indemnity vehicle. It is designed to offer an alternative to P&I Clubs and will target those running oil tankers.

The initiative unites ACE with the Aon Natural Resources division, international maritime law firm Clyde & Co. and maritime management services company Michael Else & Co.

Under the deal ACE is to underwrite the first $500 million of coverage. Early reports suggest there were already "substantial commitments'' for excess layers plumping out the total to $1 billion, which are thought likely to be placed internationally, possibly through Lloyd's.

ACE/INA Holdings deputy chairman John Charman said the company's commitment to the project reflected its genuine interest in the oil, energy and shipping industry. He described the initiative as addressing a "substantive and important industry need'' and said ACE was in place to play a key role in resolving the industry's unique risk management challenges.

ANR's managing director of North American operations Jim Pierce praised the "extremely attractive fixed cost price'' the vehicle would offer. "Aon's innovative plan increases pollution coverage limits available to ship owners and improves insuring conditions,'' he said.

"This initiative is designed to supplement the present system. We have recognised and addressed issues and concerns unique to the oil transportation business.''