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 certain 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.
Three P&I insurance sources said the withdrawal of cover for Ukraine and Russia applies to some but not all types of policies offered by P&I clubs.
“This is driven by reinsurance,” said Stephen Ripert, North’s global vice director of underwriting, adding that reinsurers were limiting their exposure to the region and “those exceptions need to be passed along the line.”
Industry sources say the exclusions will make it harder for charters to find insurance and 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). All companies declined to comment.
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.
(Covering) By Caroline Cohn and Jonathan Soll in London Editing by Muralikumar Anantharaman and Matthew Lewis
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