Thread by @exit266

War Risk Insurance

It’s been a minute, let’s talk about it.⬇️

Ships sailing through conflict zones are required to carry War Risk Insurance. For a while when the Ukrainian Corridor started it was so expensive that Ukraine had to create and fund their own insurance in order to make it affordable for ships to operate…

*Side note, ships that are stateless or flagless nullify their insurance. Most Russian Shadow Fleet tankers either don't have insurance (of any type) or it's void.*

Ironically in the end the insurance market had to lower their prices to meet Ukraine’s price and the government insurance was under used. It was a monumental task to negotiate and change legislation and then fund the facility but they did it.

Ukraine has since repurposed some of those funds to offer War Risk Insurance to land based companies that want to invest in Ukraine and build and operate there. These programs have enabled Ukraine’s economy.
odessa-journal.com/ukraine-to-lau…

For a time War Risk Insurance in the Black Sea was cheaper than transiting the Red Sea. Ukraine did such a good job at keeping ships safe that companies didn’t need to charge much of a premium for ships sailing in and out of Ukraine.

That changed with the Ukrainian USV attacks on the KAIROS and the VIRAT. Rates climbed for both Ukrainian and Russian ships sailing in the Black Sea. There are varying numbers being bandied about, some as high as 1%.
reuters.com/business/energ…

This matters because the person buying the grain has this cost transferred to them. Your grain could go from cheap to mediocre and cause buyers to rethink purchasing Ukrainian grain.
insurancebusinessmag.com/us/news/breaki…

This pricing change is not permanent. A month of calm with no strikes will likely cause prices to trend down again. Keeping Grain from Ukraine at a reasonable price point for buyers so Ukraine can keep exports up should be of the highest priority