Speaking to The Insurer TV, McGill praised the agility and responsiveness of Lloyd’s in facilitating the launch of the $50mn all-risks marine cargo and war facility, which will cover grain and food products transported through Ukrainian ports.
“This is exactly what the Lloyd’s market is all about: complex risk transfer through syndicated capacity,” McGill said.
“I don’t think many other marketplaces would be able to get this capacity together and support clients during their time of need,” he added.
McGill was speaking to The Insurer TV shortly after the facility – which has been designed to help unlock supply chains and alleviate growing pressures on global food security – was launched last week.
He explained that planning for the Marsh-placed facility got under way in May, with wording pre-agreed for when it would be possible for food products to be exported from Ukraine.
However, McGill said the timing of the UN-brokered Black Sea treaty between Russia and Ukraine, providing vessels safe passage through a maritime corridor to Odessa, Chornomorsk and Pivdennyi ports, caught those involved by surprise.
“We didn’t anticipate that the signing of the treaty would happen on 22 July,” McGill said.
However, despite this McGill said the announcement of the treaty spurred the market into action with Marsh “ramping up” the marketing of the facility.
“We agreed that we should try and make the insurance market have a product ready to go within seven days of the announcement of this treaty.
“That is a real credit to Marsh for placing the business but also the Lloyd’s syndicates stepping up and being willing to write this facility,” he added.
McGill added that once the Black Sea treaty was signed, Ascot was approached by other syndicates that wanted to provide assistance with the initiative.
“It just shows what the market can achieve when we all work together for the good of … in this case hopefully the world,” he said.
“I think Lloyd’s is probably one of the only markets that could bring this kind of solution together – and in pretty quick time,” McGill added.
McGill said the facility acted as an example of the role the (re)insurance industry can play in tackling complex issues on a global scale.
“We have to look at supporting clients through good times and bad times. I don’t think clients in these regions [Ukraine and Russia] actually expected that they would need a facility that was so mission-driven to help provide this grain to the world,” he said.
McGill underlined the humanitarian value of the initiative and praised the role of the insurance industry in enabling security in the transportation of vital goods out of Ukraine.
“The market should be supporting these kinds of initiatives,” he said.
“We’re very proud of bringing [the grain facility] to the market and proud of how the markets responded.”
Earlier this week the Sierra Leone-flagged Razoni became the first vessel to leave the port of Odessa in months, carrying 26,000 tonnes of Ukrainian corn.
During this interview, McGill discusses:
- Further details about the $50mn facility for ships transporting food and grain from Ukrainian ports
- The humanitarian value of the initiative
- The role the Lloyd’s market can play in developing innovative solutions
- The impact of the Russia-Ukraine conflict on the marine cargo insurance market