This is an interesting move from the FC in the USA, however the amount of cover involved is trivial in the bigger scheme of maritime risks currently affecting the Straits of Hormuz and the wider Gulf region. Yes $20 billion may well cover one sunken tanker and the associated damage to fisheries, desalination plants, blocked lanes etc. But as incidents like the Evergiven grounding show, costs are ongoing, legal claims never stop being filed, further claims on things like crew deaths or PTSD after an incident can take decades to resolve.
The notion that Trump’s regime can wave a magic wand and replace Lloyd’s 300 years of shipping hull and cargo insurance expertise, the Club model, pooled risks, reinsurance, syndicates etc in a few months is an amusing one, but just like agreeing a peace deal with Hamas or Iran, it’s likely to fail at some point. Trump doesn’t do detail, Chagos proved that.
Maybe governments are the last – and only viable – resort insurers for major conflicts and the huge losses that go with 10-15 ships being sunk and the economies of entire cities being destroyed? For example, no insurer can possibly cover the loss of Dubai’s luxury property market values, assuming the wealthy flee and never return for ten years. All that property value has vanished, even if the drones stop flying.
Here’s the word from the DFC;
U.S. International Development Finance Corporation (DFC) CEO Ben Black and U.S. Treasury Secretary Scott Bessent announced 06. March an agreement on a detailed implementation plan approved by President Trump to deploy Maritime Reinsurance, including war risk, in the Gulf region. In close coordination with CENTCOM, this plan will restore confidence in maritime trade, help stabilize international commerce, and support American and allied businesses operating in the Middle East during the conflict with Iran.
This announcement marks a key milestone toward the rapid implementation of President Trump’s directive to utilize DFC’s innovative financial toolkit to safeguard the continued flow of trade.
“I am grateful to President Trump and Secretary Bessent for their support and approval of DFC’s plan to restore confidence in maritime trade and stabilize international markets. Working alongside CENTCOM, DFC coverage will offer a level of security no other policy can provide. We are confident that our reinsurance plan will get oil, gasoline, LNG, jet fuel, and fertilizer through the Strait of Hormuz and flowing again to the world,” said DFC CEO Ben Black.”
Maritime Reinsurance details:
- DFC reinsurance facility will insure losses up to approximately $20 billion on a rolling basis.
- This revolving insurance offering will apply only to vessels that meet the criteria.
- Insurance will focus on Hull & Machinery and Cargo to start.
- DFC has identified best-in-class, preferred American insurance partners.
- DFC and Treasury are coordinating closely with CENTCOM on next steps in the implementation of this plan.
DFC will continue to provide additional information as it becomes available. Businesses and financial institutions seeking access to DFC’s Maritime Reinsurance product should contact DFC directly at maritime@dfc.gov.
WHO IS THE DFC?
The U.S. International Development Finance Corporation (DFC), established in 2019 with bipartisan support under President Trump, is the international investment arm of the U.S. Government. DFC partners with the private sector to advance U.S. foreign policy and strengthen national security by mobilizing private capital around the world. DFC invests across strategic sectors including critical minerals, modern infrastructure, and advanced technology — fostering economic development, supporting U.S. interests, and delivering returns to American taxpayers.
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