The launch of a £316m ($400m) war-risk insurance facility by Lloyd's of London and insurer Chubb is set to reboot maritime trade through the critical Strait of Hormuz, which has been severely impacted by heightened tensions in the region. The initiative will provide vital capacity for vessels and cargo navigating this waterway, which accounts for a significant proportion of global oil and gas transport.
The consortium will issue primary policies offering substantial financial backing for shipping operations, with up to £158m ($200m) dedicated to both hull and protection and indemnity (P&I) risks, and an additional £158m ($200m) focused on cargo. Chubb's leadership as the lead underwriter is supported by participating Lloyd’s syndicates and specialist market partners, pooling their expertise and capacity to support clients operating in this complex environment.
This development follows a peace agreement between the United States and Iran, which aims to de-escalate conflict and keep the Strait open. US President Donald Trump's announcement that 'all was signed' has sparked some optimism, but G7 leaders are still finalising details. The previous disruption to shipping had severe economic repercussions, pushing Brent Crude prices to a peak of $126 per barrel in March.
Lloyd’s chief executive Patrick Tiernan highlighted the market's role in fostering resilience within marine supply chains, stating that this initiative demonstrates Lloyd's ability to bring together specialist underwriting expertise and global market capacity. Chubb's Evan Greenberg echoed this sentiment, expressing pride in leading the consortium to provide an efficient solution for brokers and clients.
The UK Chamber of Shipping remains cautious, however, with director of policy Peter Aylott indicating that shipping firms would require 'robust evidence' of safe tanker passage before resuming full operations. This underscores the need for sustained stability and verifiable security in the region to realise the benefits of this new insurance capacity.