The Council of Ministers approved the establishment of the Saudi Pool for Insuring War Risks for Cargo and Vessels, a step representing a specialized national mechanism that strengthens the ability of the insurance market to address marine risks and supports the continuity of trade and supply chains through a public-private partnership.

His Excellency the Minister of Finance, Mohammed bin Abdullah Al-Jadaan, noted that the pool enhances the insurance market’s technical readiness and expands its capacity to provide related coverage, in accordance with the frameworks and regulations approved by the Insurance Authority. This supports the resilience of the national economy and the Kingdom’s competitiveness as a global logistics hub.

The Saudi Reinsurance Company (Saudi Re) is leading the pool’s arrangements under the Authority’s supervision and with the participation of national insurance companies.

Discussing the decision’s role in strengthening supply-chain stability and consolidating the Kingdom’s position as a global logistics hub, students from Al Yamamah University examined its dimensions and implications for the financial and economic sectors as follows:

Reducing the Effects of Crises and Supporting Investor Confidence

Student “Jumana Alshahri” @Jumana Alshehri began the analysis by saying: “I believe the decision will directly help reduce the impact of geopolitical crises on companies, particularly those in energy and petrochemicals, by facilitating the continuation of shipping and exports and reducing the risk of higher insurance costs. It will also increase the retention of premiums by the insurance sector within the Kingdom and enhance the readiness of local companies.

“In the long term, stable supply chains and the availability of national insurance coverage will strengthen investor confidence and support the Kingdom’s appeal as a logistics hub.”

Reducing External Dependence and Protecting Supply Chains

Student “Albatool Bedairi” @Albatool Bedairi explained the importance of independent insurance coverage, saying: “The availability of national insurance coverage reduces the Kingdom’s reliance on external coverage during crises and helps protect and maintain supply chains and trade.

“This strengthens the Kingdom’s reliability as a logistics hub and gives foreign investors greater confidence that their businesses and the movement of their goods can continue even under exceptional circumstances, supporting the Kingdom’s investment appeal.”

Strategic Dimensions and the Foundations of the Insurance Pool

Student “Ghada Alsarheed” @Ghada Alsarheed offered the following perspective: “The geopolitical landscape is changing, while our trade and investments remain secure. Through a strategic step led by the Saudi Reinsurance Company (Saudi Re) in partnership with the local insurance sector, we are launching the national insurance pool for war risks—to strengthen control over supply chains, increase premium retention within our national economy, and provide a secure investment environment that reinforces our economic sovereignty and supports the aspirations of Saudi Vision 2030.”

She added the following regarding its components and pillars:

  • Shipment Protection: Protection for cargo transported by sea, land, and air; vessel structures; and operators’ liabilities.
  • Continuity of Navigation: Maintaining navigation to avoid disrupting trade and limit the withdrawal of international reinsurers.
  • Supply-Chain Protection: Protecting supply chains to ensure the flow of goods to factories and markets and prevent price increases for consumers.
  • Sovereignty and Growth: Retaining premiums in the local market and supporting the National Transport and Logistics Strategy to enhance foreign-investment appeal.
  • Hybrid Coverage: Adopting a hybrid coverage model by pooling local capacity for the initial layers of risk, supported by sovereign guarantees for extreme catastrophic events, to provide the highest possible level of confidence for global shipping lines at the lowest possible cost.

Limiting Cost Volatility and Sending Reassuring Signals

Student “Faiz Alhaj” @Faiz Alhaj highlighted price stability, saying: “I believe that establishing a national insurance pool is a powerful driver of the economy, as it prevents fluctuations in shipping costs resulting from geopolitical disruptions.

“Its existence also sends a strong reassuring message to foreign investors that the Kingdom’s business environment has protective safeguards that shield their investments and supply chains even under complex circumstances.”

Profit Stability and Building Local Expertise

Student @ثناء الشايب commented on limiting cost increases, saying: “I consider the decision an important step, especially amid current tensions and their impact on shipping and trade. The issue is not only the possibility of damage to vessels or cargo; higher insurance prices may also increase companies’ costs and affect their profits, particularly those of energy and petrochemical companies that rely heavily on exports.

“In my view, local insurance coverage gives companies greater security and stability during crises and reduces their reliance on foreign insurers. At the same time, it may benefit the Saudi insurance sector itself by giving local companies greater experience in handling this type of risk.

“Ultimately, I believe the decision serves more than one dimension, benefiting both companies and the insurance sector.”

Sustainability of the Energy Sector and Strengthening the Insurance Market

Student “Noof Alanazi” @Noof Alanazi added: “In my view, this model helps the energy and petrochemical sectors cope with fluctuations in insurance prices and protect the movement of exports and imports, thereby supporting companies’ financial stability.

“It also strengthens the local insurance sector by keeping premiums in the market and developing insurers’ capabilities, while giving investors and shipping companies greater confidence in the Kingdom’s logistics environment.”

Managing Cash Flows and the Cost Factor

Student “Arwa Alhuwaiti” @Arwa Alhuwaiti emphasized the importance of incorporating insurance into budgets, saying: “I believe war-risk insurance may mitigate the financial impact of geopolitical tensions on energy and petrochemical companies, particularly as shipping and transport risks rise.

“The availability of insurance coverage helps companies reduce potential losses and maintain stable cash flows. At the same time, the cost of insurance itself is an important factor that must be included in the cost structure.”

