Russian strikes hike insurance costs for Ukrainian ships
Russian missile attacks on container ships in Ukrainian ports have affected ship insurance prices, Reuters reported on Thursday, citing sources in the insurance market. War risk insurance for a ship has increased by about 30% this week compared to last week.
Ukrainian Foreign Minister Andriy Sybiha called the Russian attacks on ships a "deliberate terrorist tactic" on Tuesday. According to the press service of the Ministry of Foreign Affairs, attacks targeting civilian ships aim to weaken Ukraine's economy and bring hunger to millions of people worldwide.
Ships operating in war-torn areas must have war risk insurance policies. Their value is calculated based on the ship's value and changes depending on the threat level. As reported by Reuters, such a policy is usually valid for seven days, but ships also have annual policies subject to different rules.
After the recent Russian attacks, which affected three ships in the Black Sea, insurance prices rose. Data collected by Reuters shows that the insurance premium for ships heading to Ukraine and on the return journey is slightly over one percent of the ship's value. In early September this year, it was 0.7%.
Our clients informed us that some ship owners are canceling contracts, citing the recent attacks, Reuters was told by one of Ukraine's brokers.
Ukrainian authorities deny significant increases
Ukrainian authorities firmly deny that insurance prices have significantly increased recently. "Foreign ships still operate in our ports. We continuously monitor the situation," reported the Ukrainian Ministry of Agriculture in a statement.
The Ukrainian Agricultural Council (UAC) confirmed that the increased number of Russian attacks on ships in Odessa, which transport agricultural products, affects trade in these products and results in increased costs.
