Affordable insurance supporting the export of grain and other critical food supplies globally from Ukraine's Black Sea ports will be made available through a new US$50 million facility developed by insurance broker Marsh , Lloyd's of London, insurers and Ukrainian state financial institutions.

Letters of credit (L/Cs) are central in the Unity facility which is expected to enable Ukraine to provide vital food supplies to the world - especially benefitting the developing nations that buy much of Ukraine's grain - at the same time as supporting the Ukrainian economy and keeping the Black Sea open for international trade.

L/Cs' central role

Underwritten by insurers based at Lloyd's of London, Unity will provide up to US$50 million in hull and separate protection & indemnity war risk insurance.

Ukreximbank, the Ukraine's state export credit agency and state-owned Ukrainian bank Ukrgasbank will provide standby L/Cs. Each of these will be confirmed by Germany's DZ Bank, to support the facility which itself is backed by Ukraine's economy ministry.

This will provide shipowners and charterers with war risk insurance in the absence of safe corridors.

More insurers expected

While Marsh created the facility and arranged the underwriting capacity, the insurer says it will extend the new Unity facility to clients of Lloyd's of London registered brokers.

This aims to provide added support to ongoing humanitarian efforts and alleviate continued pressure on supply chains and global food security.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.