【Iran Crisis】Anda Insurance to Lead Insurance for Ships Passing through the Strait of Hormuz; DFC Provides Reinsurance Coverage for $20 Billion in Losses

Chubb (NYSE: CB) announced it will be the primary underwriter for a $20 billion U.S. government-led program aimed at insuring ships passing through the Strait of Hormuz. The initiative will collaborate with the U.S. International Development Finance Corporation (DFC) to help oil tankers and other commercial vessels resume navigation amid the risks of war in Iran.

Evan Greenberg, Chairman and CEO of Chubb, stated that trade passing through the Strait of Hormuz plays a critical role in the global economy, and providing insurance coverage for ships is essential for restoring trade flows. Chubb will offer final insurance coverage to shippers.

Ships Avoid Using the Strait of Hormuz Due to Attack Concerns

The DFC program will provide reinsurance to insurance companies and will underwrite approximately $20 billion in losses on a rolling basis. DFC said that, besides Chubb, it may also partner with other companies.

Since the outbreak of war between the U.S., Israel, and Iran in late February, ships have been reluctant to use the Strait of Hormuz due to fears of attacks on cargo ships. The UK Maritime Trade Operations center reported on Wednesday that three vessels near the Iranian coast were attacked by gunfire.

The Strait of Hormuz connects the Persian Gulf and the Arabian Sea and is the only maritime route for ships leaving the Gulf region.