IUMI says marine insurers committed to supporting Ukraine and Red Sea trade

The International Union of Marine Insurance (IUMI) has stated that the global marine insurance market is continuing to support trade in the Red Sea and the Ukraine/Black Sea area despite serious challenges in both regions. The statement comes as US, UK and Israeli ship owners struggle to cope with rising war risk premiums and tightening conditions as insurers back away. But IUMI said hull and cargo underwriters are successfully supporting trade. It revealed that since the cessation of the Ukraine grain corridor in September 2023, some ten million metric tons of grain have been successfully lifted from Ukrainian ports using international tonnage insured by marine underwriters. “This is despite Russia damaging Ukrainian shore-side facilities and mining local waters. Insurance cover has contributed to much of the Ukrainian grain harvest being exported overseas which, in turn, has helped stabilise international agri-commodity prices,” said the association. “In the Red Sea, the insurance market is providing hull and cargo products at affordable prices and vessel owners are able to obtain the cover they require. The attacks are continuing despite military intervention but, fortunately, vessel casualties have not been catastrophic,” said IUMI. “The impact on Suez Canal transits and global supply chains are significant but this has not affected the ability of the marine insurance market to provide adequate cover – both for Red Sea/Suez Canal transits or for the longer route around the Cape of Good Hope,” it added. IUMI also reported on restricted movement through the Panama Canal caused by low water levels, leading to a restriction on a vessel’s maximum draught from 50 feet to 44 feet. The association said that this has reduced daily transits to around 24 vessels from a norm of 34 to 36 ships. Sailings are expected to decrease further to 18 vessels later this month. The result is longer transit times as vessels are re-routed, and voyages have been further compromised by events in the Red Sea. “The convergence of these two crises comes in advance of the export surge around the lunar new year shutdowns in Asia. Expected consequences may include a shortage of delivered goods, containers out of position, gridlock at freight handling terminals and congestion at ports,” warned IUMI. Meanwhile, news agency Reuters reported this week that David Smith, head of hull and marine liabilities at McGill and Partners, said war underwriters have raised the premiums they charge to US, UK and Israeli shipping companies transiting the Red Sea by as much as 50%. “The ships that have so far had problems, almost all of them have got some element of Israeli or US or UK ownership in there somewhere,” added Marcus Baker, global head of marine and cargo with Marsh, according to Reuters. Baker also told the news agency that there is “exclusionary language” being introduced for cover involving US, UK and Israeli interests. “We are seeing this, but it's not everywhere because there are certainly markets out there that are not putting that language on,” he added.

IUMI says marine insurers committed to supporting Ukraine and Red Sea trade

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