Suspension of vessels movement for loading in Ukrainian ports may be due to insurance problems – opinion




On January 3, there were no ships in the Black Sea moving through the "grain corridor" for loading in the ports of Great Odesa, which may be caused by problems with their reinsurance, head of the monitoring group of the Institute of Black Sea Strategic Studies Andriy Klymenko expressed this opinion on his Facebook page.

"Most likely, these are the consequences of the fact that the International Group of P&I Clubs (international mutual insurance association) has abandoned the reinsurance of war-related risks from January 1, 2023. That is, from January 1, the region of Ukraine, Russia, Belarus and Moldova will not be subject to the extension or conclusion of new contracts in terms of losses/damages caused by military actions. Thus, one of three policies required for marine transportation will not be covered – ship-owner's liability risks related to war. That is, it will become (already has become) extremely difficult to charter a vessel to Ukrainian ports (and not only Odesa, but also the Danube ports), the expert wrote.

He added that the coordination council, which includes representatives of the Ministry of Agriculture, the Ministry of Infrastructure, the Ministry of Economy, the Ministry of Finance, the Ministry of Foreign Affairs, state-owned railway operator Ukrzaliznytsia, the State Border Guard Service, the State Service on Food Safety and Consumer Protection, the State Customs Service, the State Service for Transport Safety, USPA and specialized associations, has already discussed this problem and (according to reports by mass media) turned to the government with a proposal to allow Ukrainian insurance companies to pay abroad for reinsurance.

"The logic is clear, but do Ukrainian insurance companies have the appropriate funds... I am not an expert in the field of insurance, but I understand that a large financial fund should be quickly created to insure such risks. I am sure that this is possible only with the intervention of the highest leadership of the state", – A. Klymenko concluded.

We should also note that, according to the message of the Ministry of Infrastructure dated January 3, "new ships to call for loading to the ports of Odesa region" are not expected.