Chubb set as main U.S. insurer for Persian Gulf shipping amid Iran war

In this articleInsurance giant Chubb will be the lead underwriter for a U.S. government-led program to provide insurance to ships making the risky transit through the Strait of Hormuz.Chubb will work with the U.S.

International Development Finance Corporation as part of a $20 billion plan to help get oil tankers and other commercial traffic moving again amid risks from the Iran war, the agency said. Oil prices have spiked since the war began at the end of February. Brent crude traded above $91 a barrel midmorning Wednesday. Oil prices have stayed relatively high despite an announcement Wednesday that the International Energy Agency would coordinate the release of 400 million barrels from its member countries' strategic petroleum reserves. In normal times the strait sees passage of 15 million barrels a day of oil and another 5 million in other oil products, IEA chief Fatih Birol said. That flow has stalled despite a scramble by companies and governments to relieve the pressure. Ship crews are reluctant to use the route for fear they could be attacked. Three ships off Iran's coast were struck by projectiles Wednesday, the U.K.

Maritime Trade Operations center said Wednesday.The strait connects the Persian Gulf to the Arabian Sea, making the narrow route along Iran's southern coast the sole maritime route out of the oil-rich region."The commerce passing through the Strait of Hormuz plays a vital role in the global economy, and providing vessels with insurance protection is essential for resuming trade flows," Chubb Chairman and CEO Evan Greenberg said in a statement.The company will be "the focal point to funnel in all the information on the ships and the cargo and to work alongside us to facilitate this insurance," a DFC official said, speaking on condition of anonymity."At the end of the day, DFC doesn't have actuaries ourselves. We don't have the staff to be the focal point for the market," the official said.The DFC program provides reinsurance — or secondary insurance for insurance companies — to cover approximately $20 billion in damages on a rolling basis. Chubb will provide the end insurance to shippers. The DFC may also work with more companies in addition to Chubb, the agency said. There has been some confusion about the extent of the DFC coverage, which is aimed narrowly at the potential war-related costs for eligible vessels. It will cover hulls, machinery and cargo. Analysts have said ships would also need coverage for the environmental cost of cleaning up after an oil spill.The DFC coverage would cover environmental damage, the official said. "We are providing that coverage baked within that hull and machinery product."What is ultimately stopping ships from moving is the raw danger of being near a war zone. Insurance may help at a high level, but ships won't move if crews fear for their lives.

President Donald Trump, who has said the Iran war will be brief, on Tuesday warned Iran would be hit "TWENTY TIMES HARDER" if it attempts to halt shipments through the Strait of Hormuz. Earlier this week, when talking with CBS News about the strait, Trump said he was "thinking about taking it over."The best case for oil prices would be an end to the conflict, but failing that the U.S. may be able to help by providing military escorts to ships through the strait."The physical insurance that only the U.S. military can provide, and the financial risk that insurance can provide, need to go hand-in-hand," said Rachel Ziemba, a senior advisor at Horizon Engage, a political-risk advisory firm. Got a confidential news tip? We want to hear from you.Sign up for free newsletters and get more CNBC delivered to your inboxGet this delivered to your inbox, and more info about our products and services.© 2026 Versant Media, LLC.

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