Black Sea War Risk Insurance Soars 250% After Ship Attacks

Insurance rates for ships calling at ports in the Black Sea are surging after a series of Ukrainian attacks on vessels with links to Moscow.

The cost of covering visits to Russian ports in the Black Sea has jumped more than threefold, according to Marsh, the world’s largest insurance broker. Rates were between 0.25% and 0.3% of the value of the ship prior to the recent incidents, Marsh said.

Underwriters are now charging as much as 1% for some Ukrainian ports in the Black Sea, according to two people involved in the market, who spoke on condition of anonymity.

Ukraine has claimed attacks on two tankers from Russia’s so-called shadow fleet — vessels that operate in secrecy to skirt sanctions. There have been two other incidents also involving Moscow-linked ships since the end of last week.

“For Russian port calls, underwriters are pricing in a broader range of possible strike locations and a higher likelihood of repetition,” said Munro Anderson, Head of Operations at Vessel Protect, which is part of Pen Underwriting and one of the world’s largest marine war risk insurance specialists. “As strikes escalate, so does the probability of Russian retaliation against ships connected to Ukraine.”

The blasts, three of which took place in the Black Sea, come against a backdrop of strikes on wider Russian oil infrastructure that have elevated the danger of sailing in the region over the last few weeks. President Vladimir Putin said on Tuesday that Russia could retaliate.

Romania’s defense ministry said Wednesday that divers carried out a mission to neutralize a Sea Baby drone 36 miles east of the city of Constanta, underscoring the risks to shipping for Black Sea nations that aren’t Russia and Ukraine too.

Rates “have been seen to grow steadily and in direct response to further attacks which appear increasingly to target vessels as well as port and terminal infrastructure,” according to Dylan Mortimer, Marsh’s Marine Hull UK War Leader.

Photo: Ships in the Black Sea. Photographer: Daniel Mihailesu/Getty Images