War-risk insurance still does not cover Ukraine’s entire agricultural export chain

UkrAgroConsult

Ukraine’s war-risk insurance market is gradually expanding, but agricultural companies can currently protect only individual parts of the logistics chain. Marine shipments, inland cargo, motor vehicles and railway rolling stock can already obtain coverage under various programs, but there is still no single insurance solution covering the entire journey from an elevator to loading onto a vessel.

Marine and inland cargo insurance are currently the most developed segments. The Unity Facility supports war-risk insurance for vessels operating through Ukraine’s Black Sea ports, helping keep insurance costs at manageable levels and supporting exports. For inland logistics, the EBRD and Aon operate the Ukraine Recovery and Reconstruction Guarantee Facility (URGF). Its guarantee fund totals €110 mln, while the mechanism could potentially support insurance for up to €1 bln of goods and vehicles in transit annually.

At the initial stage, the URGF covers cargo, motor vehicles and railway rolling stock. INGO, Colonnade and UNIQA already participate in the program, while international reinsurance helps increase available coverage limits. The Swiss State Secretariat for Economic Affairs (SECO) is also being considered as a potential international partner to further expand war-risk insurance, including for agricultural logistics.

The main challenge is not only the cost of insurance but also insufficient market capacity. Insurers impose restrictions on territories, types of assets, insured events and maximum loss limits. For large elevators, terminals and other high-value facilities, available coverage may be substantially below the value of the asset itself or the potential loss.

For the agricultural sector, the next step is to develop comprehensive coverage for the entire export route: elevator — truck or railway — terminal — storage — vessel loading. This will require additional funding, international reinsurance capacity and guarantees from international partners, allowing the market to move from insuring individual operations to comprehensive protection of agricultural logistics against war risks.

Tags: silos, insurance, war, Black Sea grain corridor, logistics