The Bharat Maritime Insurance Pool (BMIP) represents India's strategic response to global insurance market volatility, according to Hitesh Joshi, officiating chairman-cum-managing director of General Insurance Corporation of India (GIC Re). As reported by Mint, global reinsurers have a track record of issuing cancellation notices for war-risk covers during conflict zones, creating serious risks for India as one of the world's largest crude oil importers and a major trading economy. The ₹12,980-crore sovereign-backed pool was launched to ensure continuity of cover for Indian vessels when international markets withdraw or premiums become prohibitively expensive. "There will not be any need to seek support from global reinsurance partners," Joshi emphasized, highlighting the pool's design as a fully domestic solution to reduce dependence on external markets, especially during periods of uncertainty.
The pool has a domestic capacity of approximately ₹927 crore, which will be fully retained within the Indian insurance market through commitments from both public and private insurers, as reported by Mint. For high-severity losses, including scenarios where vessels are destroyed or severely damaged in war theatres—potentially running into a billion dollars—the sovereign guarantee kicks in as the ultimate backstop. This takes the total coverage up to ₹13,900 crore, primarily in the P&I segment. "The pool's own capacity will respond first and for losses that exceed that capacity, the sovereign guarantee will serve as the ultimate financial backstop," Joshi explained, ensuring that even catastrophic claims can be supported without disrupting the continuity of cover for Indian shipping and trade.
Premiums under BMIP are expected to be materially lower than international market rates—potentially by around 25%—due to the sovereign guarantee and steady domestic volumes, as reported by Mint. These savings will be passed on to shipowners and cargo interests. "This is indeed realistic," Joshi confirmed, noting that the cost benefits stem from the sovereign guarantee and steady domestic volumes. The pool is designed as a fully domestic solution to reduce dependence on external markets, with all policies issued in Indian currency to eliminate sanctions-related payment risks. GIC Re will follow a phased approach for complex areas like P&I liability assessment, initially focusing on coastal vessels to build specialized expertise and create a robust domestic P&I ecosystem.
The BMIP, managed by GIC Re, will provide war-risk covers for hull & machinery and cargo, along with the full suite of P&I liabilities, according to Mint reports. Hull & machinery and P&I covers will apply primarily to Indian-flagged or Indian-controlled vessels, while cargo cover will extend to shipments originating from or destined for India. All policies under BMIP will be issued by member insurance companies of the pool, with GIC Re appointed as the pool manager responsible for risk aggregation, pricing, claims management, and overall operations. "GIC Re has been appointed as the pool manager, responsible for risk aggregation, pricing, claims management, and overall operations, working closely with the underwriting committee," Joshi explained. Success metrics over the next three years will focus on higher premium retention within India, reduced forex outflow, lower insurance costs for the industry, and enhanced strategic resilience.
