(Reuters) – State-controlled Russian National Reinsurance Co. is now the main reinsurer of Russian ships, including Sovcomflot’s fleet, after Western insurance companies withdrew protection for Russian shipowners, three people familiar with the matter told Reuters.
Insurance is crucial for maritime transport, especially oil cargoes that require the highest safety standards due to the risk of spillage and transport of flammable materials on the high seas.
Before Western sanctions were imposed on Russia over its invasion of Ukraine, which Moscow calls a “special military operation,” such cargoes insured reinsurance from an international pool of companies offering broad coverage.
Western insurance companies withdrew protection from the state-owned Sovcomflot when Russia̵7;s largest shipping group was hit by sanctions, but Western insurance sources said Russian compensation protection would probably be enough to keep Russian ships afloat.
Russian Vice President of the Russian Security Council Dmitry Medvedev said this week that state guarantees would be offered as insurance for moving Russian goods, without giving details.
The sources, who declined to be identified due to the sensitivity of the issue, said that the Russian central bank-controlled RNRC is now the main company providing state guarantees to Russian insurance companies that offered protection such as Ingosstrakh, which insures Russian tankers, including SCF’s fleet.
RNRC, Ingosstrakh and Sovcomflot did not respond to Reuters’ request for comment.
Ships are commercially obligated to have a protection and compensation insurance (P&I) that covers claims for damages from third parties, including environmental damage and damage. Separate hull and engine policies cover vessels against physical damage.