New York-listed Chubb, the world's largest publicly traded property and casualty insurer, has given some details of the structure and scope of the maritime insurance facility created in partnership with the US Government through the US International Development Finance Corporation (DFC).
The facility aims to help restore market confidence and facilitate the world's important energy and commercial trade.
Details of the structure of the facility, as given by Chubb include:
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Chubb, acting as lead underwriter, will manage the facility, determine pricing and terms, assume risk, and issue policies for eligible vessels and cargo. Chubb will also manage all claims.
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DFC will help coordinate the consortium of American reinsurers and set certain criteria for ships accessing the programme.
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The initiative is a public-private partnership between DFC, Chubb and other name-brand American insurance companies who will act as reinsurers. Participating insurers bring deep underwriting experience in marine and marine war coverage.
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The facility will provide war marine risk insurance for hull & liability as well as cargo. Coverage will be offered for war hull risk insurance, for war P&I insurance and war cargo insurance.
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The offering will apply to vessels that meet eligibility criteria provided by the US Government. (The criteria have yet to be disclosed.)
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This insurance will be available to ships transiting the Strait of Hormuz and only under certain conditions.
The additional American insurance companies will be disclosed in the coming days, said Chubb.
US President Donald Trump ordered DFC on 3 March to provide political risk ?insurance and financial guarantees for maritime trade in the Gulf after oil and liquefied natural gas ?tanker transit had ground to a halt in the Strait of Hormuz off ?Iran, through which 20% of global oil moved daily before the hostilities started.
On 11 March, the DFC announced that Chubb is the lead underwriter for the $20bn rolling maritime reinsurance plan.