The Lloyd’s Market Association’s Joint War Committee (JWC) – an advisory board made up of market participants that assesses and designates regions of heightened risk – has added all territorial waters of the Russian Federation to its “listed areas” of war, piracy, and terrorism hazards, according to The Insurer magazine.
The publication reported that shipowners “now face rates of close to 5 per cent of the insured value of a vessel for seven days’ cover within these waters, with some vessels charged even higher rates for voyages through northern parts of the Black Sea. Comparatively, during the first Gulf War rates on line typically stood at 1-2 percent of insured value for the short period ships would travel through the Strait of Hormuz/Gulf region.”
Ukrainian and Russian waters, as well as shipping lanes near Romania and Georgia have been added to the list of high-risk areas. Lloyd’s and London carriers are lead markets for marine war cover, however it has been suggested that some carriers have now stopped accepting new business, with reports of some insurers no longer quoting for war cover for existing clients.
The Insurer reported that: “vessels that remain trapped in Ukraine are thought to have a hull value of around $750mn. While policy wording varies, typically if a vessel has been taken and has not been returned after six months, the owner has the chance to claim a total loss on their marine war policy. However, some contracts require 12 months before a total loss is allowed. While shipowners and charterers pay an annual war risk insurance cover, breach premiums come into play when a vessel enters an excluded area which poses enhanced war risks.”
According to the JWC, 84 ships are currently in the affected region, which it said are “effectively stuck for the present”. An LMA advisory on mines has also been released. The overall situation is unpredictable and dynamic and as a result, the JWC is meeting more frequently to keep appraised of developments. The Listed Areas will be re-adjusted if required by circumstances but the sitation for now is that several casualties are known near Odessa including: Namura Queen, Millennial Spirit and Yasa Jupiter.