The United States has launched a $20 billion maritime reinsurance facility aimed at restoring shipping through the Strait of Hormuz as conflict with Iran disrupts global energy trade.

The programme, led by the US International Development Finance Corporation, will provide insurance protection for vessels travelling through the Gulf and will be underwritten by Chubb Ltd as lead insurer.

According to the DFC, the facility will insure losses of up to about $20 billion on a rolling basis and will initially focus on hull and machinery and cargo coverage.

Ben Black, chief executive of the DFC, said the initiative was designed to restore market confidence in shipping routes that have been disrupted by attacks on vessels in the region.

“DFC is pleased to partner with Chubb, one of the world’s leading insurance companies, to help get energy and trade flowing again through the Strait of Hormuz,” Mr Black said in a statement. “DFC’s Maritime Reinsurance plan combines Chubb’s premier underwriting expertise with the financial commitment of the US Government.”

“With today’s announcement, we are one step closer to restoring market confidence and resuming energy and commercial trade disrupted by the conflict with Iran,” he added.

Evan Greenberg, chairman and chief executive of Chubb, said insurance coverage was critical for shipping companies considering whether to return to the region.

“Chubb is proud to lead and manage this programme in partnership with the US Government and the [DFC],” Mr Greenberg said.

“The commerce passing through the Strait of Hormuz plays a vital role in the global economy, and providing vessels with insurance protection is essential for resuming trade flows.”

Last week, Donald Trump said the DFC will “provide, at a very reasonable price, political risk insurance and guarantees” for the financial security of all maritime trade through the Gulf.

The Strait of Hormuz is one of the world’s most important energy chokepoints, with roughly a fifth of global oil supply normally passing through the waterway.

Insurance markets have been quickly adjusting to more geopolitical risk. London’s marine insurance market has expanded the Gulf area designated as high-risk for war-related perils as the conflict escalates.

Analysts warn of major potential exposure for insurers. Moody’s has estimated marine insurers could face losses of as much as $40 billion if disruption to shipping in the region intensifies, according to reports in industry media.

At the same time, brokers say the situation is already forcing insurers and reinsurers to reassess their pricing. In fact, in a recent webinar, broker Aon said it is seeing risk “repriced in real time” as the Middle East conflict cuts across marine, political risk and other segments, according to reports.

The US Government programme aims to stabilise coverage and encourage shipowners and cargo operators to resume trade through the Gulf despite the conflict.