Ukraine's Maritime Insurance Strategy: A Lifeline for Grain Exports

Ukraine is considering additional insurance for ships carrying food exports to counter Russian disruption to seaborne trade. Attacks have halted exports, threatening storage capacity and farmers' livelihoods. Kyiv is collaborating with international partners on risk insurance mechanisms and exploring loans secured by stored grain as a solution.

Ukraine is exploring the potential for additional insurance coverage on ships exporting food, aiming to rejuvenate seaborne trade, which has been severely affected by Russian aggressions targeting vessels and port infrastructure, according to a farm lobby group and a major farmers' union.

Since the summer, Russia has intensified its assaults on Ukrainian ports and commercial ships, effectively halting the nation’s maritime exports. Ukraine historically transported nearly 90% of its exports via Black Sea ports. The ongoing conflict has slashed agricultural exports by 60%, posing severe risks to the 2027 planting season and future harvests.

To safeguard the stability of export corridors and maritime safety, Ukraine introduced ship-insurance mechanisms. A state compensation scheme was enacted in 2023 to address damages incurred from attacks. Additionally, the Unity Facility, a solution for war-risk insurance, emerged through collaboration with the government, Marsh McLennan, and underwriters at Lloyd's of London. Farmers' financial health may also be improved through loans secured against stored grain, allowing them to bypass selling at low domestic prices.