According to a senior official at the industry ministry, the Japanese government has urged insurers to assume greater risks in order to keep providing maritime war insurance for LNG shippers in Russian waters.
The unusual request was made in a combined letter to the nation’s general insurance group by the Financial Services Agency and the Agency for Natural Resources and Energy. According to the official, Tokyo wants to make sure that Japan will continue to buy LNG from the Sakhalin-2 project in Russia.
In response to the letter, representatives from Tokio Marine, Sompo Japan, and Mitsui Sumitomo told Reuters that they will keep pursuing further backing from reinsurers on the war policy in order to continue offering marine war insurance in 2019.
According to industry sources, insurers may decline to provide coverage for flights to Ukraine or for ships traversing the Black Sea if reinsurers, who insure the reinsurers, suggest omitting the region from policies starting in January.
After been struck this year by losses associated with the fighting and by Hurricane Ian in Florida, reinsurers have the first opportunity to reduce risk since the start of the war in Ukraine on January 1 because that is when their 12-month contracts with insurance clients are normally renewed.