperation, heading to Istanbul. Photo credit: Ukrainian Press Office via AP.

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