Extra war risk insurance (EWRI) for Russian Black Sea ports has increased, UkrAgroConsult reported.
EWRI is an additional cost imposed on shipowners and operators when vessels transit areas with elevated conflict or war risks.
War-risk pricing remained highly volatile, with rates rising alongside increased risk and dropping when risks reduced, UkrAgroConsult wrote.
Premiums for Russian Black Sea ports had increased considerably, with calls to Russian ports priced at 0.65-0.80% value/voyage at the time of the 12 December report.
With Black Sea tension a recognised factor, in the five to six weeks prior to the report, premiums reached 0.45-0.55% of vessel value/voyage in Ukrainian deep sea ports.
Although below the 1.0-1.2% peaks of 2023, the increase reflects increasing war risks, according to the report.
Meanwhile, the EWRI for Romania, Bulgaria and Turkey was much lower.
For the Romanian port of Constanța, the Bulgarian port of Burgas and Turkish ports, war-related risks had increased by an additional 0.10-0.25%, the report said.
UkrAgroConsult wrote that the market also expected a moderate increase in cargo insurance in the Black Sea and Danube region of:
- Base case – insurance rate increases by 3-5%.
- Pessimistic case – increase by 6-10% if geopolitical pressure escalates.
The outlook followed the situation in 2022-2024, when the Grain Corridor blockade had pushed grain cargo insurance up by 5% and higher, the report said.
War-risk premiums for vessels insurance were also expected to rise:
- Base case – increase by 2%.
- Pessimistic case – by 3-5% or more if tensions continued.
During 2023, similar insurance tariffs increases were offset by a sharp rise in short-haul freight on the Danube-Constanța route, reaching as high as US$100/tonne.
At the time of the report, the same routes were around €10 (US$11.72)/tonne, and Danube grain terminals were under-loaded.
Higher insurance premiums were expected to fall directly on exporters and owners, the report said.
Support programmes, including Unity Facility, AGRI-Ukraine, international underwriters (Lloyd’s, IUMI), and donor-funded reinsurance, could stabilise war-risk costs to around 2% even in higher risk environments, UkrAgroConsult wrote.
