Japanese companies to stop insuring ships in all Russian waters: report

Three Japanese insurance companies will stop insuring ships for damage in all Russian waters because of the war in Ukraine, which could affect Japan’s energy imports such as liquefied natural gas (LNG), it said on Saturday the Nikkei newspaper.

Tokio Marine & Nichido Fire Insurance Co, Sompo Japan Insurance Inc and Mitsui Sumitomo Insurance Co began notifying shipowners of their decision on Friday, the business daily reported.

Calls to all three companies for comment went unanswered Saturday.

The insurers’ decision was prompted by reinsurance companies refusing to take on risks related to the war that Moscow launched 10 months ago, the newspaper said.

The shutdown, which applies even to waters in Russia’s Far East, away from the fighting, could make shipping there too risky for some companies, he said.

Japan’s LNG imports from Russia’s Sakhalin-2 oil and gas project could be affected, the Nikkei said. The Sakhalin Island complex, partly owned by Gazprom and Japanese companies, is vital to Japan’s energy security, accounting for 9% of the country’s LNG imports.

The three Japanese insurers will likely begin negotiations with reinsurance companies after the Christmas holiday to possibly restart coverage, the Nikkei said.

© Thomson Reuters 2022.

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