Marsh McLennan, Ukraine, Lloyd’s Expand Insurance Facility for Non-Military Shipments

Insurance broker Marsh McLennan, the Ukrainian government and Lloyd’s have announced a major expansion of the Unity insurance facility – a public-private partnership originally launched in November 2023 to provide war risk insurance for grain shipments and other critical food supplies.

The facility has now been expanded to provide “affordable war risk insurance for ships carrying all non-military cargo” – including leading Ukraine exports such as iron ore, steel, electrical equipment, animal fodder and containerized shipments, said Marsh McLennan.

Unity offers hull and separate protection & indemnity (P&I) war risk insurance at significantly reduced premiums compared to standard market pricing, Marsh McLennan affirmed.

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Underwritten by Lloyd’s insurers and other London-based insurers, and led by Ascot, Unity provides up to US$50 million in hull and protection & indemnity war risk insurance. Unity is available to clients of all Lloyd’s registered brokers, to provide added support to ongoing humanitarian efforts and alleviate continued pressure on supply chains and global food security.

Standby letters of credit created by the state-owned Ukrainian banks Ukreximbank and Ukrgasbank, each confirmed by DZ Bank, will continue to provide a first loss compensation fund to shipowners and charterers which is supported by the government of Ukraine, the broker said.

“Marsh McLennan is dedicated in our support of Ukraine – helping it attract global investment to rebuild the country, and recover from the devastating impact of war on its people and economy,” commented John Doyle, president and chief executive officer, Marsh McLennan.

“We’re pleased to expand this public-private partnership with the Ukrainian government. It will provide exporters with lower premiums to ship a wider range of goods through its Black Sea trade routes and deliver major economic benefits to Ukraine,” he added.

“Expanding insurance to cover ships carrying all non-military cargo is extremely important for Ukraine, especially in terms of exporting metallurgical products, as the full-scale invasion has heavily affected this sector. In 2023, compared to 2021, steel production decreased by 3.4 times, and exports of metallurgical products decreased several times,” according to Yulia Svyrydenko, first deputy prime minister of Ukraine and minister of economy.

“Insuring vessels backs our efforts to increase the volume of all non-raw material product exports, in particular iron ore and steel. Strengthening the processing industry and developing non-raw material exports are priorities for the government to enhance our country’s economic resilience,” Svyrydenko added.

“Since the invasion of Ukraine, Lloyd’s has partnered with the United Nations, governments, regulators and insurers to keep economies and supply chains moving in spite of difficult circumstances,” said John Neal, Lloyd’s CEO. “New partnerships between the public and private sector, including the expansion of the Marsh Unity facility, are the hallmark of the Lloyd’s market, bringing insurance experts and policymakers together to solve complex risks.”

Source: Marsh McLennan

Photograph: In this photo provided by the Ukrainian Infrastructure Ministry Press Office, the Razoni cargo ship, under the flag of Sierra Leone, with 26,000 tons of the Ukrainian corn aboard, leaves the port in Odesa region, Ukraine, Monday, Aug. 1, 2022. (Ukrainian Infrastucture Ministry Press Office via AP)

Topics Excess Surplus Lloyd's Ukraine