The Union Cabinet on Saturday (18 April) approved the creation of the ‘Bharat Maritime Insurance Pool’ (BMI pool) with a sovereign guarantee of ₹12,980 crore to ensure uninterrupted maritime insurance coverage for Indian trade, the Ministry of Finance said in a statement.
“The pool ensures that Indian trade continues to have access to affordable insurance for vessels carrying cargo from any international origin to Indian ports and vice-versa, even when transiting volatile maritime corridors,” the ministry said.
The initiative aims to address rising global volatility and geopolitical instability that have increased risks and insurance costs for cargo and vessels, while also creating uncertainty around the availability of maritime insurance coverages.
Further, there is high dependence of Indian vessels on International Group of Protection and Indemnity (IGP&I) Club for P&I insurance covering third-party liabilities like Oil pollution liability, Wreck removal, Cargo damage, Crew injury and repatriation, Collision liabilities and so on, the ministry said.
“Accordingly, there was a need for a domestic maritime risk covering pool to maintain sovereignty and continuity of trade in face of withdrawal of coverage due to sanctions or due to geopolitical tensions,” the ministry added.
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“In the above backdrop, the Government has approved formation of ‘Bharat Maritime Insurance Pool’ (BMI pool) for Indian flagged or controlled vessels or vessels destined to or starting from India, backed by a sovereign guarantee,” the ministry said.
The BMI pool will cover a wide range of maritime risks, including Hull and Machinery, Cargo, Protection and Indemnity (P&I), and War risks.
The policies will be issued by insurers that are Pool members, using the combined underwriting capacity of the Pool, which would be around ₹950 crore, the ministry said.
The ministry noted that the creation of the pool will help to manage liability insurance locally, tailored to Indian Shipping conditions and regulatory requirements, develop specialized Marine underwriting, claims management and legal expertise within India.
A dedicated governing body will be constituted to oversee the formation and functioning of the BMI pool.
According to the ministry, the rationale for providing a sovereign guarantee to the proposed domestic insurance entity is rooted in the objectives of strengthening self-reliance, sanctions resilience and ensuring greater sovereign control.
