How technology enabled Ukrainian grain export during the war

Ukraine plays a crucial role in supplying grains and oilseeds to the global market, producing 10% of the world’s wheat, 40% of which supplies the World Food Program. 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. To help ensure the grain reached its destination, a collaborative process with several industries such as insurance would need to be established.

“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.

By working with Russia and Ukraine, the UN brokered 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

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, allowing 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.

During the AsOne project, all parties (insurance buyers, Marsh, Ascot, Hiscox and other participating insurers and brokers) could access their insurance data quickly, significantly reducing workload compared to paper-based insurance processes.

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.

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. 

In just one month of operation, the deal 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.

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.