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The Unity insurance programme covering grain exports from Ukraine has been expanded to include all outgoing non-military shipments, as private and public sector insurance continues to play a bigger role in Western support for the war-torn country.  

The facility was launched in November last year by the government of Ukraine, Marsh, and three commercial lenders, with a limit of US$50mn to provide more affordable hull and war risk insurance for ships carrying grain, one of Ukraine’s most important exports.  

An expansion announced on March 1 means shipments of other key exports such as iron ore, steel, animal fodder and containerised goods will also qualify for “significantly reduced premiums compared to standard market pricing”, according to a statement from Marsh.  

Since Russia’s invasion of Ukraine two years ago, Ukraine’s export industries have been hamstrung by sky-high maritime insurance costs due to the risk of mercantile shipping coming under deliberate attack, or being inadvertently struck amid the fighting. 

Ukraine’s grain exports hit another hurdle last year when Russia pulled out of the UN-backed grain export initiative which had previously facilitated hundreds of grain shipments from Black Sea ports. 

The structure and cover limit of Unity remain the same. The government of Ukraine provides a first loss compensation fund through standby letters of credit issued by state-owned Ukreximbank and Ukrgasbank, and confirmed by Germany’s DZ Bank.  

A group of UK insurers, led by Ascot, provide the hull and war risk cover, which is available through all insurance brokers registered at Lloyd’s. Marsh created the facility and arranged the underwriting capacity.  

“Expanding insurance to cover ships carrying all non-military cargo is extremely important for Ukraine, especially in terms of exporting metallurgical products, as the full-scale invasion has heavily affected this sector,” says Ukraine’s economy minister Yulia Svyrydenko. “In 2023, compared to 2021, steel production decreased by 3.4 times, and exports of metallurgical products decreased several times.” 

“Insuring vessels backs our efforts to increase the volume of all non-raw material product exports, in particular iron ore and steel,” she adds. “Strengthening the processing industry and developing non-raw material exports are priorities for the government to enhance our country’s economic resilience.” 

Most public and private insurers withdrew cover for Ukraine in the immediate aftermath of Russia’s invasion, but over the last year the government of Ukraine and its allies have looked to the insurance market as a tool for nursing the country’s export sector through the war, as well as helping finance a reconstruction task estimated by the World Bank last year to cost over US$400bn.  

Export credit agencies of countries including Belgium, Finland, Italy and Japan have recently announced they will allocate capacity to back investment such as exports to Ukraine. Countries such as Canada, the UK and US also have large limits available for Ukraine cover. 

Separately, the UK government and the European Bank for Reconstruction and Development are working on a war risk insurance scheme for the rebuilding of damaged infrastructure in Ukraine, although details of the plans are not yet available.