The Trump administration has doubled its maritime insurance backstop to $40 billion, expanding a flagship effort to restart commercial shipping through the Strait of Hormuz—even as shipowners continue to largely stay away.
The U.S. International Development Finance Corporation (DFC) and Chubb Limited announced Friday that six additional U.S. insurers—Travelers, Liberty Mutual, Berkshire Hathaway, AIG, Starr Companies, and CNA Financial—have joined the Maritime Reinsurance facility, contributing another $20 billion in capacity on top of DFC’s original commitment.
The move comes less than a month after Washington launched the initial $20 billion program, stepping into insurance markets after missile and drone attacks—and a wave of insurer withdrawals—helped drive a collapse in vessel traffic through the Strait.
Despite the rapid expansion, there is little evidence the facility is being used. Industry sources say there have been no confirmed takers on the DFC-backed insurance program so far, even as the government moves to scale it up.
One key reason is that the insurance gap the program was designed to address has, at least partially, closed. War-risk cover—while significantly more expensive—has returned to the market on a voyage-by-voyage basis, allowing shipowners to obtain coverage without relying on the federal backstop.
The original U.S. strategy centered on the idea that insurance withdrawals were the primary bottleneck preventing ships from transiting Hormuz. But more than a month into the crisis, operators appear more concerned about physical risk than financial coverage.
Missile and drone attacks, electronic interference, and unpredictable transit conditions continue to shape decision-making, with many shipowners unwilling to expose crews and vessels—even with insurance in place.
The absence of naval escorts has further reinforced that hesitation. While U.S. officials have floated the possibility of military support, no escort program has materialized, leaving commercial vessels to assess the risk environment on their own.
Under the expanded structure, Chubb will act as lead underwriter, issuing policies and managing claims across war hull, liability (P&I), and cargo coverage, with total capacity now reaching $40 billion on a rolling basis.
Eligibility will be tightly controlled through a multi-agency vetting process, including sanctions screening and detailed disclosures on ownership, cargo, and financing. The scale of the program—and the rapid addition of major insurers—signals strong alignment between Washington and the insurance industry.
But for now, the market response remains muted. Traffic through the Strait of Hormuz is still running far below normal levels after collapsing by as much as 90% at the height of the disruption, with many vessels continuing to wait, reroute, or avoid the region entirely.
Absent a meaningful improvement in security conditions or the introduction of naval escorts, shipowners may continue to sit on the sidelines regardless of how much insurance capacity is offered.
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