Berkshire's Ajit Jain on Insuring Ships in the Strait of Hormuz: 'The Short Answer Is It Depends on the Price'

Insuring ships through a war zone is a question of price, according to one of the world's most respected insurance executives. At Berkshire Hathaway's annual meeting in 2026, Ajit Jain, who runs the company's insurance operations, was asked when Berkshire could insure ships crossing the Strait of Hormuz. His reply was that the short answer is that it depends on the price. The remark was reported by Claims Journal on May 5, 2026, and by Carrier Management two days earlier. This article summarises that report and adds details of the government-backed programme from a later Insurance Business report. An earlier version of this article described the programme and its partners as part of Jain's remarks. The Claims Journal report does not mention the programme's size or its partners, so those details are now attributed to the later report.

Here is what Jain said, according to the report. He drew a comparison with Warren Buffett's answer on pandemic coverage at the 2020 meeting, when the topic was a different risk. He said demand for insurance for ships stalled by the war with Iran is high, but that there is enough capacity in the insurance world that would like to write that risk. He attributed the capacity to insurers with surplus capital looking for places to deploy it. In other words, the constraint is not a lack of willing insurers. It is that the terms have to make sense.

Berkshire's own position is limited. Jain said the company has taken a small participation in a programme set up to insure ships in the Strait, but the article gives no size for that stake. Berkshire has not written any deals yet. He said the company is still fine-tuning the underwriting terms, including assurances that the US Navy will escort the ships. Berkshire has set a price at which it would be comfortable underwriting the risk, but, in his words, nothing has happened as yet. The article does not state the price.

What is the programme? A later article by Insurance Business, published on June 28, 2026, gives more detail on the war-risk market. It says that the conflict began on February 28, 2026, and that in early March the US International Development Finance Corporation launched a $20 billion maritime reinsurance facility. On April 3 the facility was expanded to $40 billion. Chubb was the lead underwriter, and other participants were Travelers, Liberty Mutual, Berkshire Hathaway, AIG, Starr and CNA. The US government assumes half of the risk, or $20 billion, and the seven participating insurers back the other half. That structure explains Jain's comment about price and escorts: a government backstop reduces the risk for private insurers, but they still want assurance about the conditions of each voyage.

How high have war-risk premiums gone? The Insurance Business article says the pre-conflict war-risk rate for Hormuz transits was about 0.25% of a ship's hull value. At the peak, it was as high as 10%, an increase of close to 4,000%, according to Dylan Saunders-Mortimer of Marsh. Current estimates at the time of writing were 3% to 8%, which equals $3 million to $8 million for a single large tanker transit. The Joint War Committee of the Lloyd's Market Association expanded its high-risk designation to cover the entire Persian Gulf. A ceasefire signed earlier in June was undermined by renewed hostilities on June 27, according to the article. Because conditions are changing, readers should check current news for the latest status.

Other voices in that article put Jain's remark in context. Rahul Kapoor of S&P Global Energy said transits are being avoided because of the safety of the crew, cargo and vessel and not insurance alone. Neeraj Gupta of Policybazaar UAE said underwriters need two to four weeks of confirmed de-escalation before lower risk feeds into pricing, and that a full return to pre-conflict rates could take several months. Rishi Thapar of Lockton said the market is stabilising but not resetting. The article says traffic through the Strait had fallen about 95% from a pre-conflict average of 178 ships per day, citing Khaleej Times.

What does this say about insurance more broadly? War risk is usually excluded from standard policies and is bought separately, at short notice, for specific voyages. It is a classic case in which private insurers will cover a risk only at a price that reflects extreme uncertainty. Government-backed facilities, like the one described, have precedents in terrorism and political risk insurance, where governments share extreme losses. The Hormuz case is a test of how effective such facilities are at restoring trade when ship owners and crews are concerned about physical safety.

For readers outside the industry, the practical effect is on shipping costs and energy supply chains. Higher insurance costs are passed on in freight rates and can ultimately affect prices, although the Insurance Business article says transits are being limited by safety as much as by insurance. Jain's remark is a reminder that capital exists to take the risk if the price is right, and that the price is set by information about the likelihood of attack, which changes with each event.