The Indian government is reportedly considering setting up a $1.5 billion fund to reinsure Indian ships traveling through conflict zones such as the Strait of Hormuz, which remains effectively closed to most international shipping due to the ongoing conflict with Iran.
The report shows that the fund aims to encourage insurance companies to insure Indian ships in conflict-affected waters, and the reinsurance facility is expected to support insurance companies to cope with sharply rising costs during this period.
The report quoted two senior government officials as saying that GIC Re is likely to manage the fund, which would complement measures already announced by the Reserve Bank of India and the Directorate General of Foreign Trade to support industries affected by the Iran conflict.
In related news, the U.S. International Development Finance Corporation (DFC) and Chubb recently revealed that six additional U.S. insurance partners will provide reinsurance for DFC’s maritime reinsurance program: Travelers, Liberty Mutual Insurance, Berkshire Hathaway, AIG, Starr and CNA.
Under the expanded structure, Chubb and the newly announced partners will contribute an additional $20 billion in capacity on top of the existing $20 billion in rolling coverage, increasing total marine reinsurance to $40 billion.
