Page 17 - Insurance Times January 2023

Japan Insurers to Maintain After renegotiating with UK reinsurers, Hurricane Ian and other natural catas-
a total of 30 billion yen ($224 million) trophes caused an estimated $115 bil-
Cover for LNG Vessels in
is expected to be secured, with domes- lion of insured losses so far this year,
Russian Waters tic insurers covering about 8 billion yen well above the 10-year average of $81
and overseas reinsurers taking on billion, reinsurer Swiss Re estimated
Japanese insurers are expected to
about 22 billion yen, it said. earlier this month.
maintain marine war insurance, which
covers the sinking and requisition of But added the underwriting capacity Reinsurance rates are expected to rise
ships due to war in Russian waters for will be less than half of the previous 67 sharply at the key Jan. 1 renewal date
at least three months for liquefied billion yen. as a result of losses related to Hurri-
natural gas (LNG) vessels, industry cane Ian and the war in Ukraine, indus-
Therefore, the number of ships that can
sources said. try sources say.
be compensated at any one time is
Japan’s Tokio Marine & Nichido Fire likely to be about half of what it used Ship insurers have excluded Ukraine,
Insurance, Sompo Japan Insurance and to be, which means shipping compa- Russia and Belarus from war liability
Mitsui Sumitomo Insurance told ship- nies may need to review their opera- policies as reinsurers scale back their
owners last Friday that from Jan. 1 tions, the Nikkei said. exposure.
they would stop offering insurance cov-
The industry sources on Friday con- Discussions about rates and war exclu-
erage for ship damage caused by war
firmed the Nikkei report and told sions have made negotiations between
in Russian waters, because reinsurers
Reuters the cover would last until insurers and reinsurers tense this year,
were withdrawing coverage.
March. industry sources say.
A senior official at the industry minis-
This year’s renewal season was “one of
try said the Japanese government had
Global Natural Catastro- the most challenging. ..the sector has
asked insurers to take on additional experienced,” Guy Carpenter said, add-
phe Insurance Losses Esti-
risks to continue providing war insur-
ing that the process had been “ex-
ance for liquefied natural gas (LNG) mated at $112B in 2022 tremely late.”
shippers.
Global insurance losses for natural ca-
The projected losses do not include the
This was to ensure Japan will be able tastrophes are projected to reach $112
impact of the most recent December
to import the fuel from the Sakhalin-2 billion in 2022, reinsurance broker Guy
natural catastrophes, Guy Carpenter
gas and oil project in Russia’s Far East Carpenter said on Friday, driven by the
added.
at the height of peak winter demand. impact of Hurricane Ian which hit
Florida earlier this year.
The insurance companies negotiated Ship Insurers’ Exodus From
with reinsurers to replace part of the Flood and hail in Europe, Australian
Russia-Ukraine Risks Gath-
coverage and they are expected to floods and severe storms in the United
enable continued insurance, Nikkei re- States also contributed to the total, ers Momentum
ported. Guy Carpenter said in a statement. A host of shipping insurers altered their
14 January 2023 The Insurance Times