Insurance broker Marsh and insurer Ascot have announced the first insurance placement under their facility to insure the shipping of grain through Ukraine’s unoccupied Black Sea ports.
Marsh, Ascot and the other insurers that are part of the scheme, such as Hiscox, have agreed to extend it to clients of Lloyd’s of London registered brokers, in a move designed to provide added support to ongoing humanitarian efforts and alleviate continued pressure on supply chains and food security.
The insurance facility, first announced on 29 July, provides up to $50 million in all risks marine cargo and war coverage, allowing ships transporting grain and other designated foodstuffs from Ukrainian ports to have reliable and ready coverage in place.
The arrangement is a consequence of the setting up of the UN’s Black Sea Grain Initiative Joint Coordination Centre, which has already overseen the departure of dozens of vessels from Ukrainian ports in recent weeks.
The Istanbul-based UN scheme is the result of an agreement signed between the two warring parties, Russia and Ukraine, with Turkey and the UN working as intermediaries, to ensure Ukrainian grain can be exported, despite the ongoing Russian invasion.
“Cargo and war insurance will play a pivotal role in the broader resumption of grain and other vital food exports from Ukraine’s Black Sea ports,” said David Roe, Head of UK cargo at Marsh.
“By making the facility available to the clients of Lloyd’s of London registered brokers, it is our hope that we can all work together to support international efforts and help ensure Ukrainian grain reaches the world’s most vulnerable people during this terrible time of conflict,” he said.
Chris McGill, Ascot’s Head of Cargo, said: “We’re delighted to provide coverage to the first insured using this facility. Since its launch, we have seen significant demand for the product from a number of clients and brokers. It’s great that this mission-driven initiative is open and able to meet that demand for all who may need it.”
Speaking to The Insurer in a recent interview, McGill added: “This is exactly what the Lloyd’s market is all about: complex risk transfer through syndicated capacity.” I think Lloyd’s is probably one of the only markets that could bring this kind of solution together – and in pretty quick time.”
Patrick Tiernan, Chief of Markets at Lloyd’s, also commented on the facility: “The recovery of these grain supplies is vital to addressing global food insecurity and market uncertainty at this difficult time. The facility announced by our market today is of paramount importance.”
“It will add essential protections to the deal brokered by the UN last week and represents the latest support from Lloyd’s and the insurance industry to help the international community respond to the conflict,” Tiernan added.