March 11 (Reuters) – Insurance giant Chubb will be the lead partner in the U.S. International Development Finance Corporation’s $20 billion marine reinsurance plan aimed at reviving commercial shipping in the Gulf, the agency said on Wednesday.
The US-Israeli conflict has escalated rapidly in recent days and has disrupted shipping through the Strait of Hormuz, the world’s largest crossing in the Gulf.
Iran said the world must reach $200 per barrel for oil as its forces attacked merchant ships in the Gulf on Wednesday. Meanwhile, US President Donald Trump has tried several times this week to reassure markets that the campaign will end soon.
So far, there has been no shortage on land and no ships can safely pass through the Strait of Hormuz, where about a fifth of the world’s oil flows, raising the risk of the worst disruption to energy supplies since the oil shocks of the 1970s.
Marine insurance covers ships and cargo against perils such as accidents, piracy or disputes, with ship owners paying a premium that the insurer assesses the likelihood of losses.
War risk coverage is generally excluded from standard policies and must be purchased separately, often at significantly higher premiums for ships in war zones.
Without such coverage, hundreds of millions of dollars worth of ships and cargo would suffer losses from attacks or captures, leaving owners and financiers vulnerable and ships sailing through such waters.
DFC said its reinsurance facility will insure losses of up to $20 billion on a rolling basis and the insurance will initially focus on hull and cargo.
“Together, DFC and Chubb have identified several US insurance companies to provide reinsurance policies behind Chubb and together with DFC to expand market capacity,” the agency added.
(Reporting by Manya Saini in Bengaluru; Editing by Krishna Chandra Elori)
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