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Japanese authorities have asked insurance companies to continue providing marine war insurance coverage to ships carrying liquefied natural gas (LNG) through Russian waters, Reuters reported citing a senior official.
The request was made in a joint letter to the nation’s general insurance group by the Financial Services Agency (FSA) and the Agency for Natural Resources and Energy (ANRE), the report said.
According to the official, the Japanese government wants to ensure that the country keep getting LNG from the Sakhalin-2 project in Russia.
“The FSA and ANRE have asked insurers to take actions to continue offering marine war insurance for the shipowners to transport LNG from Sakhalin-2 as it is key for Japanese energy security,” the official was quoted by the news agency as saying.
Last week, Tokio Marine & Nichido Fire Insurance, Sompo Japan Insurance, and Mitsui Sumitomo Insurance reportedly said they would stop providing marine war cover from 1 January 2023.
The insurance covers damages to ships from armed conflict in Russian waters.
The insurers’ announcement came after reinsurers said they would withdraw cover for ships’ risks related to war.
Notably, 9% of Japan’s LNG imports come from the Sakhalin Island complex in Russia’s Far East, which is partially owned by Gazprom and Japanese trade companies.
“Securing LNG is the top priority for the government, and we asked insurance companies to cooperate in this regard,” an official at FSA told the news agency.
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 to continue offering marine war insurance in 2023.
According to industry sources, insurers may opt out of providing coverage for flights to Ukraine or for ships traversing the Black Sea if reinsurers consider removing the region from policies starting in January 2023.