Unity’s maritime corridor vessel insurance program expanded to include steel and ore

The Ministry of Economy has confirmed that the Unity affordable ship insurance program, implemented by Marsh McLennan and Lloyd’s of London in cooperation with the Ukrainian government, has been expanded to cover all non-military cargo.

The program will allow insuring not only the sea transportation of grain and other important food products, but also ships transporting ore, steel, and containerized cargo.

«Extending insurance to all non-military cargoes, such as containerized cargo, iron ore, and steel, is extremely important for Ukraine, especially given the increased opportunities for exporting steel products, as this sector has been severely affected by the full-scale invasion,» said Yulia Svyrydenko, First Vice Prime Minister and Minister of Economy of Ukraine.

She recalled that in 2023, compared to 2021, steel production in Ukraine decreased by 3.4 times, while exports of steel products fell several times.

«Also, ship insurance can support our efforts to increase exports of all non-resource products, as strengthening the processing industry and developing non-resource exports are government priorities to strengthen economic resilience,» the First Deputy Prime Minister said.

According to Svyrydenko, the Unity instrument has halved insurance rates in the commercial market. The rate under the mechanism is currently 0.75% for agricultural products.

«We are pleased to expand our public-private partnership with the Ukrainian government. The solution will provide exporters with lower premiums to transport a wider range of goods along the Black Sea trade routes and significant economic benefits for Ukraine,» said John Doyle, President and CEO of Marsh McLennan.

Marsh, Lloyd’s and Ukrainian state-owned banks launched the initial Unity program in November 2023. It offers hull insurance and separate protection and indemnity (P&I) against war risks at significantly reduced premiums compared to standard market prices. In addition to grain, the mechanism now provides coverage for other Ukrainian exports, including ore, steel, electrical equipment, and animal feed.

Unity, in particular, provides for the creation of a fund to compensate the first part of losses to shipowners and charterers by issuing standby letters of credit confirmed by Germany’s DZ Bank by the state-owned Ukrainian banks Ukreximbank and Ukrgasbank.

Lloyd’s of London underwriters led by Ascot and other insurance companies provide up to $50 million for hull and P&I insurance against war risks. Unity is available to clients of all registered Lloyd’s of London brokers.

As GMK Center reported earlier, in February 2024, exports via the Ukrainian sea corridor amounted to a record 8 million tons. In total, since the beginning of its operation (in August 2023), almost 28 million tons of cargo have been received by 42 countries, 19 million tons of which are grains and oilseeds.