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Ukraine war risk ship premiums rise after attack, sources say

War risk insurance premiums have risen sharply after a missile damaged a merchant ship in the Ukranian port of Pivdennyi, three industry sources said.

After withdrawing from a U.N.-backed deal in July that guaranteed safe shipments of Ukrainian grain via the Black Sea, Ukraine says Russia has repeatedly attacked Ukrainian port infrastructure.

It said on Wednesday a Russian missile hit the Liberian-flagged KMAX Ruler when it was loading iron ore. Four crew were injured and the Ukrainian pilot was killed, making it the first fatal strike involving a commercial ship in many months.

Ukraine is listed as a high-risk area by marine insurers and an additional war risk insurance premium has to be renewed typically every seven days. Vessels also have to have an annual war policy.

Three insurance sources said the premiums had crept up with two saying they had risen to 3% of the value of the vessel from around 1% before the attack, which would add tens of thousands of dollars in extra costs.

Ukraine’s temporary “humanitarian corridor” for cargo vessels, which was set up after Moscow exited, was still working despite the attack, Deputy Prime Minister Oleksandr Kubrakov said on Thursday.
“The pilot died when running down the stairs after the incident so the exact cause is not clear yet,” a source with knowledge of the incident said, asking not to be named.

The source said it was possible the cargo could still be shipped once the damage was assessed.

A fourth insurance industry source estimated the vessel had been insured for $15 million with damage seen at $4 million without liabilities for the crew.

Philippines-based Venus Mare, listed on shipping databases as the vessel’s owner, could not be located for comment. “It is a stark reminder of the fragility of maritime safety and security and this act of aggression, capable of inflicting loss of innocent lives, must be vehemently condemned,” dry bulk shipping industry association INTERCARGO said on Thursday.

“Bulk carriers, manned by innocent seafarers, represent the epitome of non-combatant vessels.”
Source: Reuters (Reporting by Jonathan Saul, Carolyn Cohn and Karolina Tagaris; editing by Barbara Lewis)

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