US reinsures Gulf maritime losses up to $20 billion
Change
US is providing reinsurance for maritime losses in the Gulf of up to $20 billion on a rolling basis, initially covering hull, machinery, and cargo insurance.
Why it matters
The move creates a government-backed loss-bearing layer for high-value Gulf transits, changing who ultimately absorbs extreme losses from Gulf incidents. Market participants must now factor a US-provided backstop into underwriting, pricing, and voyage risk decisions for routes through the Strait of Hormuz.
Implications
- • Oil and liquefied natural gas tanker operators should reassess voyage insurance purchases for Gulf transits to incorporate availability of US-backed coverage.
- • Hull, machinery, and cargo underwriters must reprice Gulf risk layers and adjust retention levels in light of the new government-linked reinsurance capacity.
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Source
Topics
International Affairs Security & Defense Regulatory Actions Oil & Gas Insurance