The initiative aims to offer cost-effective insurance solutions to support the global export of essential food supplies, particularly grain, from Ukraine’s Black Sea ports.
Operated and underwritten by insurers based at Lloyd’s of London, Unity is designed to provide comprehensive coverage, offering up to $50 million in hull and separate protection & indemnity (P&I) war risk insurance. The collaboration leverages the support of Ukreximbank and Ukrgasbank, state entities, which will provide standby letters of credit, each confirmed by DZ Bank.
The financial backing, endorsed by the Ukraine Ministry of the Economy, is crucial in providing war risk insurance to shipowners and charterers, especially in regions lacking safe corridors.
Marsh McLennan’s commitment to supporting Ukraine extends beyond the Unity initiative. In June, the company pledged pro-bono services to the Ukrainian government, encompassing the development of a data platform for war risk assessment, strategic advisory services from Oliver Wyman, and catastrophe reinsurance modeling from Guy Carpenter.
Highlighting the humanitarian aspect, Marsh McLennan has underlined its intention to extend the Unity facility to clients of Lloyd’s of London registered brokers. This move is aimed at providing additional support to ongoing humanitarian efforts, alleviating the persistent pressures on supply chains, and enhancing global food security. The launch of Unity marks a significant stride in fostering resilience and stability in the international grain trade, reinforcing the commitment to safeguarding critical food supplies on a global scale.
Speaking about the initiative, John Doyle, President and Chief Executive Officer, Marsh McLennan, commented, saying: “Marsh McLennan is committed to mobilising 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 endeavours. 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.”
“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,” said Marcus Baker, Global Head of Marine, Cargo & Logistics, Marsh.
He continued: “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, 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.”
Author: Joanna England
