Lloyd’s has launched a market consortium dedicated to marine war risk, as the insurance market looks to provide extra cover for vessels navigating the Strait of Hormuz.
The consortium will issue primary policies for vessels and cargo, covering specific war, terrorism, piracy and related risks, Lloyd’s said.
It can provide up to US$200mn of cover for hull and protection and indemnity risks, and a further US$200mn of cargo capacity.
Global insurer Chubb will act as lead underwriter and work alongside participating Lloyd’s syndicates and specialist market partners.
Despite the risks involved with passing through the Strait of Hormuz, data from Allianz’s latest review of shipping losses showed that around 1,150 cargo-carrying vessels were operating in Persian Gulf waters as of June 15.
This represents an estimated vessel and cargo value of US$125bn, according to the report.
Evan Greenberg, chief executive of Chubb, said: “As a global leader, Chubb is actively working to provide coverage and organise needed capacity as vessels begin moving through the Strait of Hormuz.
“We are proud to lead this consortium, which provides our brokers and clients with a simple, efficient solution to their insurance needs while highlighting the importance our industry plays in supporting global commerce.”
Patrick Tiernan, chief executive of Lloyd’s, added that the consortium aimed to “increase the depth and breadth of solutions available to brokers and clients” responding to the evolving situation.
“Lloyd’s will work closely with Chubb and participating syndicates to help mobilise additional specialist capacity swiftly and responsibly in support of ships, crews and cargo,” Tiernan said.
Last month, GTR reported that vessel visibility had “deteriorated sharply” in the Strait of Hormuz and Gulf of Oman.
This, combined with physical attacks and extra compliance exposure, was “likely to increase war-risk insurance premiums”, maritime intelligence agency Windward said in a report.
