DFC, Chubb Maritime Reinsurance Plan Doubles to $40 Billion with 6 New Partners
Weeks after unveiling a $20 billion maritime reinsurance program to stabilize shipping through the Strait of Hormuz, the U.S. International Development Finance Corporation (DFC) has doubled the facility’s capacity by bringing in additional private-sector reinsurers.
Last week, DFC and Chubb announced that six major American insurers—Travelers, Liberty Mutual Insurance, Berkshire Hathaway, AIG, Starr and CNA—have joined the public-private partnership, adding another $20 billion in coverage and bringing total available capacity to $40 billion.
The expanded facility builds on DFC’s earlier initiative announced in March to backstop war risk coverage for vessels transiting the Gulf region as geopolitical tensions with Iran sharply curtailed shipping traffic and drove insurance costs higher. At the time, DFC committed up to $20 billion in reinsurance capacity, with Chubb named as lead underwriter.
Under the expanded structure, DFC will continue to provide up to $20 billion in coverage, while Chubb and the newly added partners collectively supply a matching $20 billion. Chubb will manage the facility, set pricing and terms, issue policies and handle claims for eligible vessels and cargo.
Coverage includes war hull risk insurance, war protection and indemnity insurance and war cargo insurance. The reinsurance applies on a revolving basis and is intended to support vessels that meet eligibility standards set by DFC and its interagency partners, including sanctions and know-your-customer reviews.
“DFC is proud to welcome Travelers, Liberty Mutual, Berkshire Hathaway, AIG, Starr and CNA as additional reinsurance partners for our joint $40 billion Maritime Reinsurance plan,” said Ben Black, DFC CEO. “Along with Chubb, these leading American insurers bring deep underwriting experience in marine and marine war coverage, strengthening our efforts to help restore confidence in maritime trade.”
In statements from the partners backing the program, the expansion in coverage was framed as a stabilizing force for global shipping and energy markets at a time when private insurers have struggled to absorb escalating war risks on their own.
“Chubb is proud to lead and manage this program in partnership with the United States Government through the U.S. International Development Finance Corporation,” said Chubb CEO, Evan Greenberg. “The commerce passing through the Strait of Hormuz plays a vital role in the global economy, and providing vessels with insurance protection is essential for resuming trade flows.” .
Alan Schnitzer, chairman and CEO of Travelers stated that “reliable insurance capacity matters most in periods of uncertainty. This public-private partnership brings stability to maritime trade at a critical moment, and we’re pleased to contribute our expertise and financial strength alongside the United States Government through DFC and a strong group of industry partners to support global commerce and U.S. economic interests.” .
Tim Sweeney, Liberty Mutual Insurance chairman, president and CEO said “as a market leader in specialty insurance and risk advisory services, we have joined the mobilization of this facility to help support the restoration of maritime commerce.”
Ajit Jain, vice chairman of Berkshire Hathaway-Insurance Operations said, “we are very pleased to support Chubb and DFC on this initiative, and we commend all the reinsurers for stepping up to demonstrate how our industry can help to meet important needs as they arise.”
Chairman and CEO of CNA, Douglas M. Worman said “this initiative demonstrates how public and private partners can come together to address real‑world risk. CNA is proud to contribute our marine underwriting expertise in collaboration with other industry leaders.”
“The U.S. Government’s mission of providing critical insurance capacity for vessels operating in the Strait of Hormuz through the DFC is vital to supporting global commerce and stability. AIG is pleased to support this effort with risk solutions that will safeguard the resiliency of this important global trade route,” said Eric Andersen, president and CEO-elect of AIG.
The expansion comes as the United States, Israel and Iran agreed this week to a temporary ceasefire, easing immediate fears of further escalation in the Gulf. Despite the diplomatic breakthrough, commercial shipping has yet to resume in a meaningful way through the Strait of Hormuz, with hundreds of vessels still waiting for clearer security assurances and operational guidance before transiting the waterway.
The ceasefire may formalize an Iranian system of charging fees in the Strait of Hormuz, through which 20% of all traded oil and natural gas passes.
Will Jones is IA editor in chief.
