Japanese insurers negotiate with reinsurers to continue insurance in Russian waters
© Reuters. FILE PHOTO: The logo of Tokio Marine & Nichido Fire Insurance Co is seen in Tokyo, Japan, May 19, 2016. REUTERS / Toru Hanai
TOKYO (Reuters) – Three Japanese insurers that plan to stop marine insurance for war-related risks in Ukraine starting next month are in talks with reinsurers to resume insurance coverage. that activity, they said Monday.
Spokespersons for the companies said that Tokio Marine & Nichido Fire Insurance, Sompo Japan Insurance and Mitsui Sumitomo Insurance on Friday informed ship owners that they would stop providing marine war, damage and for ships due to war in Russian waters, as of January 1. Their comments confirmed local media reports on Saturday.
This change could affect Japan’s imports of liquefied natural gas (LNG) along with other types of energy and commodities.
The insurers’ decision was prompted by global reinsurers saying they would no longer take risks on war-related ships, which Moscow began in February. The Russian government called it a “special operation”.
A Tokio Marine spokesperson said: “We are in talks with various reinsurers to obtain war coverage in order to restart marine war insurance offering in the region. Our customer”.
Their spokesman said Sompo Japan and Mitsui Sumitomo Insurance are also looking for new reinsurers.
Most ships have two types of insurance: marine insurance that covers damage from natural disasters and collisions, and marine war insurance that covers damage caused by war or terrorism.
Without marine war insurance, ship owners could forgo operations in Russian waters, including obtaining LNG from the Sakhalin-2 oil and gas project in Russia’s Far East.
Japanese shipping company Mitsui OSK Lines said it was collecting information. A spokesman said that when asked about shipping plans from Sakhalin-2, Nippon Yusen will cooperate with the government and business partners.
The Sakhalin island complex, partly owned by Gazprom (MCX:) and Japanese trading companies, accounts for 9% of Japan’s LNG imports.