2024-12-16 12:33

Russia uses 'shadow fleet' to bypass sanctions Split vessel was covered by Russian insurer VSK Scale of fuel leak so far unknown MOSCOW, Dec 16 (Reuters) - Russian authorities sought to limit the damage on Monday from oil spilled into the Kerch Strait by two ageing tankers that were damaged during a heavy weekend storm, highlighting the environmental and insurance risks of Russia's 'shadow fleet'. One crew member was killed after the Volgoneft 212 split in half, with 12 rescued, while authorities said all 14 crew aboard the Volgoneft 239, which ran aground 80 metres from the shore near the port of Taman, were also rescued. The more than 50-year-old ships were carrying some 9,200 metric tons (62,000 barrels) of oil products in total, Russian news agency TASS said, but how much leaked is being determined. Volgoneft 212 dates back to 1969 and Volgoneft 239 was built in 1973, certificates seen by Reuters showed. The spill could become one of the largest environmental disasters to affect the region in recent years, although the scale of possible insurance claims was not immediately clear. The shipping industry has raised concern in recent months over the risks and potential for collisions posed by hundreds of "shadow" tankers in open sea lanes, with little incentive for these vessels to follow cleaner shipping standards. Russia has increasingly used a shadow fleet, which deploys various techniques to bypass international sanctions. The Kerch Strait, which separates mainland Russia from the Moscow-annexed Crimea region, is a key route for exports of its grain and fuel products. The Finland-registered Centre for Research on Energy and Clean Air (CREA) think-tank said 369 vessels exported Russian crude oil and oil products last month, of which 206 were shadow tankers, and 28% of these were at least 20 years old. Before the weekend incidents, CREA said the cost of clean up and compensation resulting from an oil spill from tankers with unknown insurance or no insurance provision could amount to more than $1 billion for the coastal country's taxpayers. Russia rejects Western pressure to limit its oil exports and in the past year the number of tankers transporting cargoes that are not regulated or insured by Western providers has grown. The documents showed the Volgoneft 212 was covered by insurance from Russia's VSK, while the vessel's operator, Kama-Shipping, said it was carrying 4,200 tons of fuel oil. Russia's OOO Absolyut Strakhovaniye covered the insurance for the Volgoneft 239, documents seen by Reuters showed. Neither immediately replied to requests for comment. President Vladimir Putin on Sunday ordered the government to set up a working group to deal with the rescue operation and mitigate the impact of the spill, Russian news agencies cited Kremlin spokesman Dmitry Peskov as saying. Sign up here. https://www.reuters.com/world/europe/russian-tankers-damaged-kerch-strait-were-carrying-62000-barrels-oil-products-2024-12-16/

2024-12-16 12:29

Dec 16 (Reuters) - Barrick Gold (ABX.TO) , opens new tab will suspend operations in Mali if gold shipments continue to be blocked, the company said on Monday as it struggles to reach agreement with authorities on a new mining code in the West African country. Conditions at the gold miner's Loulo-Gounkoto complex have "deteriorated significantly", Barrick said, adding that employees have been imprisoned without cause and shipments of bullion have been blocked. "If shipments remain suspended, Barrick will be compelled to suspend operations, further impacting the viability of this critical economic driver for Mali," the company said. Sign up here. https://www.reuters.com/markets/commodities/barrick-gold-threatens-suspend-mali-operations-over-blocked-exports-2024-12-16/

