India is planning sovereign guarantees to support insurers that provide cover for vessels travelling in the Persian Gulf, as the Middle East war increases the risks to shipping, said government and industry sources familiar with the matter. The plan includes a $1.5 billion sovereign guarantee fund to provide insurers with reinsurance support and liquidity should insurance costs remain high, said one government source. A separate $300 million fund with contributions from the country's insurance industry is also being set up to help settle any large increase in insurance claims, the same source said. Maritime war risk insurance premiums have surged as much as 1,000% in some cases, as the Middle East conflict heightens risks to shipping through the region. Three insurance industry sources said India's insurance regulator recently sought feedback from industry players on the nature of support needed and on how to implement the funding.
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