(Reuters) — Insurers are no longer offering new cargo insurance cover for shipments from Ukraine through a U.N.-backed secure corridor after Russia suspended its participation, industry sources said on Tuesday.
An export deal, struck by Russia and Ukraine and brokered by Turkey and the United Nations in July, was meant to ease a world hunger crisis caused in part by Moscow’s invasion of Ukraine and an earlier blockade of its ports.
While shipments have moved out of Ukraine since Moscow’s announcement on Saturday, insurers are grappling with a changed risk environment and more uncertainty, sources said.
“It is imperative that ships already in the grain corridor are not collateral damage and are allowed safe passage,”; Guy Platten, secretary general of the International Chamber of Shipping, said on Tuesday.
“Furthermore, the safety of seafarers must remain a top priority, and all parties must take into account the crews who may now be stuck on board or in port due to factors beyond their control.”
Ships calling at the three ports that have been part of the agreement are usually required by their banks to have various insurance policies in place, including hull and cargo war protection, which is renewed every seven days.
Lloyd’s of London insurer Ascot said on Monday it would suspend write protection for new deliveries. Since then, sources say other Lloyd’s insurers have followed suit.
“Any shipment that comes in to be quoted yesterday is likely to struggle to get cover,” Ascot’s shipping manager Chris McGill told Reuters on Tuesday.
“We try to gather as much information as we can from multiple sources to create an appropriate solution that makes sense for everyone involved.”
Three industry sources said indicative prices for hull protection cover had risen by half to 1.5% of the vessel’s value on Tuesday, from around 1% on Monday, adding that any cover was unlikely to be provided at the moment.
“Insurers will think that they don’t want to increase their exposure in the current situation. The comprehensive insurance companies can quote but nothing moves,” said another source.
According to ICS analysis, there are still 65 ships stuck in Ukraine, which includes other ports not part of the initiative, as well as 346 seafarers.
Delegations from Ukraine, Turkey and the United Nations agreed not to plan any movement of ships through the grain corridor on Wednesday, the initiative’s Joint Coordination Center said on Tuesday.