Global property and casualty insurer Chubb, who was recently announced as the lead underwriter for the U.S. International Development Finance Corporation’s (DFC) $20 billion Gulf maritime reinsurance plan, has now outlined the structure and scope of the facility.
The DFC and the U.S. Treasury unveiled the plan to deploy maritime reinsurance, including war risk, in the Gulf region, on March 9th. A few days later, Chubb was confirmed as the lead underwriter of the facility, which will insure losses up to approximately $20 billion on a rolling basis.
Today, the large US insurer has outlined the structure of the facility, confirming that it will provide war marine risk insurance for hull and liability, as well as cargo, with coverage to be offered for war hull risk insurance, war P&I insurance, and war cargo insurance.
Chubb states that the offering will apply to vessels that meet eligibility criteria provided by the U.S. Government, and that the insurance coverage will only be available to ships passing through the Strait of Hormuz under certain conditions. It’s currently unclear what these conditions are.
As the lead underwriter, Chubb will manage the facility, set pricing and terms, assume risk, issue policies for eligible vessels and cargo, and will also manage all claims.
Chubb underlines the important role of commercial shipping in the global economy, emphasising that the creation of this facility will help to “restore market confidence and facilitate the world’s critically important energy and commercial trade.”
The Gulf Maritime Insurance Facility is a public-private partnership between DFC, Chubb, and other American insurance companies who will serve as reinsurers. These additional insurers will be disclosed in the coming days, but Chubb says that they bring deep underwriting experience in marine and marine war coverage.
Lastly, Chubb confirms that the DFC will help coordinate the consortium of American reinsurers and set certain criteria for ships accessing the programme.
