The underwriting capacity of The ₹950 crore to be created under Bharat Maritime Insurance Pool (BMI Pool) by the Centre is `inadequate’ but good for making a beginning, according to industry experts. 

It can be seen as inadequate considering that a Very Large Crude Carrier (VLCC) can carry upto 2 million barrels of crude which at today’s value of crude at around $100 to a barrel will be $200 Million or ₹1900 crores. However, it makes a beginning, say industry experts. 

“If the capacity is on a per vessel basis, then there is nothing left to cover the hull and P&I risks after insuring the cargo, which in itself cannot be fully insured,’’ Hari Radhakrishnan, Expert, Insurance Brokers Association of India (IBAI) told Business Line on Sunday. 

The Union Cabinet on Saturday approved the creation of Bharat Maritime Insurance Pool’ (BMI Pool) with a sovereign guarantee of ₹12,980 crore aimed at insulating India’s maritime trade from global volatility. 

While the move is expected to reduce dependence on foreign underwriters and ensure uninterrupted risk coverage for Indian shipping by providing coverage across key segments — hull and machinery, cargo, protection and indemnity (P&I), and war risk — for Indian-flagged and Indian-controlled vessels, including those operating in conflict-prone international waters. 

However, this should have been done long back, at least decades ago, with geopolitical risks and sanctions putting restrictions on availability of reinsurance capacity from western markets

Any pool arrangement takes time to develop and build capacities and expertise in underwriting and claims handling. It is instructive in this context to look at the terrorism policy. 

For example, the terrorism policy (pool) started with ₹200 crore capacity for single risk in 2002, post 9/11 incident which evaporated the reinsurance capacity for terrorism. It now grew to a capacity of ₹2000 crore. `` Anyway, a start has been made and it is important to consolidate on this,’’ the IBAI expert said. 

According to Amit Goel, Director, Equirus Raghnall Insurance Broking, the approval of the BMI Pool was a timely and strategic intervention. 

“We have seen global capacity for war and Maritime risks tighten significantly which has led to both pricing volatility and in the same case lack of cover. A sovereign backed Pool ensures continuity of cover for Indian shipping interests while reducing dependence on overseas markets,’’ he said.

“Over time, this could also catalyse the development of domestic underwriting expertise in complex marine and P&I risks,’’ Goel added. 

Published on April 19, 2026