Costs for hiring ships to transport commodities from the Black Sea have risen by more than one-fifth since the start of the year, Reuters reported, reflecting higher war risk insurance rates, industry sources said. The Black Sea is crucial for the shipment of grain, oil and oil products. Its waters are shared by Bulgaria, Georgia, Romania and Turkey, as well as Russia and Ukraine. Since Jan. 1, when policies are renewed, reinsurers that provide financial protection for insurance companies have added exclusions for ships and planes for Belarus, Russia and Ukraine.
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Six insurance sources told Reuters an exodus of reinsurers from the market had added to unease over the risk of ship seizures by Russia and liabilities related to the war in Ukraine, including floating mines or vessels getting stuck in ports for long periods. Since the introduction of exclusions this year, insurers who provide cover will not have the cushion of reinsurance in the event of big claims. The sources said no vessels had lost their insurance provision, but they expected higher rates that would vary depending on specific circumstances, and that war risk premiums had so far risen by more than 20%.
