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Japanese Insurance Firms Negotiation With Reinsurers To Restart Coverage In Russian Seas

Japanese Insurance Firms Negotiation With Reinsurers To Restart Coverage In Russian Seas
Three insurance companies of Japan that will stop providing marine coverage for risks associated with the conflict in Ukraine beginning next month have stated that they are in talks with reinsurers to resume those operations.
With effect from January 1, Tokio Marine & Nichido Fire Insurance, Sompo Japan Insurance, and Mitsui Sumitomo Insurance informed shipowners that they would no longer be providing marine war insurance, which covers damage to ships resulting from armed conflict in Russian waters. Their remarks corroborated Saturday's local media reports.
The modification may have an impact on Japan's imports of commodities and liquefied natural gas (LNG), among other things.
Global reinsurance firms' declarations that they would no longer assume ship-related risks from the conflict, which Moscow started in February, prompted the insurers' decision. It is described as a "special operation" by the Russian government.
"We are negotiating with various reinsurers to get the war coverage in order to restart providing marine war insurance in the area to our customers," a spokespeople at Tokio Marine said, adding that some reinsurers have responded "positively."
According to their spokespeople, Sompo Japan and Mitsui Sumitomo Insurance are also looking for new reinsurers.
Most vessels are covered by two different types of insurance: marine insurance for damage from collisions and natural disasters and marine war insurance for harm from war or terrorism.
Shipowners who don't have marine war insurance might stop operating in Russian waters, including transporting LNG from the Sakhalin-2 gas and oil project in Russia's Far East.
Mitsui OSK Lines, a Japanese shipping company, stated that it is gathering information. When asked about its shipping plan from Sakhalin-2, Nippon Yusen (9101.T) a spokesperson said the company will cooperate with the government and its business partners.
9% of Japan's LNG imports come from the Sakhalin Island complex, which is owned by Gazprom and Japanese trading companies.

Christopher J. Mitchell

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