Marsh McLennan in collaboration with the Ukrainian government, the Export Credit Agency of Ukraine, Ukreximbank, Ukrgasbank and DZ Bank, announced the launch of a new facility – Unity – to provide affordable insurance supporting the export of grain and other critical food supplies globally from Ukraine’s Black Sea ports.
Underwritten by insurers based at Lloyd’s of London, Unity will provide up to $50 mn in hull and separate protection & indemnity (P&I) war risk insurance.
Recognizing the heightened dangers and uncertainties associated with shipping in the Black Sea area, the Lloyd’s of London insurance market has already classified it as a high-risk zone.
Ukraine’s ports have been closed since Russia’s invasion in February with marine insurers based in Lloyd’s of London and the wider London commercial insurance market awaiting more assurances given the potential losses involved with every ship.
The launch of the Unity facility will enable Ukraine to provide vital food supplies to the world at the same time as supporting the Ukrainian economy and keeping the Black Sea open for international tradeDenys Shmyhal, Prime Minister of Ukraine
“This partnership between the Ukrainian government, Marsh McLennan and Lloyd’s of London is a sign of confidence in our economy and demonstrates that Ukraine is open for business”, Denys Shmyhal says.
Ukreximbank, the State Export-Import Bank of Ukraine, and state-owned Ukrainian bank Ukrgasbank will provide standby letters of credit, each confirmed by DZ Bank, to support the facility which itself is backed by the Ukraine Ministry of the Economy, providing shipowners and charterers with war risk insurance in the absence of safe corridors. Global law firm, Norton Rose Fulbright, provided advisory services.
As with the ‘As One’ facility launched to provide insurance under the now defunct Black Sea Grain Initiative in July 2022, Marsh will extend the new Unity facility to clients of Lloyd’s of London registered brokers, to provide added support to ongoing humanitarian efforts and alleviate continued pressure on supply chains and global food security.
Marsh McLennan is committed to mobilizing our unique expertise to support global food security and stability. The launch of this insurance facility will especially benefit the developing nations that buy much of Ukraine’s grain and also help Ukraine’s future recovery and reconstruction endeavorsJohn Doyle, President and Chief Executive Officer, Marsh McLennan
“Through these efforts, we are fulfilling our purpose as a company to give our communities and clients the confidence to thrive.”
Launch follows June’s announcement when Marsh McLennan committed to provide services on a pro-bono basis to the Ukrainian government which – as well as Marsh’s insurance expertise – includes building a data platform for the assessment of war risks in Ukraine, strategic advisory services from Oliver Wyman, and catastrophe reinsurance modelling from Guy Carpenter.
Lloyd’s welcomes the establishment of this insurance facility, which brings together the expertise of our market to provide an innovative solution that will ensure the safe transport of Ukrainian grain and agricultural products out of the Black Sea and help alleviate global food insecurityJohn Neal, CEO, Lloyd’s
The creation of this public-private partnership, with insurers working in tandem with the Ukrainian government and its banks, will accelerate the urgent resumption of vital grain exports amid the ongoing effects of this brutal conflict.
Unity’s unique structure will enable underwriters to price risks at more affordable levels than those experienced in recent months.
by Yana Keller