Russia’s state reinsurer has provided financial support to three Russian insurance companies, enabling them to obtain approval from India to provide marine insurance cover for oil tankers, two sources said, as Moscow seeks to facilitate trade with India in the context of Western sanctions.
A series of sanctions by the United States and its allies against Moscow over its invasion of Ukraine, as well as stricter monitoring of the Russian oil trade, have almost cut Russia off from the global network of suppliers services such as insurers and brokers.
Russian companies Sogaz Insurance, Alfastrakhovanie and VSK Insurance have joined Ingosstrakh as insurers approved by India to provide marine insurance coverage, according to an order published on the website of India’s shipping regulator .
India approved the three new insurers after the Russian National Reinsurance Company (RNRC) provided a financial guarantee, two sources with direct knowledge of the matter said.
This is the first time that the role of the RNRC in providing financial support to the three Russian insurers to be accredited in India has been reported.
“With the support of the Russian National Reinsurance Company, a 100% owned entity by the Russian government, these insurers benefit from strong financial support and stability,” one of the sources said.
Insurance is essential for shipping, especially for oil cargoes which require the highest safety standards due to the risk of spills.
Representatives of Sogaz Insurance, Alfastrakhovanie and VSK Insurance as well as a representative of RNRC did not immediately respond to requests for comment.
RNRC, controlled by the Russian central bank, was sanctioned by the United Kingdom and the European Union in 2023.
India’s Directorate General of Shipping did not respond to an email from Reuters seeking comment.
“Ingosstrakh does not expand its marine insurance business to India. Our relationship with India in the marine insurance sector has lasted for over 57 years and dates back to 1967 when we opened our office in Mumbai,” an Ingosstrakh spokesperson said in an emailed statement.
The three Russian insurers, specializing in protection and indemnity (P&I) insurance coverage, are not part of the Europe-based International Group, which is made up of twelve P&I clubs.
The IG claims it provides marine liability cover for approximately 90% of the world’s ocean-going vessel tonnage.
“Due procedure was followed (by India’s shipping regulator) to include these new entities in the list of non-IG companies that can provide insurance,” one said. from both sources.
MAIN SUPPLIER
The Group of Seven (G7), the European Union and Australia have imposed a cap of $60 per barrel on Russian oil if Western services such as shipping and insurance are used.
The aim is to reduce Russia’s oil revenues while keeping market supplies stable.
Russia has become one of India’s main oil suppliers, the world’s third largest oil importer and consumer, as its oil has been sold at a discount since Western countries stopped buying oil from Moscow.
The Indian government has said the country is respecting United Nations sanctions and not following those imposed by other countries.
A Source at one of the Indian refiners said that banks are very strict in clearing payments for Russian oil to ensure that the price of Russian crude is below the cap of $60 per barrel.
The price cap mechanism prohibits Western companies from providing shipping services, including financing, insurance and transportation, for oil sold above the cap.
“Why would Russia want to give up its income from insurance premiums and give it to Western insurers? This is not a small amount,” the Source said.
“Even though Russia is legally allowed to use Western services, it does not want to use them.
“This also means that it must share details of its transactions with (Western) service providers.
Indian refiners buy Russian oil on a consignment basis, primarily from traders, to avoid sanctions-related liability before oil cargoes are unloaded.
The accreditation of the three Russian entities is valid until February 20 next year, but that of the Russian company Ingosstrakh has been extended for five years, until February 20, 2029, according to an order published on the website of the Indian Directorate General of Shipping.
