Japanese non-life insurers have decided to suspend business with domestic firms that continue to operate in Russia, according to a report by Kyodo News.
Insurers such as Tokio Marine Nichido will no longer be undertaking new contracts with companies still operating in Russia, nor will they be renewing existing contracts after they expire.
This decision comes in the wake of Russia’s countermeasures against economic sanctions imposed by Japan and Western nations. Companies from nations “unfriendly” to Russia are now required to secure government approval if they plan to continue conducting business in the country.
While Japanese firms can still turn to Russian insurers for coverage, they now run the risk of facing higher premiums or reduced coverage, limiting their ability to operate in Russia.
A survey conducted by credit research firm Teikoku Databank found that 37 of 168 Japanese firms operating in Russia had planned to leave the country by March 15 due to logistics and supply-chain disruptions.
Even as the majority of those surveyed remained unsure of their future in Russia, Teikoku Databank predicted that the number of firms pulling out of Russia would continue to increase, considering the risks associated with their continued presence in the country.
According to Teikoku Databank, Japanese firms still operating in Russia risk ruining their reputation, as their continued operations could be viewed as support for the invasion in Ukraine. Furthermore, they might soon face the threat of Russia nationalising the assets of foreign businesses leaving the country.
