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Reinsurers, who insure the insurers, typically renew their
12-month contracts with insurance clients on Jan. 1, giving them
the first opportunity to scale back exposure since the war in
Ukraine started, after being hit this year by losses related to
the conflict and from Hurricane Ian in Florida.
P&I (protection and indemnity) clubs American, North, UK and
West are no longer able to offer war risk cover for liabilities
in the region from Jan. 1, they said in recent notices on their
websites. The clubs are among the biggest P&I insurers who cover
around 90% of the world’s ocean going ships.
UK P&I Club said on Dec. 23 that the issue had arisen because of
a lack of availability of reinsurance for reinsurers, also known
as retrocession.
"The Club's reinsurers are no longer able to secure reinsurance
for war risk exposure to Russian, Ukrainian or Belarus
territorial risks," it said.
American P&I said on Dec. 23 that it had received a "notice of
cancellation" for the region from its war risk reinsurers and
was cancelling its own insurance as a result.
Ships typically have P&I insurance, which covers third party
liability claims including environmental damage and injury.
Separate hull and machinery policies cover vessels against
physical damage.
The moves by the insurers will make it harder for ship-owners or
charterers to find insurance, increase prices and may mean some
ships sail uninsured, industry sources say.
Providers of reinsurance and retrocession include global players
Hannover Re, Munich Re and Swiss Re, as well as syndicates in
the Lloyd's of London market. Munich Re and Swiss Re declined to
comment. The other firms did not immediately respond.
Reuters reported earlier this month that a proposed contract
clause being circulated by reinsurers excluded war-related
claims for both planes and ships in Ukraine, Russia and Belarus.
The Japanese government has urged insurers to take on additional
risks to continue providing marine war insurance for liquefied
natural gas (LNG) shippers in Russian waters, a senior official
at the industry ministry said this week.
(Reporting by Carolyn Cohn and Jonathan Saul; Editing by
Muralikumar Anantharaman)
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