Chubb Named Lead Underwriter for USD 20 Billion U.S. Government Gulf Shipping Insurance Programme

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Chubb to lead $20 billion Gulf shipping insurance program in 2026.

The U.S. International Development Finance Corporation (DFC) named Chubb as lead underwriter for a USD 20 billion maritime reinsurance facility on 10 March 2026.
The programme provides a rolling war risk reinsurance backstop for vessels transiting the Strait of Hormuz amid the ongoing Iran-related conflict.
Chubb will issue primary policies to eligible shipowners, with DFC and a panel of U.S. reinsurers absorbing the tail risk behind Chubb.
Initial coverage focuses on Hull and Machinery and Cargo risks; environmental liabilities such as oil spill clean-up costs are excluded from the facility.
War risk premiums for Hormuz voyages surged by up to 700% by early March 2026, from around 0.125% to as high as 1% of hull value per transit.
The DFC facility is designed to restore market confidence and resume energy and commercial trade flows disrupted by the Iran-related conflict.

Maritime War Risk Insurance Crisis Reshapes Gulf Trade Economics

The Strait of Hormuz - through which roughly 20% of global oil flows pass - has become the focal point of a maritime insurance crisis following escalation of the Iran-related conflict in early 2026. The U.S. International Development Finance Corporation (DFC), a U.S. government development finance body, announced Chubb as lead underwriter for a USD 20 billion maritime reinsurance programme on 10 March 2026. It represents the largest government-backed war risk backstop deployed in the region's insurance history.

The programme is designed to fill the gap left by private war risk markets, which withdrew capacity or demanded prohibitive premiums following missile threats, drone activity and vessel attacks in the Persian Gulf. For UAE-based businesses, logistics chains and financial institutions, the DFC-Chubb facility represents the primary instrument available to stabilise freight costs and restore the insurance structures underpinning regional trade.

Structure of the DFC-Chubb Maritime Reinsurance Plan

Under the programme, Chubb will act as the primary underwriter, issuing policies directly to eligible shipowners and operators transiting the Strait of Hormuz and surrounding Gulf waters. The DFC provides reinsurance cover sitting behind Chubb, alongside a panel of additional U.S. insurance companies already identified, with further reinsurance partners potentially to be added as market conditions develop.

The facility is structured as a rolling USD 20 billion limit, meaning capacity is replenished as claims are paid rather than representing a fixed aggregate. Initial coverage focuses on Hull and Machinery - physical damage to the vessel and its equipment - and Cargo risks, and applies only to vessels satisfying eligibility criteria set by the DFC and its partners. Environmental liabilities such as oil spill clean-up costs are not automatically included and require separate cover.

Why Private War Risk Markets Withdrew from the Gulf

The collapse in available commercial war risk cover traces directly to a sharp escalation of the Iran-related conflict. Missile and drone strikes on vessels and energy infrastructure in the Persian Gulf caused many major oil companies and commodity traders to suspend shipments through the Strait. Several insurers issued cancellation notices for existing war risk policies effective early March 2026.

According to analysis published by UAE Advisor Guide, war risk premiums for Hormuz transits were approximately 0.125% of insured hull value per voyage before the conflict intensified. Within 48 hours of the first strikes, rates rose to between 0.2% and 0.4% of hull value. By early March, some voyages were attracting premiums as high as 1% of hull value - a rise of up to 700%. For a USD 100 million tanker, that equates to war risk costs rising from approximately USD 125,000 to up to USD 1 million per voyage.

Shipping companies have begun rerouting tankers around the Cape of Good Hope, adding 10 to 15 days to Asia-Europe voyages and substantially increasing operating costs. Risk consultancies estimate that approximately 20 million barrels per day of oil supply have been effectively removed from the seaborne market - around one-fifth of global daily consumption.

Chubb's Financial Position and Role as Lead Underwriter

Chubb enters the programme from a position of strong underwriting profitability. In its full-year 2025 results, the firm reported record Property and Casualty (P&C) underwriting income of USD 6.53 billion, up 11.6% on 2024. Its combined ratio - the ratio of claims and expenses to premiums earned - fell to a record low of 85.7%.

