LONDON (Reuters) – Ship insurers said they were canceling war risk coverage across Russia, Ukraine and Belarus after reinsurers exited the region facing huge losses.
Reinsurers, who insure insurance companies, usually renew their 12-month contracts with insurance customers on January 1, giving them their first opportunity to reduce exposure since the war in Ukraine began, after suffering this year from conflict-related losses and from Hurricane Ian in fl.
The US, Northern, UK and Western P&I (Protection and Indemnity) clubs can no longer offer war risk coverage for liabilities in the region as of January 1, they said in recent notices on their websites. Clubs is among the largest P&I insurers covering about 90% of the world’s ocean vessels.
The UK’s Protection and Indemnity Club said on Dec. 23 that the problem arose because reinsurers, also known as reinsurers, were unavailable for reinsurance.
She added, “The club’s reinsurance companies are no longer able to insure reinsurance from war risk exposure to Russian, Ukrainian or Belarusian regional risks.”
US P&I said on December 23 that it had received a “cancellation notice” for the region from war risk reinsurers and was canceling its insurance as a result.
Vessels usually have P&I insurance, which covers third party liability claims including environmental damage and injury. Separate hull and machinery documentation covers vessels against physical damage.
Industry sources say the insurers’ moves will make it more difficult for shipowners or charters to find insurance, increase rates, and could mean some ships sail without insurance.
Reinsurance and reinsurance providers, global players, include Hannover Re (HNRGn.DE)Munich Re (MUVGn.DE) and Swiss Re (SRENH.S), as well as syndicates at Lloyd’s Market of London (SOLYD.UL). Munich Re and Swiss Re declined to comment. The other companies did not immediately respond.
Reuters reported earlier this month that a proposed contract clause being circulated by reinsurers excludes war-related claims for both aircraft and vessels in Ukraine, Russia and Belarus.
A senior Japanese Ministry of Industry official said this week that the Japanese government has urged insurance companies to take on additional risks to continue providing marine war insurance to LNG shippers in Russian waters.
(Reporting by Caroline Cohn and Jonathan Saul); Editing by Muralikumar Anantharaman
Our standards: Thomson Reuters Trust Principles.
“Alcohol geek. Certified web scholar. Travel aficionado. Subtly charming twitter fanatic.”