This step will increase export opportunities for steel products
The Ministry of Economy confirmed that the Unity affordable marine 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 ensure not only the maritime transport of grains and other important food products, but also ships that transport ore, steel and containerized cargo.
“Extending insurance to all non-military cargo, such as containerized cargo, iron ore and steel, is extremely important for Ukraine, especially given the greater export opportunities for steel products, as this sector was severely affected by the invasion in large scale,” said Yulia Svyrydenko First Deputy 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.
“In addition, shipping insurance can support our efforts to increase exports of all non-resource products, as strengthening the manufacturing industry and developing non-resource exports are government priorities to strengthen the economic resilience", said the First Deputy Prime Minister.
According to Svyrydenko, the Unity instrument has halved insurance rates in the commercial market. The mechanism rate 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 for transporting a wider range of goods along 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 separate hull and protection and indemnity (P&I) insurance against war risks at significantly reduced premiums compared to normal market prices. In addition to cereals, the mechanism now offers coverage for other Ukrainian exports, including ore, steel, electrical equipment and animal feed.
Unity, in particular, envisages the creation of a fund to compensate the first part of the losses suffered by shipowners and charterers through the issuance of standby letters of credit confirmed by Germany's DZ Bank by the Ukrainian state 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 customers of all registered Lloyd's of London brokers.
As the GMK Center previously reported, in February 2024, exports through the Ukrainian maritime 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 grains and oilseeds.
