NEW DELHI: As conflict in West Asia disrupts crude and gas supply chains—partly due to reduced vessel movement linked to insurance constraints—the government has approved the creation of the Bharat Maritime Insurance Pool (BMI Pool) with a sovereign guarantee of ₹12,980 crore. The government said that the objective of the BMI Pool is to ensure uninterrupted and affordable marine insurance for India’s shipping sector, while also reducing dependence on foreign insurers, particularly global groups such as the International Group of P&I Clubs, which currently dominate the maritime insurance market.
Recently, conflict in West Asia has disrupted the movement of cargoes in and around the Strait of Hormuz, with many shipowners halting operations. Insurance companies have also become cautious, with some unwilling to provide coverage due to heightened war-related risks.
According to the government, the BMI Pool will function as a collective of Indian insurance companies working together to provide marine insurance. Under the new framework, multiple domestic insurers will combine their financial strength to form a shared pool. Information and Broadcasting Minister Ashwini Vaishnaw said that public sector reinsurer General Insurance Corporation of India (GIC Re) will act as the administrator of the pool.
He added that GIC Re will contribute around ₹400 crore, while public sector general insurance companies will contribute about ₹280 crore, with the remaining amount coming from private sector insurers and oil marketing companies.
The minister also noted that the conflict involving Iran and Israel has led to a sharp increase in insurance premiums globally.
“The BMI Pool will cut down the cost of insurance premium by at least 25% as of now,” Vaishnaw said.
Ships transporting goods such as oil, gas, food, and other commodities require insurance to protect against risks including accidents, piracy, war, oil spills, and cargo damage. So far, India has largely depended on foreign insurers like the International Group of P&I Clubs for such coverage, as these entities provide global marine insurance services.
The BMI Pool will provide insurance coverage for Indian-flagged vessels, Indian-controlled ships, as well as ships arriving in or departing from Indian ports. The coverage will include hull and machinery damage, cargo loss or damage, third-party liabilities such as oil spills, collisions and crew injuries, as well as war and conflict-related risks.
Under the proposed structure, policies will be issued through the BMI Pool, with risks and liabilities distributed among participating insurers. The pool itself will have an underwriting capacity of around ₹950 crore.