Japan’s insurance companies to stop ship insurance in Russian waters

A number of Japanese insurers on January 1, 2023, will stop insuring ships for war damage in all Russian waters.

That’s according to Asian NikkeiUkrinform reports.

The move may affect Japan’s energy imports, the agency notes.

“Tokio Marine & Nichido Fire Insurance, Sompo Japan Insurance and Mitsui Sumitomo Insurance started to inform ship owners of their decision Friday,” reads the report.

The Japanese insurers’ decision meant that war damage would not be insured in Russian waters.

Read also: Ten Russian warships remain combat ready in Black Sea

A lack of additional coverage for Russian waters would make sailing there too risky for most operators. This means Japanese imports of liquefied natural gas from Russia’s Sakhalin-2 project and elsewhere could be affected.

Shipowners have to sign up for extra war damage insurance before sailing through Ukrainian and Russian waters. Insurers would have to be notified in advance to follow up on terms for payouts and premiums. Starting next year, ship owners will no longer have that option from the three Japanese insurers.

Prior to this, shipowners were obliged to conclude with insurers additional agreements to cover war damage risks for sailing in Russian or Ukrainian territorial waters.

“The insurers’ decision reflects the industry’s widened view of risks from the Ukraine war. The perceived danger has spread beyond the Black Sea and the Sea of ​​Azov, both close to the actual fighting. In February, when the war broke out, London’s Joint War Committee, which issues guidance for marine insurers, added waters around Ukraine to its list of high-risk areas. (…) In April, the committee expanded the high-risk designation to include all of Russia,” reads the report.

As reported earlier, after the full-scale invasion of Ukraine, Russia blocked all of Ukraine’s Black Sea ports. Navigation was partially resumed due to the Grain Initiative on the delivery of Ukrainian cereals to the most vulnerable parts of the world.

Photo: Getty Images

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