Carriers looking for insurance for services through the Middle East may finally have a willing partner, after the US International Development Finance Corp (DFC) confirmed it had landed an underwriter for its maritime insurance programme.
US treasury secretary Scott Bessent announced last week that President Trump had approved a plan to deploy maritime reinsurance, including war-risk, in the Gulf region, with news late last night that Chubb would serve as the lead partner for the $20bn scheme.
“DFC is pleased to partner with Chubb, one of the world’s leading insurance companies, to help get energy and trade flowing again through the Strait of Hormuz, said DFC CEO Ben Black. “We are one step closer to restoring market confidence and resuming energy and commercial trade disrupted by the conflict with Iran.”
Under the programme, losses of “up to approximately” $20bn will be insured on a rolling basis, with the initial focus on hull and machinery and cargo, before potentially expanding, but the DFC noted the offering would “only apply to vessels that meet eligibility criteria”.
Crucially, the government department has yet to provide any details of this criteria, while insurance experts appear uncertain about the capacity of the programme to underwrite the level of risk to ships transiting the region.
JP Morgan reportedly suggested that the DFC had less than half the funds needed to fully insure the more than 300 oil vessels in the region, let alone the container vessels that are struggling to reach port in the Gulf.
But a DFC spokesperson rejected JP Morgan’s assertions, telling the UK Financial Times the facility would only be required when vessels were in the war zone, adding: “We’re tailoring it to the specific policies that the market needs to restart maritime commerce.”
Forwarders may prove more receptive to the scheme, telling The Loadstar the decision of insurers to pull coverage for transits in the region was proving decisive when it came to carrier services in region.
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