Global property and casualty insurer Chubb, recently announced as the lead underwriter of US International Development Finance Corporation’s (DFC) US$20 billion Gulf marine reinsurance program, has now outlined the structure and scope of the facility.
On March 9, DFC and the US Treasury Department announced plans to deploy marine reinsurance (including war risk) in the Gulf region. Days later, Chubb was confirmed as lead underwriter of the facility, which will cover losses up to about $20 billion on a rolling basis.
Today the major US insurer outlined the structure of the facility, confirming that it will provide war marine risk insurance for hull and liability as well as cargo, as well as provide war hull risk insurance, war P&I insurance and war cargo insurance.
Chubb said the product will be available to ships that meet eligibility criteria set by the U.S. government, and coverage will only be available to ships transiting the Strait of Hormuz under certain conditions. It’s unclear what those conditions are.
As lead underwriter, Chubb will manage the facility, set pricing and terms, assume risk, issue policies for eligible vessels and cargo, and manage all claims.
Chubb highlighted the important role of commercial shipping in the global economy and stressed that the creation of the facility will help “restore market confidence and facilitate the world’s vital energy and commercial trade.”
The Gulf Marine Insurance Fund is a public-private partnership between DFC, Chubb and other U.S. insurance companies that will act as reinsurers. The additional insurers will be revealed in the coming days, but Chubb said they have extensive underwriting experience in marine and marine war insurance.
Finally, Chubb confirmed that the DFC will help coordinate a consortium of U.S. reinsurers and set certain standards for ships participating in the program.
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