New mechanism for insuring ships against war risks restores stability and security to maritime transport

The Cabinet of Ministers of Ukraine has created a new mechanism for insuring ships against war risks. It will significantly reduce the current insurance premiums for carriers exporting to and importing from Ukraine by sea. The decision, which paves the way for cooperation with British reinsurance companies, was taken at a Government meeting on 14 November.

“Thanks to cooperation with the leading British reinsurers Marsh McLennan and underwriters Lloyd’s of London, ship insurance has become possible through the introduction of the Unity Facility. The total cover under this programme amounts to USD 50 million.

This decision will primarily have a positive impact on the work of grain traders. The new mechanism will reduce the cost of grain insurance by about 2.5 percentage points of the insurance tariff, which in turn will allow grain traders to save about UAH 100-140 per tonne of cargo, and in total it will bring additional UAH 4.0 billion to agricultural producers,” said Julia Svyrydenko, First Deputy Prime Minister and Minister of Economy of Ukraine.

According to her, these funds will be allocated to farmers both in the form of increased purchase prices and additional purchases. Increasing the volume of Ukrainian exports by sea is expected to contribute to additional growth in the Ukrainian economy.

“After russia’s withdrawal from the grain deal, many cargo ships were stranded. The Government’s decision will ensure the safety of navigation, promote the stability of maritime transport and ensure the sustainable export of Ukrainian products through Ukrainian ports,” concluded Yuliia Svyrydenko.

Background

According to forecasts, Ukraine will export about 50.7 million tonnes of grain in 2023-2024. As of 18 October, 7.9 million tonnes of grain were exported, 70% of which was shipped by sea.

IC UAC according to the MEU