London marine insurers add Russian, Ukrainian waters to high risk list
London’s marine insurance market on Tuesday added the Ukrainian and Russian waters around the Black Sea and Sea of Azov to its list of areas deemed high risk, a circular showed.
Their guidance is watched closely and influences underwriters’ considerations over insurance premiums.
The Joint War Committee, which comprises syndicate members from the Lloyd’s Market Association and representatives from the London insurance company market, normally meets every quarter to review areas it considers high risk for merchant vessels and prone to war, strikes, terrorism and related perils.
“The application of this list on individual contracts will be a matter for specific negotiation,” the circular issued on Tuesday said, without providing further detail.
Russia said on Tuesday some of its troops were returning to base after exercises near Ukraine and it mocked repeated Western warnings about a looming invasion, but NATO said it had yet to see any evidence of de-escalation.
Apart from the critical sea lanes around Ukraine, ensuring insurance cover for air flights is another factor at play.
Two Ukrainian airlines disclosed problems in securing insurance for some of their flights on Monday.
A senior official with the LMA, which represents underwriters at the world’s leading insurance market Lloyd’s of London, said on Monday aviation insurers had told clients they could give just 48 hours notice to exclude Ukraine but that did not mean cover had been terminated.
A Lloyd’s of London spokesperson said separately on Tuesday that “underwriters will react and adjust their risk appetite to reflect the current changing circumstances”.
“As far as Lloyd’s is concerned, these are sensible actions that we would expect underwriters in the market to be taking,” the spokesperson added, when asked about Ukraine cover.
Airlines and the leasing companies that control billions of dollars’ worth of passenger jets are drawing up contingency plans for a freeze in business with Russia if the standoff on Ukraine’s border boils over into a military conflict.
Source: Reuters (Reporting by Jonathan Saul; Editing by Andrew Cawthorne, Barbara Lewis and Jonathan Oatis)