20 Nov 2023 13:43

Kiev hopes ship insurance arrangement in maritime corridor to start operating in near future

MOSCOW. Nov 20 (Interfax) - The arrangement for special insurance of ships using the maritime corridor declared by Ukraine unilaterally will start operating within the next two weeks, Ukrainian Deputy Restoration Minister Yury Vaskov said at the Infrastructure Day 2023 organized by the European Business Association in Kiev last Friday, as Ukrainian media reported.

"There is this kind of practice when it comes to insurance of important, non-standard risks, when companies merge in order to have greater financial solvency. They confirmed their readiness to establish an insurance pool and an insurance fund, which should also include Ukraine with financial guarantees. This is an indicator for them. After that, leading British insurance companies will join the pool and the existence of this pool enables insurers to provide ship owners with an insurance tariff of no more than 1.25%," Vaskov said.

As reported, Ukraine jointly with the British government and 14 British insurance companies created an arrangement for special insurance of ships using the Ukrainian maritime corridor.

The government has already allocated funds, which will be a guarantee of compensation for possible damage, Ukrainian Prime Minister Denis Shmygal said. The facility involves the Export Credit Agency, state-owned Ukrgasbank, Ukreximbank and a pool of 14 insurers.

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

The new arrangement will reduce the cost of grain insurance by around 2.5 percentage points (p.p.) of the insurance tariff, which will give grain traders the opportunity to save around UAH 100-140 per one tonne of cargo, she said.

In general, the introduction of a new insurance arrangement will bring an additional UAH 4 billion to agricultural producers, the economy minister said.

It was also reported that in early October it became known about the British insurance and reinsurance broker Miller in partnership with the British maritime technology company Clearwater Dynamics (CWD) and the Ukrainian government elaborating a military risk insurance system covering the insurance of cargoes and vessels during grain shipments via three Ukrainian Black Sea ports, Chernomorsk, Odessa and Yuzhny.