The cover was suspended following the expiration of the Black Sea Grain Initiative
Broker Marsh has said it is “exploring options” after a cargo insurance policy for Ukraine grain shipments was suspended.
The marine cargo and war facility, which was placed by Marsh and led by (re)insurer Ascot, provided cover for Ukrainian grain and other food supplies being shipped through safe corridors.
However, the Black Sea Grain Initiative between Russia and Ukraine that allowed the shipments to be safely exported expired earlier this week (17 July 2023) after Russia quit the United Nations (UN) backed agreement.
The insurance facility, which provided up to $50m (£39m) in all risks relating to marine cargo and war coverage, was placed on pause the following day.
A Marsh spokesperson told Insurance Times: “Given the expiration of the Black Sea Grain Initiative, Marsh is exploring a range of options to continue these exports, which are central to humanitarian efforts and global food security.”
Russia struck Ukrainian ports a day after pulling out of the grain deal.
Lloyd’s of London has also placed the Black Sea region on its high risk list.
A Lloyd’s spokesperson told Insurance Times: “Through working with the UN and insurers across our market, the establishment of the grain corridor out of Ukraine has enabled over 800 ships to depart Ukraine carrying more than 23m tonnes of grain and fertiliser around the world – helping alleviate food shortages and market volatility at a difficult time for the global economy.
”That cross-border, cross-sector cooperation is a hallmark of the Lloyd’s market. The continuation of this vital agreement is crucial in addressing risks to global food security, and we are committed to continuing to support diplomatic efforts to reinstate the safe corridor.”
Insurance Times contacted Ascot for comment but it declined to comment.
- Insurance Times has converted dollar amounts into pounds using an exchange rate of $1.27 = £1, which was correct as of 1 July 2023.