Three Japanese non-life insurers have recently informed their policyholders that they will no longer be providing coverage for ships in Russian waters starting 1 January 2023.
These companies were Tokio Marine & Nichido Fire Insurance, Sompo Japan Insurance and Mitsui Sumitomo Insurance.
This decision was made after reinsurers refused to underwrite the risks of ships associated with the war in Ukraine.
The coverage suspension, however, poses a major threat to liquefied natural gas (LNG) imports from the Sakhalin II project in the Russian Far East. This project is considered crucial for Japan's energy security.
The Japanese Government has therefore called on local insurance companies to maintain war risk coverage for such imports.
Further negotiations between insurers and reinsurers could yield up to 30 billion JPY (228.8 million USD) from British reinsurance companies.