Three Japanese insurance companies will stop insuring ships for damage in all Russian waters due to the war in Ukraine, potentially affecting Japan’s energy imports such as liquefied natural gas (LNG), the Nikkei newspaper said, Report informs via the Japan Times.
Tokio Marine & Nichido Fire Insurance, Sompo Japan Insurance and Mitsui Sumitomo Insurance started notifying shipowners about their decision on Friday, the business daily reported.
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 halt, applying even to waters in Russia’s Far East, far from the fighting, could make shipping there too risky for some companies, it said.
Japan’s LNG imports from Russia’s Sakhalin-2 gas and oil 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 as it accounts for 9% of the country’s LNG imports.
The three Japanese insurers will likely start negotiating with reinsurance companies after the Christmas holidays on possibly restarting coverage, the Nikkei said.
Almost all vessels obtain ship insurance, and without additional coverage for Russian waters the area would be too risky for navigation, the paper said.