Marine Insurers Continue to Support Red Sea and Black Sea Trade Despite Challenges

The International Union of Marine Insurance (IUMI) confirmed in its annual winter meeting that the global marine insurance market continues to support trade in the Red Sea and the Ukraine/Black Sea area, despite ongoing challenges in these regions.

Ukraine has continued to export grain through a shipping corridor in the Black Sea it established after Russia pulled out of a UN-brokered deal guaranteeing the safe movement of vessels in July 2023. Since the end of the so-called “Black Sea grain deal”, approximately 10 million MT of grain has been transported from Ukrainian ports by international tonnage insured by marine underwriters, according to IUMI, even as Russia has damaged Ukrainian shore facilities and mined local waters. The insurance coverage has allowed much of Ukraine’s grain harvest to be exported overseas, stabilizing international agri-commodity prices.

Meanwhile, in the Red Sea, IUMI says affordable hull and cargo insurance products are readily available, ensuring vessel owners have the necessary coverage for those choosing to use the route. Despite ongoing attacks and significant impact on Suez Canal transits and global supply chains, the marine insurance market has been able to adequately provide coverage for both Red Sea/Suez Canal transits and the longer route around the Cape of Good Hope.

However, the IUMI reported that low water levels have restricted movement through the Panama Canal, reducing a vessel’s maximum draught from 50 feet to 44 feet and decreasing daily transits from 34-36 vessels to around 24. This number is expected to drop further to 18 vessels later this month, leading to longer transit times and a possible shortage of delivered goods.

Despite these challenges, the IUMI noted that the growth in global marine insurance premiums in 2022 could potentially boost the 2023 results, which will be published at its annual conference in September. However, the 2024 premium base might be unpredictable due to supply chain issues, weaker consumer confidence, high interest rates, and an economic slowdown in some regions.

IUMI will be celebrating its 150th anniversary at its annual conference in Berlin in September. The conference will feature discussions on the global marine insurance market and pressing issues under the theme “Building on 150 years of enabling global commerce”.

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