On January 1, 2023, a number of Japanese insurers will stop insuring ships against war damage in all Russian waters.
It depends Nikkei Asiareports Ukrinform.
The move could affect Japan’s energy imports, the agency notes.
“Tokio Marine & Nichido Fire Insurance, Sompo Japan Insurance and Mitsui Sumitomo Insurance began notifying shipowners of their decision on Friday,” the report read.
The decision by Japanese insurers means that war damage will not be insured in Russian waters.
A lack of additional coverage for Russian waters would make navigation too risky for most operators. This means that Japanese imports of liquefied natural gas from Russia’s Sakhalin-2 project and elsewhere could be affected.
Shipowners must take out additional war damage insurance before sailing in Ukrainian and Russian waters. Insurers should be informed in advance of monitoring payment terms and premiums. From next year, shipowners will no longer have this option with the three Japanese insurers.
Previously, shipowners were obliged to conclude additional agreements with insurers to cover the risks of war damage in the event of navigation in Russian or Ukrainian territorial waters.
“The insurers’ decision reflects the industry’s broader view of war-related risks in Ukraine. The perceived danger has spread beyond the Black Sea and the Sea of Azov, both close to the actual fighting. In February, when war broke out, London’s Joint War Committee, which publishes guidelines for marine insurers, added the waters around Ukraine to its list of high-risk areas. (…) In April, the committee expanded the high-risk designation to include all of Russia,” the report read.
As previously reported, after the full-scale invasion of Ukraine, Russia blocked all Ukrainian Black Sea ports. Navigation has been partially resumed due to the Grain Initiative on Ukrainian grain deliveries to the most vulnerable regions of the world.
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