In collaboration with the Ukrainian government, Ukreximbank, Ukrgasbank, and DZ Bank, Marsh McLennan has announced Unity, a new insurance facility designed to offer cost-effective insurance for exporting grain and other essential food supplies from Ukraine’s Black Sea ports.
Lloyd’s of London-based insurers will underwrite Unity, offering up to $50 million in hull and separate protection and indemnity (P&I) war risk insurance.
Standby letters of credit will be provided by Ukreximbank, the State Export-Import Bank of Ukraine, and Ukrgasbank, a state-owned Ukrainian bank, each confirmed by DZ Bank.
This support, backed by the Ukraine Ministry of the Economy, aims to supply shipowners and charterers with war risk insurance amidst the lack of safe corridors.
Norton Rose Fulbright, a prominent international law firm, offered advisory services for this initiative.
Similar to the ‘As One’ facility initiated in July 2022 under the now inactive Black Sea Grain Initiative, Marsh will expand the new Unity scheme to clients of Lloyd’s of London registered brokers.
This extension aims to bolster ongoing humanitarian efforts and reduce the strain on supply chains and global food security.
John Doyle, President and Chief Executive Officer, Marsh McLennan, said, “Marsh McLennan is committed to mobilizing our unique expertise to support global food security and stability. The launch of this insurance facility will especially benefit the developing nations that buy much of Ukraine’s grain and also help Ukraine’s future recovery and reconstruction endeavors. Through these efforts, we are fulfilling our purpose as a company to give our communities and clients the confidence to thrive.”
Denys Shmyhal, Prime Minister of Ukraine, said, “The launch of the Unity facility will enable Ukraine to provide vital food supplies to the world at the same time as supporting the Ukrainian economy and keeping the Black Sea open for international trade. This partnership between the Ukrainian government, Marsh McLennan and Lloyd’s of London is a sign of confidence in our economy and demonstrates that Ukraine is open for business.”
Today’s unveiling comes after the declaration in June by Marsh McLennan to offer services without charge to the Ukrainian government. This includes developing a data platform to evaluate war risks in Ukraine, offering strategic consultancy from Oliver Wyman, and providing catastrophe reinsurance modelling by Guy Carpenter.
Marcus Baker, Global Head of Marine, Cargo & Logistics, Marsh, said, “The creation of this public-private partnership, with insurers working in tandem with the Ukrainian government and its banks, will accelerate the urgent resumption of vital grain exports amid the ongoing effects of this brutal conflict. Unity’s unique structure will enable underwriters to price risks at more affordable levels than those experienced in recent months.”
John Neal, CEO, Lloyd’s of London, added, “Lloyd’s welcomes the establishment of this insurance facility, which brings together the expertise of our market to provide an innovative solution that will ensure the safe transport of Ukrainian grain and agricultural products out of the Black Sea and help alleviate global food insecurity.”