15 Nov 2023 17:54

Ukraine allocates $50 mln of cover to lower ship insurance rates

MOSCOW. Nov 15 (Interfax) - Ukraine together with the UK government and 14 British insurance companies have launched a program for special insurance of ships using the temporary sea corridor unilaterally declared by Kiev, Ukrainian media reported, citing Ukrainian Prime Minister Denis Shmygal as saying on the social media on Wednesday.

"The government has already allocated funds that will guarantee recovering possible damage. The Export Credit Agency, the state-run Ukrgasbank, Ukreximbank and a pool of 14 insurers are involved in the mechanism," Shmygal said, commenting on the government's decision made on Tuesday.

The ship insurance became possible thanks to cooperation with the British insurance broker Marsh McLennan, Lloyd's of London insurers, and the launch of the Unity Facility, Ukrainian First Deputy Prime Minister, Economy Minister Yulia Sviridenko said. The total amount of cover under this program is $50 million.

The new facility will reduce the cost of grain insurance by around 2.5 percentage points of the insurance rate, which will enable grain traders to save around UAH 100-140 per one tonne of cargo, she said.

Overall, the introduction of a new insurance arrangement will bring an additional UAH 4 billion to agricultural producers, the Ukrainian Economy Ministry said.

As reported, it became known in early October that the British insurance and reinsurance broker Miller together with the British maritime technology company Clearwater Dynamics and the Ukrainian government elaborated a military risk insurance system covering the insurance of cargo and vessels during grain shipments via the three Ukrainian ports in the Black Sea, Chernomorsk, Odessa and Yuzhny.

Over 100 vessels have used the temporary corridor since mid-September and 4 million tonnes of cargo have been exported.