2024-12-16 12:28

Rising losses from natural disasters see some insurers cut cover in catastrophe-hit states Homeowner premiums have soared, 50% rise not uncommon, broker says Lloyd's of London insurance market has stepped in, has biggest market share LONDON, Dec 16 (Reuters) - International and domestic insurers are pushing into the U.S. market for hard-to-protect homes, charging high premiums and enjoying strong profits after some U.S. firms pulled out. Rising losses from storms, hurricanes and wildfires in recent years have caused some insurers, such as Allstate and State Farm, to cut back cover in catastrophe-hit states like Florida and California. This has left greater room for non-domestic players like Hiscox (HSX.L) , opens new tab and Munich Re (MUVGn.DE) , opens new tab to enter the fray, industry sources say. Allstate did not respond to a request for comment, while State Farm declined to comment. According to a report this month from Swiss Re, 2024 will be the fifth consecutive year that global insured losses from natural catastrophes , opens new tab exceed $100 billion. Recent large U.S. hurricanes Helene and Milton have added to concern about property losses. However, the increasing regularity of extreme weather events has stoked the market for more expensive excess and surplus lines, or E&S. Homeowners' premiums have risen by as much as 100% in the past couple of years in areas such as Los Angeles and the southeast of Florida, said Brian Bazan, a vice president at broker Hub International. It was not unusual for premiums to rise 50% when policyholders transferred from the admitted market, though increased competition was starting to bring those rate increases down, he added. Most properties in the United States are covered via so-called admitted line insurance, where premium rates have to satisfy the state insurance regulator. But policyholders, typically when they have been refused by three admitted line insurers, often buy E&S policies to gain the cover they need. This market has attracted players in the specialist Lloyd's of London (SOLYD.UL) insurance market, which focuses on complex risks. "Where the market (terms and conditions) hardens, it has to go outside of the States and Lloyd's is often the beneficiary," said Robert Greensted, a director at S&P Global. "The potential for profitability is obviously there, but there is additional risk." Lloyd's had the biggest share of the overall E&S market in 2023. Recent growth in the E&S market has been driven by property insurance premiums from catastrophe-prone states, according to a report by ratings agency Fitch. Tom King, flood line underwriter at Lloyd's insurer Hiscox, said the firm's E&S flood product could provide higher levels of rebuilding payments than conventional cover. Munich Re was interested in growing its long-standing E&S business, said Tom Wallace, chief underwriting officer for the binding authorities business at Munich Re Specialty-North America. "The industry is seeing the first real dislocation on the admitted front, particularly in California," he said. States which have seen the biggest growth in E&S property business since 2018 are those facing the most risk - California, Florida and Louisiana, according to the U.S. Insurance Information Institute. U.S. E&S homeowner premiums are likely to exceed $3 billion in 2024, up from $1.2 billion in 2018, according to reinsurance broker Guy Carpenter. A rise in premium volume reflects both increased demand and higher premium rates. The overall combined ratio - a key measure of underwriting profitability in which a level below 100% indicates a profit - was 66% for property E&S business last year, sharply higher than 93% in 2022, the Fitch report said. U.S. insurers are also present in this market - sometimes the same ones that pulled out of admitted lines. "The Lloyd's markets have always been here, but the U.S. high net worth markets are now building out their own E&S operations," said Hub International's Bazan. "They are seeing more demand as they pull out of admitted and backfill it with E&S. They can do what Lloyd's has always done, which is crafting unique solutions." Nationwide and AIG are among major U.S. insurers to offer E&S as well as admitted property cover. Nationwide did not respond to a request for comment, while AIG declined to comment. Sign up here. https://www.reuters.com/markets/us/international-domestic-insurers-push-into-catastrophe-hit-us-property-markets-2024-12-16/

2024-12-16 12:23

BRUSSELS, Dec 16 (Reuters) - The European Union has adopted a 15th package of sanctions against Russia over its invasion of Ukraine, including tougher measures against Chinese entities and more vessels from Moscow's so-called shadow fleet, the EU Commission said in a statement on Monday. The new sanctions package adds 52 vessels from the shadow fleet that try to circumvent Western restrictions to move oil, arms and grains. It brings the total listed to 79. The EU began adding ships earlier this year in response to an increase in the number of vessels transporting cargoes that are not regulated or insured by conventional Western providers. The listing included vessels that delivered North Korean ammunition to Russia. The new restrictions add 84 new individuals and entities, including seven Chinese persons and entities. "Namely one individual and two entities facilitating the circumvention of EU sanctions, and four entities supplying sensitive drone components and microelectronic components to the Russian military," the statement said, referring to the Chinese listings. The Chinese additions will be the first fully-fledged sanctions on the country that include a travel ban and asset freeze. "The step to fully-fledged sanctions sends an important signal to the Chinese. We take this very seriously," an EU diplomat said. EU sanctions chief David O'Sullivan and Ukrainian officials have pointed to China as the main route for sales of foreign technology to Russia. Diplomats said the previous Chinese listings in Russian sanctions packages only involved export controls, rather than a overarching sanction. In addition, the list includes senior managers in Russia's energy sector, two senior North Korean officials as well as 20 Russian companies and entities in India, Iran, Serbia and the United Arab Emirates. EU countries added some financial measures to ease the burden on EU central securities depositories, such as Belgium's Euroclear, when they handle Russia's immobilised central bank assets. Earlier this year, the Group of Seven (G7) nations agreed to use the over $300 billion in frozen funds to back a $50 billion loan for Ukraine to help it fight Russian forces. The Commission is preparing a 16th package of sanctions for January, which may include wider measures such as on Russian liquefied natural gas and export limits on EU companies' subsidiaries in third countries, sources told Reuters. Sign up here. https://www.reuters.com/world/europe/eu-adopts-new-russia-sanctions-targeting-china-shadow-fleet-2024-12-16/

