Сost of insuring ships in the Black Sea may increase by up to 1%

The cost of war risk insurance for ships heading to the Black Sea has almost doubled after unidentified drones attacked Greek oil tankers heading to a Russian terminal to load crude oil, according to five industry sources, Reuters reported.

The sources said the recent incidents have raised the risk assessment for ships heading to both Ukrainian and Russian terminals.

The cost of war risk insurance for port calls to Black Sea terminals rose to 1% of the value of the ship from 0.6% to 0.8% at the end of December. Rates rose to their highest level since 2023 in early December after a series of drone attacks on Russian-linked tankers.

“Rapid escalation of risk, with few early indicators and warnings, has become a hallmark of the Black Sea,” said Munro Anderson, a specialist in maritime war insurance at Vessel Protect, part of Pen Underwriting.

Vessels calling at Russian or Ukrainian Black Sea ports or terminals in the Sea of ​​Azov require additional war risk insurance, which is typically taken out for seven days and reviewed every 24 hours. Last month, policies were typically reviewed every 48 hours.

According to David Smith, head of marine at insurance broker McGill and Partners, war risk insurance rates in the Black Sea were extremely volatile and changed daily.

“They are now rising sharply due to a number of incidents and we wouldn’t be surprised if their value exceeds 1%, depending on the value of the vessel, the property or the intended port of call,” Smith told Reuters.

Tags: Ukraine, Russia, Black Sea region, insurance, war