Marsh McLennan announces ‘Unity’ Black Sea grain insurance deal with Ukraine

Marsh McLennan has announced a new public-private partnership called Unity to enable grain exports from Ukraine “at scale” and “to support global food security and stability”.

The insurance and reinsurance broker launched the facility to provide affordable insurance to support the export of grain and other critical food supplies globally from Ukraine’s Black Sea ports.

Underwritten by Lloyd’s insurers, Unity will provide up to US$50m in hull and separate protection & indemnity (P&I) war risk insurance.

“The launch of this insurance facility will especially benefit the developing nations that buy much of Ukraine’s grain and also help Ukraine’s future recovery and reconstruction endeavours,” said John Doyle, President and CEO of Marsh McLennan.

“Through these efforts, we are fulfilling our purpose as a company to give our communities and clients the confidence to thrive,” Doyle added.

Unity is a collaboration with the Ukrainian government, the Export Credit Agency of Ukraine, Ukreximbank, Ukrgasbank and DZ Bank, and Marsh McLennan, the broker said.

Bankers and the Ukrainian government are backing the scheme through the use of underlying letters of credit.

Ukreximbank, the State Export-Import Bank of Ukraine, and state-owned Ukrainian bank Ukrgasbank will provide standby letters of credit, each confirmed by DZ Bank, to support the facility which itself is backed by the Ukraine Ministry of the Economy.

Marsh McLennan said this arrangement would provide shipowners and charterers with war risk insurance in the absence of safe corridors.

As with the ‘As One’ facility launched to provide insurance under the now defunct Black Sea Grain Initiative in July 2022, Marsh said it would extend the new Unity facility to clients of Lloyd’s registered brokers, to provide added support to ongoing humanitarian efforts and alleviate continued pressure on supply chains and global food security.

Prime Minister of Ukraine, Denys Shmyhal, said: “The launch of the Unity facility will enable Ukraine to provide vital food supplies to the world at the same time as supporting the Ukrainian economy and keeping the Black Sea open for international trade.

“This partnership between the Ukrainian government, Marsh McLennan and Lloyd’s of London is a sign of confidence in our economy and demonstrates that Ukraine is open for business,” he added.

The Unity facility follows June’s announcement when Marsh McLennan committed to provide services on a pro-bono basis to the Ukrainian government, which included building a data platform for the assessment of war risks in Ukraine, broking and advisory services from Marsh and Oliver Wyman, respectively, and catastrophe reinsurance modelling from Guy Carpenter. Legal firm, Norton Rose Fulbright, provided advisory services for the facility.

Marcus Baker, global head of marine, cargo and logistics, Marsh, said: “The creation of this public-private partnership, with insurers working in tandem with the Ukrainian government and its banks, will accelerate the urgent resumption of vital grain exports amid the ongoing effects of this brutal conflict.

“Unity’s unique structure will enable underwriters to price risks at more affordable levels than those experienced in recent months,” Baker added.

CEO of Lloyd’s, John Neal, added: “Lloyd’s welcomes the establishment of this insurance facility, which brings together the expertise of our market to provide an innovative solution that will ensure the safe transport of Ukrainian grain and agricultural products out of the Black Sea and help alleviate global food insecurity.”