FOUR weeks ago, Donald Trump told his 11.8m followers on Truth Social that he was putting in place a marine war risk insurance scheme for vessels in the Middle East Gulf, “effective IMMEDIATELY”. It’s fair to say that the plan hasn’t been immediately effective.

A month later, multiple underwriting and law firm sources in London and other countries have told Lloyd’s List they are unaware of any vessels whatsoever being insured under the new US government mechanism.

The only people who can say for certain whether or not the facility is functional are the US International Development Finance Corporation, the federal agency taking the lead, and Chubb, the insurance giant that is handling the commercial side of the arrangement. Neither is denying the suggestion.

Marine insurers have been sceptical about the whole project ever since the get-go. Trump’s intention seems to have been to overcome jitters that the US and Israeli attack on Iran launched in late February was making it impossible for shipowners to obtain war risk insurance from commercial providers, as was widely reported at the time.

But as Lloyd’s List has consistently countered — even when few seemed to be listening at first — such contentions were simply not true. The market has been writing all marine classes in the Middle East Gulf all along.

It is true that rates have jumped five or sixfold since the fighting commenced. But that is broadly commensurate with the increased level of risk.

What we are left with — in the words of a lawyer who specialises in marine insurance issues — is “a non-solution to a non-problem”, and the odds are a ceasefire will be in place before the facility closes its first deal.

David Osler
Law and insurance editor, Lloyd’s List

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