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From January 2023, ship insurers will no longer provide war-risk coverage in Russia, Ukraine, and Belarus, reported Reuters.
The development comes after reinsurance companies withdrew cover for the region due to mounting losses.
At least 12 of the 13 Protection and Indemnity (P&I) clubs have stated that they will no longer be able to offer their customers coverage, according to the Guardian.
These leading P&I clubs, which insure around 90% of the ocean-going ships worldwide, include P&I clubs American, North, UK, and West.
Due to the cancellations, ship owners and charterers may find it more difficult to obtain insurance in the coming year, which might drive up costs and lead to some shipping companies preferring to either steer clear of the area or operate without insurance.
Given that most contracts run on a 12-month basis and renew on 1 January, this is the first chance reinsurers have had to end coverage for clients since Russia’s invasion of Ukraine in late February this year.
“Due to the impact of losses from the Russian/Ukrainian situation affecting the availability of global insurance and reinsurance capacity, the Club’s reinsurers are no longer able to secure reinsurance for war risk exposure to Russian, Ukrainian or Belarus territorial risks,” UK P&I said in a statement.
Separately, American P&I said it has received a “Notice of Cancellation from reinsurers in respect of certain war risk exposures”.
Earlier this week, Japanese officials urged insurance providers to keep covering ships carrying liquefied natural gas (LNG) through Russian waters for marine war insurance.