As a result of financial losses, ship insurers are cancelling war-risk coverage across Russia, Ukraine and Belarus.
Twelve of the 13 Protection and Indemnity (P&I) clubs said they will no longer be providing coverage to clients, leaving cargo and freight companies liable for major losses linked to the Russia/Ukraine conflict.
Most ships buy P&I cover from these clubs – the cancellations mean it could be harder for ship owners or charterers to secure insurance moving forward, resulting in higher prices and some shipping companies either avoiding the region or sailing without coverage.
The UK P&I club recently told its members: “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.”
According to recent industry estimates, overall, the Russia/Ukraine war is expected to cost the global insurance industry from £10bn to £12bn.