BE - September 2026

Study reinsurance mechanism. In partner- ship with Chubb, the U.S. Interna- tional Development Finance Corporation (DFC) launched a mar- itime reinsurance facility in early March that was expanded to $40 bil- lion by April, with the participation of several major U.S. insurers (DFC, 2026). The maritime economy rests on a close interaction among transport costs, insurance, and trade finance. As Stopford (2009) shows, insurance costs form part of the overall cost of maritime transport and influence chartering decisions as well as the profitability of commercial opera- tions. In the case of Hormuz, the ef- fects of higher premiums extended far beyond the insurance sector. Banks specializing in trade finance had to incorporate these additional costs into their assessment of fi- nanced transactions. Documentary credits, bank guarantees, and confir- mations of letters of credit became more expensive as insurers reduced their underwriting capacity. Corre- spondent banks also tightened compliance procedures and risk- management frameworks to limit their exposure to applicable sanc- tions-related risks and supply-chain disruptions. Higher insurance premi- ums were therefore transmitted into the financial system through trade fi- nance, turning a geopolitical shock into a source of banking risk. The effect on maritime traffic was im- mediate. According to tanker-track- ing data cited by the U.S. Energy Information Administration, the number of vessels crossing the strait each day fell to between six and eight, compared with roughly 120 to 178 before the crisis - a decline of between 90% and 95% (EIA, 2026; Insurance Business, 2026). Traffic conditions remained fluid, however, as the strait went through several phases of closure and partial reopen- ing over the course of 2026. Given their dependence on interna- tional insurance markets, Iranian authorities sought to establish alter- native mechanisms for risk coverage. Among the measures announced was a cryptocurrency-denominated marine insurance platform for vessels willing to transit the strait despite the reduced availability of traditional cover (Transport Logistique 360, 2026). Beyond its operational impli- cations, the initiative reflects an effort to develop alternatives to established international financing and insur- ance channels. the BANKING EXECUTIVE 58 ISSUE 213 SEPTEMBER 2026