Ukraine is in talks with some of the world’s biggest insurance companies to cover ships traveling to and from its ports in the Black Sea — a crucial step toward a full resumption of vital grain exports around the globe.
Work on an insurance mechanism follows Russia’s withdrawal from the Black Sea Grain Initiative last month, which threatens the safe passage of ships carrying grain to and from Ukrainian ports.
The collapse of the deal — brokered by Turkey and the United Nations a year ago — has already pushed up global food prices and could tip millions in poor countries into hunger.
To keep grain shipments moving, Ukraine’s government will share potential losses with insurers, which should make cover for travel through risky Ukrainian waters more affordable for commercial shipping companies.
“We are now actively working with the international insurance community,” Oleksandr Hryban, an adviser to Ukraine’s economy minister, told the country’s state news agency Ukrinform.
Lloyd’s of London, the world’s oldest insurance market, and professional services firm Marsh McLennan — which owns the world’s biggest insurance broker Marsh and consultancy Oliver Wyman — are among the companies involved in the talks, Hryban said.
The program could be finalized within a couple of weeks, according to Marcus Baker at Marsh, and will replace the previous arrangement, which insured shipments as part of the Black Sea Grain Initiative but was paused when Russia pulled out of the deal. The risk of a ship becoming a casualty of the war surged as a result.
“Insurance is a huge enabler in getting grain moving again and helping to solve some of the food security challenges around the world,” Baker, global head of marine and cargo insurance at Marsh, told CNN.
Crispin Ellison, a partner at Oliver Wyman, added: “This has the potential to allow the same volume of grain to be exported as under the Black Sea Grain Initiative.”
Marsh McLennan has been advising Kyiv on war risk insurance for several months as Ukraine seeks vast investments to rebuild its war-torn economy.
Russia’s withdrawal from the grain deal has had a chilling effect on merchant shipping around Ukraine’s three Black Sea ports as the Kremlin warned that ships leaving these ports might come under attack.
Russia has already unleashed a flurry of attacks on grain supplies in key Ukrainian cities, including Odesa. And earlier this month a Russian warship fired warning shots and boarded a cargo ship in the Black Sea it claims was headed to Ukraine.
Last week, the Hong Kong-flagged Joseph Schulte container ship became the first vessel to depart from any of Ukraine’s Black Sea ports since the grain deal broke down on July 17. With more than 2,000 containers on board, including food products, the ship traveled from Odesa through the Black Sea before arriving in Turkey without incident.
“Off we go with the ‘first one’,” Ukraine President Volodymyr Zelensky wrote on social media platform Telegram at the time. “We are preparing the next steps.”