The 'Bharat Maritime Insurance Pool' (BMI Pool) aims to facilitate continuous maritime insurance coverage and insulating India’s maritime trade from global volatility.
What is the BMI Pool?
- It is a government-backed maritime insurance pool with a capacity of $1.5 billion and sovereign guarantee of ₹12,980 crore ($1.4 billion).
- Ministry: Department of Financial Services, Ministry of Finance
- Coverage: Major maritime risks, including Hull and Machinery, Cargo, Protection and Indemnity (P&I) and War risks for-
- Indian flagged or controlled vessels.
- Vessels destined to or starting from India.
- Governance:
- Pool Administrator: General Insurance Corporation of India (GIC Re)
- A Governing Body and an Underwriting Committee to oversee the pool's functions and risk management respectively.
- How BMI Pool Operates:
- Domestic insurers issue policies using the combined capacity of the pool members.
- Combined underwriting capacity of the Pool is ~Rs.950 crore.
- Claims Handling: Up to $100 million (by the Pool own capacity); Exceeding $100 million (triggers sovereign guarantee as a contingent safety net of last resort)
- Domestic insurers issue policies using the combined capacity of the pool members.
Need for the BMI Pool
- Addressing Geopolitical Volatility: Rising global volatility and Middle East tensions have drastically increased maritime risks.
- E.g., disruptions in Red Sea, Strait of Hormuz etc. have increased insurance premiums
- Mitigating Impact of Sanctions: Sanctions can abruptly cut off foreign re/insurance support, disrupting shipping operations and critical trade flows.
- Others: Develop Domestic Expertise in underwriting and claims management, Reduces foreign exchange outflow by reducing dependence on foreign insurers, enhances India’s maritime self-reliance, financial sovereignty and trade security.
Indian Shipping Industry
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