U.S. Establishes $20 Billion Reinsurance for Strait Shipping

The United States has launched a $20 billion government-backed maritime reinsurance programme to secure the uninterrupted movement of commercial vessels through the strategically vital Strait of Hormuz. The programme comes in response to escalating regional tensions and the growing risk of conflict-related incidents in the Persian Gulf, with American insurer Chubb designated as the lead underwriter.

Announced on 11 March 2026 by the U.S. International Development Finance Corporation (DFC), the Maritime Reinsurance Plan provides a government financial backstop for war-related maritime risks, including hull and machinery damage, cargo losses, and other conflict-related hazards. By offering coverage where private insurers face capacity constraints, the initiative seeks to stabilise a market that has seen premiums surge in recent weeks.

Heightened threats in the region, including missile and drone attacks, have prompted many private insurers to reduce exposure or increase premiums sharply, creating significant disruptions to maritime commerce. The new programme aims to mitigate these challenges, ensuring that shipping companies retain access to essential insurance coverage.

The plan, implemented under presidential guidance and jointly managed by the U.S. Department of the Treasury and U.S. Central Command, provides rotational coverage of up to $20 billion. Chubb will act as the lead insurer, issuing policies for eligible vessels, while other U.S.-based insurers will contribute additional reinsurance capacity to the scheme.

The Strait of Hormuz remains a critical artery for global energy supply, handling approximately 20% of the world’s seaborne oil exports. Recent security concerns have contributed to a measurable decline in vessel traffic, highlighting the importance of this initiative for both global energy markets and maritime commerce.

Chubb Chairman and CEO Evan Greenberg emphasised the strategic significance of the programme: “The safe passage of commercial vessels through the Strait of Hormuz is essential to global energy security. This initiative reinforces maritime safety and restores confidence for both shipowners and insurers.”

U.S. officials anticipate that the combination of government-backed reinsurance and enhanced regional security measures will gradually restore vessel traffic, including oil, gasoline, liquefied natural gas (LNG), and jet-fuel carriers, ensuring that this key shipping route remains operational.

Key Features of the U.S. Maritime Reinsurance Programme

The programme is expected to provide greater predictability and reassurance to shipping operators navigating one of the world’s most sensitive maritime corridors, safeguarding the steady flow of global energy supplies.