Japanese insurers, which decided to stop issuing war policies for the transport of ships and tankers from next month due to risks arising from the Russian invasion of Ukraine, are in talks with reinsurers to resume such policy.

Tokio Marine, Sompo Japan and Mitsui Sumitomo, one of Japan’s leading ship insurance companies, informed owners last week that war damage suffered by ships in Russian waters will be excluded from the policy.

This decision by the companies may hinder imports of natural gas (LNG) and raw materials from the island country of Japan, which has its own scarce energy and natural resources.

VESSELS CARRY OUT TWO DIFFERENT POLICIES

Most carriers purchase two different insurance policies. The first of them covers damage caused by natural disasters and accidents, and the second type of insurance covers damage caused by war or terrorist acts.

If war insurance cannot be taken out, shipowners can stop shipping natural gas or crude oil from eastern Russia, one of Japan’s main sources of energy imports.

In the Tokio Marine statement, it was stated that “we are negotiating with several reinsurance companies to re-offer the war damage policy to our clients” and it was stated that some reinsurance companies responded “positively”. (Reuters)