Why has the pool been introduced?
Indian shipping companies currently depend significantly on overseas insurers, including global Protection & Indemnity (P&I) clubs, for liability cover such as oil pollution, cargo damage, crew-related risks and collision liabilities.
Industry experts note that recent geopolitical developments, including conflict in West Asia, have increased risk perception in maritime trade. This has led to higher insurance costs and, in some cases, reduced availability of cover in international markets.
Balasundaram R, Head of Marine Insurance at Policybazaar for Business, said the pool is designed to provide comprehensive coverage across marine risks and ensure availability of insurance even when global reinsurance capacity is constrained.
He added that the sovereign guarantee positions the government as a backstop in such scenarios.
Amit Goel, Director at Equirus Raghnall Insurance Broking, said global capacity for marine and war risks has tightened, resulting in pricing volatility and occasional gaps in coverage. According to him, a sovereign-backed pool can help ensure continuity of cover for Indian shipping interests while reducing dependence on overseas markets.
How will the pool function?
The maritime insurance pool will be managed by GIC Re, with participation from other domestic insurers contributing underwriting capacity.
- Coverage: The pool will cover hull and machinery, cargo, war risk and Protection & Indemnity (P&I), addressing a broad range of marine insurance needs.
- Eligibility: It will apply to vessels carrying the Indian flag or controlled by Indian entities, including cargo moving to and from Indian ports, even through high-risk routes.
- Capacity: The initial combined underwriting capacity is expected to be around ₹950 crore.
- Sovereign guarantee: The government will provide a ₹12,980 crore guarantee to support the pool in case of large claims or limited market capacity.
- Tenure: The pool is proposed to operate for 10 years, with an option to extend by five years.
- Rishi Mehra, CEO (India) and Head of Strategy, Human Capital, Asia Pacific at Aon, said the initiative enables locally underwritten risk capacity and can support stability in maritime risk management.
What does it mean for the sector?
The pool is intended to provide an additional domestic option for marine insurance, particularly during periods of elevated geopolitical risk when global markets may become more restrictive.
Industry experts also indicated that the initiative could support the development of marine underwriting and claims management capabilities within India over time.