London’s marine insurance market has expanded the area of the Black Sea it considers high risk as attacks linked to the Russia-Ukraine war intensify, according to an advisory issued last week. The move could further increase insurance costs for vessels operating in the region, a vital maritime corridor for shipments of grain, crude oil and refined petroleum products.
The Black Sea is bordered by Russia, Ukraine, Bulgaria, Georgia, Romania and Türkiye, making it a crucial artery for regional and international trade. Russia and Ukraine have stepped up attacks on commercial shipping in the past two months, marking a further escalation of the conflict, now in its fifth year.
The Joint War Committee (JWC), which comprises underwriting members of the Lloyd’s Market Association and representatives of the London company market, said it had expanded its reporting requirements to cover the entire Black Sea. Head of marine and aviation at the LMA and secretary of the JWC, Neil Roberts, said the coastal waters of Russia and Ukraine were already included in the committee’s listed areas, but the latest move extends the reporting requirement across the wider Black Sea.
The committee’s guidance can influence insurers’ assessment of war risks and, consequently, the premiums charged to shipowners and operators. War risk premiums have surged in recent weeks, adding hundreds of thousands of dollars to the cost of some seven-day voyages, as attacks on commercial vessels in the Black Sea have increased.
The widening of the reporting area comes as the security risks surrounding one of the world’s key maritime trade routes continue to intensify, raising concerns over higher shipping costs and potential disruption to the movement of vital commodities.