Insurers review work in the Black Sea because of the Grain Agreement

Russia’s withdrawal from the Grain Agreement has prompted insurance companies to review their coverage policies for cargo ships operating in the Black Sea.

“Insurers are deciding whether to freeze coverage for all vessels willing to sail to Ukraine after Russia on Monday withdrew from a UN-backed agreement that allowed for military grain exports through a safe corridor in the Black Sea,” writes Ukrinform with reference to Reuters.

The publication notes that the possibility of insurance was critical to support transportation through the corridor. One of the interlocutors of Reuters noted that some insurers will try to take advantage of the situation by significantly raising rates. Others will stop providing coverage.

“The key question is: will Russia mine the territory, which will de facto stop any coverage,” said one of the informed interlocutors.

The London insurance market Lloyd’s of London has already included the Black Sea region in the risk list. In addition, Reuters notes that special surcharges for war risks in the Black Sea must be renewed every seven days.

“They already cost thousands of dollars and will probably increase, and ship owners can refuse their boats to enter the war zone without the consent of the Russian Federation,” the agency concludes.