(Reuters) — A cargo insurance facility providing cover for shipments via Ukraine’s grain export corridor will continue next year without rate hikes, an underwriter with Lloyd’s of London insurer Ascot said on Thursday.
Twenty-one insurance companies are part of the facility, which is led by Ascot and arranged by broker Marsh.
Ships calling at the three Ukrainian ports that have been part of the UN-backed deal are typically required by their banks to have various insurance policies in place, including hull and cargo war protection, which is renewed every seven days.
Interest rates on war and other insurance are generally expected to rise sharply across the board next year due to the conflict, natural disasters and high inflation.
The “AsOne”; Black Sea facility will continue unabated with no planned rate increases, Chris McGill, Ascot’s cargo manager, told Reuters by email.
“This is against a supply-driven, speed-hardening environment in the naval warfare market.”
Air and naval insurers are concerned that reinsurers – who insure the insurers – will exclude the entire Ukraine, Russia and Belarus region when reinsurance contracts come up for renewal on January 1.
But Mr McGill said the cargo facility was set up in such a way that insurers on the program share the risk, without the need for reinsurance.