Japan insurers to maintain marine war insurance for ships damaged by Russian waters

TOKYO Reuters - Japanese insurers are expected to maintain marine war insurance that covers the sinking and requisition of ships due to war in Russian waters for at least three months for liquefied natural gas LNG vessels, industry sources said on Friday.

Japan's Tokio Marine Nichido Fire Insurance, Sompo Japan Insurance and Mitsui Sumitomo Insurance said last Friday that they would stop providing insurance coverage for ship damage caused by war in Russian waters because insurers were withdrawing coverage.

A senior official at the industry ministry said on Tuesday that the Japanese government had asked insurers to take additional risks to continue providing war insurance for liquefied natural gas LNG shippers.

This was to make Japan able to import fuel from the Sakhalin 2 gas and oil project in Russia's Far East at the peak winter demand.

The insurance companies negotiated with reinsurers to replace part of the coverage, and they are expected to enable continued insurance, Nikkei reported on Thursday.

It said that there were 30 billion yen and overseas reinsurers taking on about 22 billion yen after renegotiating with UK reinsurers.

But he said that the underwriting capacity will be less than half of the previous 67 billion yen.

The Nikkei said that the number of ships that can be compensated at any one time is likely to be half of what it used to be, which means shipping companies may have to review their operations.

The Nikkei report was confirmed by industry sources and told Reuters that the cover would last until March.