UNITY insurance for vessels sailing through the Black Sea grain corridor is extended to all vessels with non-military cargo

The UNITY affordable ship insurance program, implemented by Marsh McLennan and Lloyd’s of London in cooperation with the Ukrainian government, is being significantly expanded. The program will cover not only the maritime transportation of grain and other important foodstuffs, but also vessels carrying all non-military cargoes, such as iron ore, steel and containerized cargo. The decision, which will expand Ukraine’s export opportunities, was announced on March 1 in London during a visit to the UK by a Ukrainian delegation headed by Yulia Svyrydenko, First Vice Prime Minister of Ukraine and Minister of Economy of Ukraine.

“The extension of insurance to all non-military cargoes, such as containerized cargo, iron ore, and steel, is extremely important for Ukraine. Especially given the increased opportunities for exporting metallurgical products, as this sector has been severely affected by the full-scale invasion. In 2023, compared to 2021, steel production in Ukraine decreased by 3.4 times, and exports of metallurgical products decreased several times. Ship insurance can also support our efforts to increase exports of all non-resource products. As strengthening the processing industry and developing non-resource exports are priorities for the Government to strengthen economic resilience,” said Yulia Svyrydenko.

According to Yulia Svyrydenko, thanks to the UNITY insurance instrument, insurance rates in the commercial market have been halved. The rate under UNITY is currently 0.75% for agricultural products.

“Marsh McLennan is committed to supporting Ukraine by helping it attract global investment to rebuild the country and its economy. We are pleased to expand our public-private partnership with the Ukrainian government. The decision will provide exporters with lower premiums to move a wider range of goods through the Black Sea trade routes and great economic benefits for Ukraine,” said John Doyle, President and CEO of Marsh McLennan.

John Neal, CEO of Lloyd’s, added: “Since the invasion of Ukraine, Lloyd’s has been working with the UN, governments, regulators and insurance companies to support the economy and supply chain despite the challenging circumstances. New public-private partnerships, including the expansion of the UNITY program, are a hallmark of the Lloyd’s marketplace, bringing insurance experts and policy makers together to tackle complex risks.”

The UNITY insurance instrument is available to all international brokers who can be contacted by ship owners and Ukrainian exporters.

The UNITY program, designed to provide affordable war risk insurance for grain and other critical food commodities worldwide, was launched in November 2023. UNITY offers hull insurance and separate protection and indemnity (P&I) against war risks at significantly reduced premiums compared to standard market prices. In addition to grain, UNITY now provides coverage for Ukraine’s other export products, including iron ore, steel, electrical equipment and animal feed.

Developed following the meeting between President of Ukraine Volodymyr Zelenskyy and Prime Minister of the United Kingdom Rishi Sunak, the UNITY mechanism for reducing the cost of shipping insurance in Ukraine’s territorial waters provides, in particular, for the creation of a fund to compensate the first part of losses to shipowners and charterers by issuing standby letters of credit confirmed by the German DZ Bank by the state-owned Ukrainian banks Ukreximbank and Ukrgasbank.

Lloyd’s of London underwriters led by Ascot and other insurance companies provide up to USD 50 million for hull and P&I insurance against war risks. UNITY is available to clients of all registered Lloyd’s of London brokers, providing additional support for ongoing humanitarian efforts and helping to mitigate the aggressor’s pressure on supply chains and global food security.

Tags: insurance, Black Sea grain corridor