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In the wake of Russia’s continued military aggression against Ukraine, the marine insurance market of London has included all of Russia’s waters on its list of high-risk areas.
The guidance comes from the Joint War Committee (JWC), which represents the interests of those who write marine hull war business in the London market.
JWC is comprised of underwriting representatives from both the Lloyd’s and International Underwriting Association (IUA) company markets and its advisory impacts underwriters’ decisions over insurance premiums.
The latest advisory on Russian waters is likely to increase the cost of shipping further pressurising Moscow, which uses Baltic and Black Sea ports for oil and grains exports.
Notably, ships sailing through high-risk waters are required to inform underwriters and have to pay an additional premium for insurance cover.
After Russia invaded Ukraine last month, JWC added Russian and Ukrainian areas around the Black Sea and the Sea of Azov to its list of areas deemed as high-risk for ships that are exposed to war, terrorism and related risks.
“From time to time, the JWC updates and disseminates the listed areas – these are areas where owners are required to notify underwriters of voyages. Rating is a matter for individual negotiation between underwriters and brokers and the JWC plays no role in that,” JWC’s statement read.
Marine insurers are expecting a rise in premiums as the new advisory will “add to the complexities of trading with Russia”, Reuters reported citing marine insurance sources.
Last week, Ukraine reached out to global marine insurance firms to withdraw coverage of ships carrying Russian fossil fuels.