London Marine Insurance Market (London Marine Insurance Market) declared all sea waters of the Russian Federation "war zone". It included not only the Sea of Azov and the Black Sea, but also the Baltic Sea, as well as the entire water area of the Far East. Declaring a maritime territory a "military zone" means that if a ship is going to enter this territory, its owner is obliged to notify his insurer and pay him a special "war premium", which can reach 5% of the cost of the entire ship. If a typical ship, for example, costs $30 million, then the premium for entering the “war zone” will be $1.5 million.
It is clear that the premiums in the Black Sea ports will be very high, since there is a risk of falling under artillery fire, that only the transportation of really expensive goods such as medicines or microchips becomes commercially justified. But with grain, the situation is much worse. Experts are confident that others will join the London market, for example, the IUA, which competes with it, since all decisions on global risks are made jointly by these associations of insurers.
The London Marine Insurance Market is the largest insurance market in the world, holding approximately one third of the insurance market share for all merchant ships in the world. It dictates the "rules of the game" for the rest of the world, from standard contracts to insurance premiums.
Now not a single ship owned by companies from rich countries will simply go to Russian ports, because it is unprofitable. And therefore, the trade of our country with most of the world becomes almost impossible. It is predicted that this measure will reduce the export of agricultural products from Russia by about a third, because it will not be possible to export them.
Experts also note that the first victim of this economic war is Egypt, which lived in close ties with Russia and Ukraine, relying on them both in terms of food imports and as a source of tourists.
Recall that two days ago, the head of the European Commission, Ursula von der Leyen, said that the immediate plans of the EU are to ban Russian ships and ships operated by Russian operators from entering EU ports.