Ukraine verges on deal with insurers to cover grain exports in Black Sea

Ukraine is finalizing details of a scheme with global insurers to cover grain vessels sailing to and from Ukrainian Black Sea ports, Financial Times writes.

Oleksandr Gryban, a special representative for Ukraine’s economy ministry, told the Financial Times that the deal was “currently being pursued and actively discussed” between the relevant ministries, as well as local banks and international insurance groups including Lloyd’s of London.

It may be rolled out as early as next month and could involve five to 30 ships transiting through "danger spots" in Ukrainian waters.

“It depends on how the structure goes and what the level of risk-sharing is going to be between the government and private insurance companies,” said Gryban.

Considering the military risks, affordable insurance is essential for the resumption of commercial shipping. Kyiv is being advised on a pro bono basis by the Marsh McLennan Professional Services Group, which includes Oliver Wyman and Marsh, the world's largest insurance broker.

Marcus Baker, global head of shipping, cargo and logistics at Marsh, said that "a public-private partnership with insurers working in tandem with the Ukrainian government will give shipowners more confidence to return to shipping Ukrainian grain around the world to the countries that need it most."

Specifics are yet to be finalized, but people involved in the discussions said the scheme would aim to cover damage to ships calling at and departing Ukrainian ports, and risks could be shared between insurers and a state bank.

Gryban said that the government's share of the risk would likely be covered by the country's State Road Fund, which was created to repair Ukrainian roads and is financed by a fuel sales tax.