Japanese nonlife insurers have suspended undertaking new contracts entirely for domestic firms that operate in Russia, affected by Moscow's countermeasures against economic sanctions following its invasion of Ukraine, sources close to the matter said Saturday.
Insurers such as Tokio Marine & Nichido Fire Insurance Co. will also not renew existing contracts after their terms have expired, the sources said, in a move that could leave Japanese firms uninsured or facing higher premiums by entering into new agreements with local insurers.
The suspension comes after Russia designated Japan as an "unfriendly" country last month in the wake of economic sanctions imposed by Japan and Western nations, obligating all businesses deals with companies and individuals from these countries to secure Russia's government approval.
Japanese firms often require Japanese nonlife insurers when they operate in Russia, for example when building a factory. The Japanese insurers introduce their clients to European insurance companies and receive reinsurance premiums to cover the risks.
Japanese firms can still contract directly with Russian insurers, but they could face higher premiums or reduced coverage, making it difficult for them to continue operations in the country.
According to survey results released in March by Tokyo Shoko Research Ltd., 200 Japanese companies engage in business in Russia.