Ship reinsurers have faced huge losses, leading the insurers of ships to cancel covering war risks in Russia, Belarus and Ukraine from January 1, 2023.
Currently, and due to the war in Ukraine, many P&I Underwriters are in no position to provide coverage for risks associated with war in the region from 1st January.
This was stated by a number of clubs, with the UK P&I mentioning that this problem had come to the forefront due to the lack of reinsurance for the reinsurers, which is called retrocession.
The withdrawal of reinsurance is applicable to a few but not all kinds of policies provided by the P&I Underwriters.
However, this move will make it difficult for charter companies to ensure their ships, leading to an increase in prices and might mean that some ships will ply without insurance.
For this reason, Japanese insurers are expected to keep marine war insurance, covering the sinking and requisition of ships due to war in Russian waters for at least three months for LNG vessels.
This aims to ensure Japan will be able to import the fuel from the Sakhalin-2 gas and oil project in Russia’s Far East at the height of peak winter demand.