Because of the war in Ukraine, three Japanese insurance companies will no longer cover damage to ships in Russian waters. This could affect Japan’s energy imports, such as liquefied natural gas (LNG), said the Nikkei newspaper on Saturday.
The business daily said that insurance companies Tokio Marine & Nichido Fire Insurance Co., Sompo Japan Insurance Inc., and Mitsui Sumitomo Insurance Co. began telling shipowners about their decision on Friday.
On Saturday, calls to the three companies to ask for their thoughts went unanswered.
The newspaper said that the decision was made because reinsurance companies wouldn’t take on risks related to the war that Moscow started 10 months ago.
The stop could make it too risky for some companies to ship into waters in Russia’s Far East, which are far from the fighting.
The Nikkei said that the LNG Japan gets from Russia’s Sakhalin-2 gas and oil project could be affected. Gazprom (MCX:GAZP) and Japanese companies own part of the Sakhalin Island complex. This is important for Japan’s energy security because it supplies 9% of the country’s LNG imports.
The Nikkei said that after the Christmas holidays, the three Japanese insurance companies are likely to start talking with reinsurance companies about the possibility of getting coverage back.