2024-12-16 11:33

Dec 16 (Reuters) - Sterling rose against the dollar and euro on Monday as a survey of business activity pointed to a rise in prices in Britain and as investors braced for a string of central bank meetings this week, including the Bank of England on Thursday. British businesses this month cut staff numbers at the fastest pace in almost four years, raised prices and turned more pessimistic about the outlook, a survey showed on Monday. The preliminary S&P Global Flash Composite Purchasing Managers' Index held at 50.5 in December, remaining just above the 50.0 line that separates growth from contraction, but below expectations in a Reuters poll of economists for a rise to 50.7. The pound rose as much 0.52% against the greenback on Monday , and recuperated some of last week's losses, when the currency tumbled and hit its lowest point since Nov. 27 on Friday at $1.2607 after data showed that the British economy shrank unexpectedly in October. At 1100 GMT the currency had pared some of those gains, up 0.31% against the dollar at $1.2647. The pound also strengthened against the euro , with the single currency down 0.28% to 82.96 pence. Kirstine Kundby-Nielsen, FX research analyst at Danske Bank, said markets focused on the "sticky price components" in the PMI data. "Price indices [are] higher across the board indicating some continuous stickiness in price setting, a key concern for the BoE," Kundby-Nielsen said. Prices charged by firms rose at the steepest pace in nine months as input costs, including salaries, went up. The PMI survey pointed to a stalling of the economy in final quarter of 2024 and possibly worse to come in early 2025, said S&P Global Market Intelligence's chief business economist Christ Williamson. "Policymakers at the Bank of England may be cautious about cutting interest rates, however, given the resurgence of inflation being signalled, adding further to downturn risks in 2025," he said. Money markets largely expect the BoE to hold rates steady on Thursday. The central bank decision will come a day after the U.S. Federal Reserve, which is expected to cut rates by 25 basis points on Wednesday and signal a measured pace of easing for 2025. Sterling is set for a monthly decline against the euro, which has risen 0.8% in December, but it is still on course for a near 4% gain this year against the single European currency. In part, that is due to the expected difference in interest rates in Britain and the euro zone, as the BoE is likely to move more slowly on cuts than the European Central Bank. Sign up here. https://www.reuters.com/markets/currencies/sterling-ticks-up-pmis-show-uk-price-pressures-2024-12-16/

2024-12-16 11:23

Italy mandates disaster insurance for companies from April Only 5% of Italian firms insured against disasters in 2023 Rome spends 4-5 bln euros/year on disaster compensation Critics say new law lacks effective sanctions ROME, Dec 16 (Reuters) - Italian companies are preparing to comply with a requirement to take out natural disaster insurance from next April, although some fear it will be hard to enforce and too costly. Many small and medium-sized firms, which form the backbone of Italian business, have until now bet on government support to weather increasingly frequent climate-related disasters. Italy's northern region of Emilia-Romagna has recently been particularly hard hit by floods, with four since May 2023. The first and most devastating caused 8.5 billion euros ($8.93 billion) of damage. With the euro zone's second-highest public debt, Italy can ill afford to foot the bill and is set to end this reliance on the state, potentially resulting in considerable savings. The law obliges firms to insure assets such as equipment, buildings and land in Italy, where environmental research and protection institute ISPRA says some 94% of towns are at risk from landslides, floods or coastal erosion. Italy spends around 4-5 billion euros a year on compensation for natural disasters, figures from insurance watchdog IVASS show, around 0.25% of gross domestic product. And while the Italian market is growing, with insured assets impacted by natural disasters totalling a record of around 6 billion euros ($6.30 billion) in 2023, data from industry association ANIA shows, only 5% of Italian firms had cover. "Using the money saved for prevention plans and better infrastructures is the central point," said Andrea Bellucci, who teaches valuation of insurance companies at Perugia University. Although the law has been cautiously welcomed by most firms, some are concerned that policies will be onerous and complex. "We want it to be tailored to companies' needs to reflect the extent of the risks, and not one-size fits all to boost the revenue of insurers," said Stefano Valvason, general director of API, an association of small and medium-sized businesses. Mauro Di Nunzio, who runs a company that produces dried fruits in Italy's southern region of Puglia, welcomed the new rules, saying paying for insurance was preferable to relying on "slow, inadequate and inefficient" state compensation. Bruno Panieri, director of economic policy at small business lobby Confartigianato, said clarity was key and called for the creation of a single, price-comparison website. Analysts say another challenge will be enforcing the new regulation, which has been criticised by some as lacking an effective system of sanctions. And if take-up remains low, it will undermine risk-sharing and drive up premiums. START OVER The law may offer larger insurers an advantage as they can spread risk among more clients and regions, Stefano Frazzoni, senior partner at business consultancy Prometeia, said. Five insurance groups currently provide about 70% of natural disaster coverage in Italy, where the ratio between insured losses and total economic losses is 69%, compared with 20% in France and 27% in Germany, data from Swiss Re (SRENH.S) , opens new tab shows. The state will act as re-insurer, enabling insurance companies to tap into guarantees from the publicly-owned insurance and advisory group SACE, to offload some risks. Nicolo Bertone, whose carpentry business in the north-western Liguria region was uninsured when it suffered 80,000 euros of damage in a flood in October, supports the new rules. "Being covered helps to keep your spirits up when you have to start over," he told Reuters. ($1 = 0.9520 euros) Sign up here. https://www.reuters.com/markets/europe/disaster-insurance-set-test-italys-business-backbone-2025-2024-12-16/