The Trump administration’s March 6 plan to reopen shipping through the Strait of Hormuz will require some time before it can be activated and its impact assessed. The plan is unusual because it relies less on direct military force and more on financial tools — especially U.S. Government-backed insurance — combined with selective naval protection. The core idea addressed by the plan is that Gulf shipping has been paralyzed primarily because insurers pulled out, not because the strait was physically blocked.
Restarting private insurance coverage
The freezing of shipping around the Persian Gulf underlies an important reality: global energy flows depend heavily on insurance markets. As soon the war started on February 28, threats and attacks against tankers caused major maritime insurers to cancel war-risk coverage in the Gulf. Without insurance, ships cannot legally operate or obtain financing.
Under the new plan, the U.S. International Development Finance Corporation (DFC) will provide reinsurance, meaning the U.S. government backs private insurers so they are willing to issue the all-important war-risk policies again. Critics of the plan have pointed out however that the $20 billion insurance pool may be too small at the start and actual needs may be closer to $350 billion.
Potential security measures
The insurance plan is paired with potential security measures. The Trump administration has stated the U.S. Navy could escort tankers through Hormuz if necessary. Coordination is happening with United States Central Command (CENTCOM), which oversees U.S. military operations in the region. The DFC insurance mechanism is meant to reduce the need for large-scale convoy operations but here are a few possible tools that could be utilized:.
- Naval escorts for tankers
- Surveillance and drone protection
- Mine-clearing operations
- Intelligence sharing with shipping firms
Weaponing finance in a conflict period
In this situation the administration is using the DFC as a strategic financial instrument — essentially weaponizing finance to reopen a maritime chokepoint. While DFC normally finances infrastructure and backs investments in developing countries, it should not be forgotten that the DFC absorbed most of the insurance functions of its predecessor organization, the Overseas Private Investment Corporation (OPIC) in the course of its establishment by the first Trump administration. Accordingly, its familiarity with insurance markets, as well as the very challenging requirements for overseas political risk insurance, is a historical legacy.
Greek shipowners may be the first to move
Time will tell. The global maritime insurance market is centered in London at institutions like Lloyd’s of London, with Greek shipping companies some of its largest clients. The first ships likely to test it may well be Greek-owned tankers, because Greek shipowners control so much of the global crude fleet and historically have been the most willing to operate in risky geopolitical environments.
DFC designates lead insurance partner for its Maritime Reinsurance planÂ
DFC announced on March 11 that Chubb will serve as the lead partner for DFC’s $20 billion Maritime Reinsurance plan designed to resume commercial shipping in the Gulf.  Â
“DFC is pleased to partner with Chubb, one of the world’s leading insurance companies, to help get energy and trade flowing again through the Strait of Hormuz. DFC’s Maritime Reinsurance plan combines Chubb’s premier underwriting expertise with the financial commitment of the U.S. Government. With today’s announcement, we are one step closer to restoring market confidence and resuming energy and commercial trade disrupted by the conflict with Iran,” noted DFC CEO Ben Black. Â
“Chubb is proud to lead and manage this program in partnership with the United States Government and the U.S. International Development Finance Corporation. 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,” said Evan Greenberg, Chairman and CEO of Chubb. Chubb, a NYSE listed company, is the world’s largest publicly traded Property & Casualty insurer and is a best-in-class provider of Political Risk and Maritime insurance. The company has decades of experience servingÂ
Begin Text of U.S. International Development Finance Corporation (DFC) March 6 media release:
DFC Announces $20B Plan for Maritime Reinsurance in the GulfÂ
U.S. International Development Finance Corporation CEO Ben Black and Treasury Secretary Scott Bessent announced today 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 [email protected].
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.