DFC CEO Ben Black said the agency was pleased to partner with Chubb to resume energy and trade through the Strait of Hormuz. He described the plan as combining Chubb's underwriting expertise with the financial commitment of the U.S. Government. Chubb Chairman and CEO Evan Greenberg said that the commerce passing through the Strait plays a vital role in the global economy, and that providing vessels with insurance protection is essential for resuming trade flows.

Trade commentators have highlighted Chubb's track record in political risk and marine insurance, its multinational client base, and its operational presence in energy and shipping sectors as key qualifications. These factors position the firm as a natural lead underwriter for a programme that demands speed, technical discipline and political sensitivity.

Implications for UAE Trade and Regional Supply Chains

The withdrawal of war risk cover has generated tangible knock-on effects for UAE corporates, logistics chains and households. UAE Advisor Guide analysis reports that maritime insurance premiums for vessels in the Persian Gulf have risen by around 50% overall. This has raised concerns about higher freight, storage and insurance costs feeding through to inflation in imported goods, including food and other essentials.

The programme has been framed by CNBC and Reuters as a central pillar of Washington's broader strategy to stabilise global energy markets. Reports indicate that President Trump's administration has linked the facility to preventing oil prices from rising further, after Brent crude climbed above USD 100 per barrel during the crisis.

Aon executives have pointed out that for many organisations, the primary risk is prolonged trade interruption and the need to redesign coverage structures to account for a higher baseline of geopolitical volatility. This challenge affects UAE-based clients with Gulf shipping exposure directly, as the disruption simultaneously hits freight costs, insurance pricing and supply chain reliability.

Practical Steps for Insurance Brokers and Risk Managers in the UAE

Insurance brokers advising UAE clients with shipping or cargo exposure should review existing war risk and marine policies urgently to establish whether coverage has been cancelled, suspended or repriced since early March 2026. Where gaps exist, the DFC-Chubb programme may provide a route to replacement cover, subject to vessel eligibility criteria. Brokers should contact the DFC directly to obtain current operational requirements.

Risk managers at UAE importers, commodity trading firms and logistics operators should stress-test supply chain assumptions against scenarios involving both continued Hormuz disruption and a partial resumption of shipping under the new backstop. Coverage structures should be reviewed to ensure that environmental liabilities - which are excluded from the DFC facility - are explicitly addressed in separate policy arrangements.

The hybrid structure of the programme - combining a private sector lead underwriter with a sovereign reinsurance guarantee - represents a structural precedent that advisors may wish to monitor. Similar backstops have historically signalled that private markets will eventually re-engage as confidence returns, but pricing normalisation typically lags the stabilisation of the underlying conflict.

What Clients are Asking their Advisors

What is the DFC maritime reinsurance programme for Gulf shipping?

The DFC maritime reinsurance programme is a USD 20 billion rolling government-backed facility providing war risk cover for vessels transiting the Strait of Hormuz. Chubb serves as the lead underwriter, issuing primary policies to eligible shipowners, while the U.S. International Development Finance Corporation and a panel of U.S. reinsurers absorb the tail risk behind Chubb.

How do shipowners qualify for cover under the DFC-Chubb Gulf shipping scheme?

Vessels must meet specific eligibility criteria set by the DFC and its partners to access cover, which initially focuses on Hull and Machinery and Cargo risks. Businesses and financial institutions seeking access should contact the DFC directly through its designated channels, as further operational details are being released as the programme is implemented.

How does the DFC Gulf shipping insurance backstop compare to post-9/11 aviation insurance schemes?

Both programmes share the same structural logic - a private sector lead insurer backed by a sovereign reinsurance guarantee to restore market confidence after a geopolitical shock. The DFC-Chubb arrangement targets maritime war risk rather than aviation terrorism, but observers have characterised it as operating in the same spirit as the aviation backstops created after September 2001.

What does the Hormuz insurance crisis mean for UAE import costs and inflation?

The surge in war risk premiums and partial withdrawal of private cover has raised freight and logistics costs for shipowners calling at Gulf ports, including UAE terminals. These additional costs risk feeding through to higher prices for imported goods, including food and consumer products. The DFC-Chubb programme is intended to stabilise voyage economics and limit further cost escalation.