Russia and Ukraine waters deemed high risk by shipping insurers

Shipping lanes in the Black Sea and Sea of Azov added to list of areas of concern by London risk assessors

A Russian warship during Black Sea naval exercises outside the Crimean port of Sevastopol. AFP

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Insurers have been told to treat the shipping lanes around Ukraine and Russia as high risk because of the precarious military position in Eastern Europe.

The guidance from a panel of London risk assessors emerged as Russia holds naval drills in the Black Sea and moves troops on land near Ukraine.

The list of high-risk sea lanes drawn up by the industry’s so-called Joint War Committee is closely watched and can influence the cost of insuring merchant vessels.

“With the increased naval activity, the possibility for a miscalculation is definitely there,” said Neil Roberts, the secretary of the committee.

“We would be remiss if we did not advise the market now and give it the ability to react.” he told Reuters.

The panel, made up of insurers and members of the Lloyd’s Market Association, normally meets four times a year to review its list of areas deemed high risk for vessels due to war, terrorism and related perils.

But it held an emergency meeting this week due to developments near Ukraine, which is on guard for a potential Russian attack.

The shipping lanes added to the list were in the Black Sea, where more than 30 Russian warships have reportedly held drills, and the Sea of Azov, which lies off annexed Crimea.

The effect of this on individual insurance contracts will be for the shipping companies involved to negotiate, said the panel.

An aviation committee met separately on Tuesday after two Ukrainian airlines revealed problems getting insurance for some of their flights. Other carriers have avoided flying over the country’s airspace.

Russia said in two announcements this week that some troops were pulling back from border areas near Ukraine and from annexed Crimea after finishing military drills.

Western leaders reacted with caution and said it was too early to say Moscow was moving to de-escalate.