Black Sea Grain Initiative (2022-2023)
An agreement negotiated in 2022 under the auspices of the United Nations and Turkey to allow Ukrainian grain exports in the midst of war, whose existence depended on setting up specific war insurance.
The Black Sea Grain Initiative, signed in Istanbul on July 22, 2022, allowed grain exports to resume from three Ukrainian ports, blocked since the invasion. It rested on a maritime corridor, joint inspections of vessels in Istanbul and the parties' commitment not to attack them. A political agreement was not enough to make ships sail, however: no owner would commit without hull and cargo insurance covering war risks, which the ordinary market refused or priced prohibitively. An insurance facility was therefore set up in the London market to cover ships and cargoes using the corridor, with dedicated capacity per voyage, and it was this that made the corridor workable. The initiative enabled exports of more than 32 million tonnes of foodstuffs before Russia withdrew on July 17, 2023. Ukraine then opened its own corridor, supported by an insurance scheme combining the Ukrainian state and private insurers. The episode shows how insurance becomes an instrument of foreign policy: underwriting capacity, more than agreements, determined whether ships moved.
Between August 2022 and July 2023, more than a thousand voyages used the corridor, each covered by the London insurance facility within its per-vessel capacity. When Russia withdrew, war premiums on Ukrainian ports jumped again, and traffic resumed only with the scheme backed by the Ukrainian state.
Follow the research
One letter a week. First, the week's underwriting note, when one is published: a dated, argued decision, signed by Paul Bernardski. Then what the observatory published on cyber risk, political risk and insurance. No account, no tracking.
No spam, one-click unsubscribe, no data ever sold.