Ukraine is exploring ways to help merchant vessels acquire insurance for operating in the Black Sea, in the wake of the collapse of the UN-brokered Grain Initiative.
Oleksandr Hryban, an adviser to the Economy Minister, said the government was considering launching its own international insurance pool, which would be coordinated with an international institution or with other governments.
“The goal is the same – to mobilise the reinsurance market, which is then multiplied, turning a nominal billion dollars into 5 billion in insurance coverage. This is currently being tested as a pilot on the grain deal,” Hryban said.
The withdrawal of Russia from the Grain Deal negotiated by Turkey and the United Nations has had a chilling effect on merchant shipping using the three Ukrainian Black Sea ports from which most grain is exported. Russia has warned that ships leaving these ports may come under attack.
Ukraine has since created its own maritime corridor for shipping, but is unable to guarantee its safety because if Russian naval superiority in the Black Sea. It was first used last week by a container ship that reached Turkish waters without incident.
“There is a direct threat from the Russian navy, fueled by constant threats from the Kremlin,” Hryban said.
“We are now actively working with the international insurance community to create a mechanism where these funds will be used not directly by ship owners, but by insurance companies that will multiply this resource,” Hryban was quoted as telling state news agency Ukrinform.
“The Ministry of Reconstruction, the Ministry of Economy, and underwriters such as Lloyds and Marsh & McLennan and other leading insurance and reinsurance brokers are involved in its approval.”
In an interview with the Financial Times, Hryban said the scheme could be in place as early as next month, and could see between five and 30 ships covered to travel through what he described as the “danger spot” of Ukrainian waters.
The FT also quoted Marcus Baker, head of marine, cargo and logistics at Marsh, as saying that “a public-private partnership, with insurers working in tandem with the Ukrainian government, will give greater confidence to shipowners to return to delivering Ukrainian grain around the world to those countries that need it most.”
