Indian government approves sovereign backed maritime insurance pool to cut reliance on overseas cover, stabilise war risk premiums and support Indian shipping.The government has approved a ₹12,980 crore sovereign-backed maritime insurance pool to provide domestic capacity for insuring Indian shipping risks. The initiative comes at a time when global marine insurance markets have seen tighter capacity and higher premiums, particularly for war-related risks.
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.
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.
