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The Challenge
Millions of people have been affected by the war in Ukraine, from refugees to farmers, to logistics, aviation and marine companies. Ukraine plays a crucial role in supplying grains and oilseeds to the global market, with 10% of the world’s wheat and 40% of the wheat supplies of the World Food Program being grown and shipped from there.
In February 2022, when Russia blocked ships from leaving Ukrainian ports, many millions of people would have faced famine if the Ukrainian grain wasn’t shipped to Africa. The global food crisis was imminent without a secure marine route to export grain from Ukraine.
According to the World Food Programme, the number of acutely food-insecure people reached a record 345 million in 82 countries as a result of the Ukrainian crisis.
Without safe means of reaching international markets, Ukrainian farmers would be deprived of reaping the rewards of their hard work after harvesting crops under constant Russian bombings and artillery attacks.
“Cargo and war insurance will play a pivotal role in the broader resumption of grain and other vital food exports from Ukraine’s Black Sea ports,” said David Roe, Head of UK Cargo at Marsh.
The Solution
By working with Russia and Ukraine, the UN was eventually able to broker a deal allowing the grain to be transported through the contested waters. By implementing a “safe corridor” system, the shipments are expected to be guaranteed against bombing or other threatening actions.
Lloyd’s market brought together skilled teams who mobilised quickly and facilitated a bold solution creating the AsOne Ukrainian grain facility in partnership with the UN. Brokered by Marsh, with Ascot as the lead underwriter and Insurwave as Ascot’s technology partner, AsOne increased the speed to cover risk with access to real-time data on Insurwave’s platform. Since AsOne was launched in August 2022:
- More than 100 cargo policies (representing over 80 shipments) have been issued and tracked on Insurwave;
- Almost 1.5 billion dollars of goods have been covered and transported safely.
To ensure smooth sailing of this humanitarian venture, coverage for vital grain and food products under the Black Sea treaty between Russia and Ukraine is provided by the Marine Cargo and War facility of Ascot Underwriting Ltd. Founded in 2001, Ascot is a Lloyd’s of London syndicate and a leading global specialty insurance underwriter.
“The ‘AsOne’ Ukrainian grain facility is a perfect example of how Lloyd’s market uniquely brings together skilled teams that are able to mobilise at speed and facilitate a bold solution in a time of crisis.“ says Chris McGill, Head of Cargo at Ascot
The collaboration enabled by the use of Insurwave’s platform unlocked a new level of efficiency for all parties involved in the AsOne Ukrainian grain facility. It allows a better flow of information and faster, more accurate decision-making thanks to the visualisation of live risk data and increased speed to cover these risks through automation.
The Benefits
Digitisation
Insurwave technology made it possible to simplify the complex specialty insurance process and transfer immensely challenging risk by connecting all parties to real-time, granular asset information they wouldn’t otherwise have access to. As a result, the whole process, from idea to issuing coverages, took weeks instead of months—something that is unheard of.
The core Insurwave solutions and functionalities that made this project a success:
- Customised war zone mapping: For the 20+ insurance companies participating in the AsOne facility, Insurwave enables live tracking of exposure as each asset travels in and out of high-risk zones and delimitation of custom zones to reflect UN safe corridors and inspection areas.
- Providing data for optimal marine route planning: Insurwave processes geospatial data to ensure ships travelling through the Black Sea take optimal paths. This helps vessels optimise their voyage according to cost, speed and distance criteria.
- Reducing the time and effort needed to collate, read, understand, and process data associated with insurance coverage results in better and quicker decisions.
Transparency & Accuracy
Without data, everything is left to guesswork, which is inefficient and should be something from the past.
- Real-time risk behaviour overview: Insurwave tracks live asset-level risk information and automatically assesses the impact on the cover, from automatic declarations of war breaches required under marine war policies to automatic premium adjustments.
- Transparent risk exposure data: Using the live Risk Map, ship owners and insurers can see where the cargo is in real time. All the parties involved can visualise the ship’s departure from Ukrainian ports Chornomorsk, Odesa and Pivdennyi and track the time spent in locations en route in real-time instead of depending on monthly reports.
A Connected Insurance Experience
During the AsOne project, all parties (insurance buyers, Marsh, Ascot, Hiscox and other participating insurers and brokers) can access their insurance data faster, significantly reducing workload compared to paper-based insurance processes.
- Connected insurance management: Because insurance buyers, brokers and insurers are connected to the same data, reconciliation and data disputes are over. Insurwave provides a single source of truth and complete transparency to all parties.
- Sensitive insurance data is kept secure with data privacy technology that adds an extra layer of protection while ensuring everyone has the proper access to the correct information.
Ships entering Ukrainian ports are usually required by their banks to have hull and cargo war cover, which is renewed every seven days. Increased transparency and automated communication between parties allowed this complex specialty insurance operation to be smooth and on time.
The Outcome
With the AsOne Ukrainian grain facility, shippers and ship owners could get grain supplies covered and shipped in weeks by leveraging the simplified process to buy and manage insurance enabled by Insurwave. The humanitarian angle of the problem played an essential role in this ambitious project’s success and the solution’s architecture. Without Insurwave’s platform, this project may not have been completed on time, considering a standard insurance buying process can take months.
In just one month of operation, this deal has facilitated over 100 ships safely crossing the Black Sea, shipping over 2 million metric tons of agricultural exports to global markets. The deal is a marked success and has concretely improved global food security, lowering prices, stabilising markets, and increasing availability. – U.S. Department of State
Thanks to the joint efforts of Lloyd’s, Ascot, Marsh and Insurwave, cargo ship owners regained confidence to trade in and out of the war-stricken region due to the assurance that a globally recognised insurance policy and an advanced and secure insurance data management platform gave them.