Context
- Recently, the Bharat Maritime Insurance Pool (BMIP), India’s first domestic maritime insurance pool, launched on May 2026 to reduce dependence on foreign insurers. It provides insurance cover against Hull & Machinery, Cargo, Protection & Indemnity (P&I) and War risks.
About Bharat Maritime Insurance Pool (BMIP)
- Timeline: Approved on 18 April 2026; formally launched on 12 May 2026.
- Underwriting capacity: ₹13,906.50 Crore (USD 1.5 billion).
- Sovereign guarantee: ₹12,980 Crore (USD 1.4 billion).
- Duration: 10 years, extendable up to 15 years.
- Pool Administrator: General Insurance Corporation of India (GIC Re); a Governing Body oversees operations and an Underwriting Committee evaluates risks.
- Eligible vessels: Indian-flagged vessels, vessels owned, managed or controlled by Indian entities, and cargo vessels to or from India.
Risks Covered under BMIP
- Hull & Machinery: Protects the ship’s structure, propulsion systems and installed equipment.
- Cargo (War perils): Covers goods in transit through High-Risk Areas.
- Protection & Indemnity (P&I): Covers liabilities such as pollution, wreck removal and crew injury.
- War Risk: Covers armed conflict, piracy, terrorism and hostile vessel seizure.
How the Pool Works
- Policy issuance: Issued by domestic insurer members, using their combined capacity.
- Reinsurance: Risks are collectively reinsured by all members in proportion to committed capacity.
- Claims: Up to USD 100 million are met from reserves and reinsurance; the sovereign guarantee activates for larger claims only after reserves are fully exhausted.
Why BMIP Was Needed
- Trade dependence: 95% of trade by value and 70% by volume move through sea routes.
- Foreign dependence: Indian ship owners rely almost entirely on the 13 International Group P&I Clubs, which insure about 90% of the world’s large ships.
- Forex outflow: About USD 45–60 million annually in P&I premiums.
- Geopolitical risk: Red Sea conflicts and Strait of Hormuz tensions led foreign insurers to raise premiums or withdraw cover.
India’s Maritime Infrastructure
- Ports: 12 Major and 217 Non-Major ports; Coastline: about 11,098 km.
- Exclusive Economic Zone (EEZ): 2.4 million square km; Inland waterways: over 14,500 km.
Conclusion
The Bharat Maritime Insurance Pool strengthens India’s maritime sovereignty by providing sovereign-backed, affordable domestic cover for vessels and cargo.
| Important CTC from this article for UPSC Prelims — Exclusive Economic Zone (EEZ) General Insurance Corporation of India (GIC Re) |