War risk insurance: Unity program extended to non-military cargoes

War risk insurance: Unity program extended to non-military cargoes

From now on, the Unity insurance program will cover not only sea transportation of grain and other important food products, but also ships carrying any non-military cargoes.

This was reported by the Ministry of Economy, Ukrinform saw.

"Extending insurance to all non-military cargoes, such as container transportation, iron ore, and steel, is vital for Ukraine, especially in view of expanding opportunities for the export of steel products, since this sector has been badly affected by the full-scale invasion. In 2023, steel output in Ukraine decreased by 3.4 times against 2021, and the export of metallurgical products – by several times. Also, ship insurance can support our efforts to increase the volume of exports of all non-raw products," said Yuliia Svyridenko, First Deputy Prime Minister, Minister of Economy of Ukraine.

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According to her, thanks to the Unity tool, insurance rates on the commercial market have halved. The rate within Unity currently stands at 0.75% for agricultural products.

All international brokers have access to the Unity insurance tool so ship owners and Ukrainian exporters can reach out to any of them.

The Unity program, designed to provide affordable war risk insurance for the supply of grain and other essential food commodities worldwide, launched in November 2023. Unity offers CASCO insurance and separate protection and indemnity (P&I) against war risks at significantly reduced premiums compared to standard market prices. In addition to grain, Unity now provides coverage for Ukraine's other export products, including iron ore, steel, electrical equipment, and animal feed.

The Ministry of Economy notes that the mechanism for reducing the cost of maritime transportation insurance in Ukraine’s territorial waters Unity provides for establishing a fund to compensate fir the first part of losses to ship owners and charterers by issuing standby letters of credit by the state Ukrainian banks, Ukreximbank and Ukrgasbank, confirmed by Germany’s DZ Bank

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The Ministry informs that Lloyd's of London underwriters led by Ascot and other insurance companies provide up to $50 million for CASCO and P&I insurance against war risks. Unity is available to clients of all registered Lloyd's of London brokers, providing additional support to ongoing humanitarian efforts and mitigating the aggressor's pressure on supply chains and global food security.

As reported, the Financial Stability Council approved the concept of creating a war risk insurance system in Ukraine.

Photo from agropolit.com

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