US doubles maritime reinsurance cover to $40 billion amid Strait of Hormuz risks

Desk report: The United States has doubled its maritime reinsurance guarantees to $40 billion for vessels transiting the Strait of Hormuz, amid escalating shipping risks linked to the ongoing Middle East conflict.

The US International Development Finance Corporation (DFC) announced the expansion on April 3, 2026, building on an initial $20 billion facility launched last month.

The programme aims to restore confidence and encourage commercial vessels to resume transit through the critical chokepoint, which carries roughly one-fifth of global oil and LNG supplies. Heightened threats, including missile attacks, drones, and sea mines reportedly linked to Iranian actions, have significantly reduced shipping traffic and driven private war-risk insurance premiums to prohibitive levels.

Additional private insurers have joined to provide the expanded $20 billion in reinsurance capacity, including Travelers, Liberty Mutual Insurance, Berkshire Hathaway, AIG, Starr Insurance and CNA Financial, alongside existing partner Chubb.

The coverage focuses on war-related risks, including damage to hulls, cargo and vessels operating in the Persian Gulf region.

The initiative is being coordinated with US Central Command and the US Department of the Treasury as part of broader efforts to mitigate economic fallout from the five-week conflict.

Analysts say that without such government-backed support, many shipowners would likely avoid the route due to heightened and unmanageable risk exposure.

The move underscores the strategic importance of keeping the Strait open for global energy markets, although safety concerns persist despite the financial backstop.