In March, the U.S. International Development Finance Corporation (DFC) announced that Chubb would serve as the lead underwriter for a new maritime reinsurance program that will provide coverage for commercial vessels passing through the Strait of Hormuz amid the Iran conflict. However, according to leadership from Chubb, the program is currently at a standstill.
In a quarterly earnings call, Chubb CEO Evan Greenberg said the program has yet to begin because it is conditioned on the use of U.S. Navy convoys and escorts, The Maritime Executive reports.
"The government wanted to support shipping through the Gulf when they think that the risk environment is such that they can support military convoys for ships," Greenberg reportedly said in the earnings call. "And that has yet to occur. The program is to insure shipping under those conditions."
Greenberg also clarified to those on the call that the insurance program will be activated only if a convoy occurs, and that shipowners must purchase insurance through the program before they are allowed to join the convoy.
According to a release from Chubb, the new facility will provide war maritime risk insurance for cargo, as well as hull and liability, with coverage also offered for war hull risk, war P&I and war cargo.
In early April, the DFC announced that six other insurers had joined the program as partners: Travelers, Liberty Mutual, Berkshire Hathaway, AIG, Starr and CAN. Under the reinsurance program, the DFC will provide $20 billion in rolling coverage, with participating insurance carriers providing an additional $20 billion, increasing the total maritime reinsurance facility to $40 billion.
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