Timeliness and Reducing Dependency Risks

Student “Dina Alarjani” @Dina Alarjani highlighted the importance of independence, saying: “In my opinion, the decision comes at the right time, because relying on external entities for insurance during crises can itself be a risk. The existence of a Saudi insurance pool gives companies greater security and makes the Kingdom better able to deal with any tensions that may affect trade. In the long term, I believe it could have a positive impact on investor confidence and market stability.”

Supporting the Financial Performance of Vital Sectors

Student “Rimas Almashali” @Rimas Almashali pointed to operational continuity, saying: “I believe the pool gives energy and petrochemical companies a greater ability to continue exporting and importing during crises, because the availability of insurance coverage reduces the impact of higher shipping risks on costs and cash flows. This could have a positive effect on the stability of companies’ financial performance.”

Protecting Assets and Retaining Premiums Domestically

Student “Mansour Al-Jaafari” sees the benefits of comprehensive coverage, saying: “I consider it an excellent step, especially amid current geopolitical crises. War-risk insurance protects energy and petrochemical companies from major losses, strengthens local insurers, and keeps premiums within the Saudi market. At the same time, it gives investors greater confidence and protects supply chains.”

Enhancing Logistics Competitiveness and Reducing External Dependence

Student “Ghadah Alwallan” @Ghadah Alwallan shared her view: “In my opinion, establishing the pool supports not only the insurance sector but also the Kingdom’s competitiveness as a logistics hub. National war-risk coverage reduces reliance on foreign insurers and gives investors and companies greater confidence in the continuity of supply chains, particularly during periods of geopolitical tension.”

Risk Pooling and Financial Stability

Student “Mohammed Almudbil” @Mohammed Almudbil drew attention to the technical mechanism, saying: “I believe the pool is based on risk pooling among insurance companies. This strengthens the local market’s ability to absorb war risks and provide coverage during crises.

“It may also help increase premium retention within the Saudi market and reduce exposure to fluctuations in global insurance markets.”

Protecting the Macroeconomy and Strengthening National Expertise

Student “Shahad Alkhamis” @Shahad Alkhamis analyzed the decision’s impact, saying: “In my view, establishing a national war-risk insurance pool is a step that goes beyond protecting companies to supporting the stability of the economy as a whole.

“It limits the impact of geopolitical crises on supply chains and trade flows, strengthens the retention of premiums and expertise by the local insurance sector, and enhances the reliability of the Kingdom’s investment and logistics environment.

“Accordingly, the presence of strong local insurance coverage could support business continuity and the long-term appeal of foreign investment.”

Sectoral Integration and Economic Sovereignty

Student “Fay Aldossari” @Fay Aldossari detailed the impact across several areas:

  • Petrochemicals and Energy: War-risk insurance protects shipments from direct losses during geopolitical tensions and stabilizes shipping and insurance costs, preserving companies’ profit stability and allowing exports to continue without interruption.
  • Local Insurance Sector: “Re”’s leadership of the insurance pool ensures that insurance funds and premiums remain within the Saudi market rather than flowing abroad, while raising the technical expertise and financial capacity of local companies.
  • Economic Sovereignty and Foreign Investment: National coverage gives the Kingdom independence in protecting supply chains without relying on external parties and provides a secure environment that encourages foreign investors to invest with confidence.

Protecting Profits and Reinforcing Logistics Independence

Student “Fahad Alruwaished” @Fahad Alruwaished expressed the decision’s economic importance, saying: “In my view, this step is a genuine shield for our economy because it ensures the continued shipment of petrochemicals and energy at reasonable costs during crises, without our companies’ profits being affected by high prices. This protects their profits and prevents inflation.

“In addition, insurance funds return to our national companies rather than flowing abroad, helping expand our domestic market. It also gives foreign investors reassurance that our shipping lines are insured and stable, demonstrating that the Kingdom is a confident global logistics hub that does not depend on external parties.”

Sustainable Transport and Logistics Services

Colleague “Lujain Algorashi” @Lujain Algorashi outlined the decision’s future implications, saying: “I believe war-risk insurance is an important step, particularly amid geopolitical tensions and shipping disruptions, because it helps energy and petrochemical companies reduce potential losses and ensure that export and import operations continue more steadily, which will affect their future financial performance. Establishing this insurance pool will also help keep a larger share of premiums within the Saudi market and give local insurers greater experience in managing this type of risk, supporting the sector’s growth and readiness.

“More broadly, the availability of national insurance coverage strengthens companies’ and investors’ confidence in the Kingdom’s ability to manage risks and protect supply chains. This supports the transport and logistics sector and makes the Kingdom’s investment environment more stable and attractive.”

Comprehensive Perspectives on Market Stability and Sovereignty

Student “Amal Mansi” @Amal Mansi highlighted the decision’s key dimensions through the following analysis:

  • Impact of Geopolitical Crises (Energy and Petrochemicals): It ensures stable financial performance for companies by providing specific coverage at a fixed cost against war risks, protecting exports and imports from spikes in shipping prices or interruptions.
  • Growth of the Local Insurance Sector: It strengthens the Saudi market’s financial and technical capacity under the leadership of (Re) and keeps substantial insurance premiums within the national economy instead of transferring them to international reinsurers.
  • Economic Sovereignty and Logistics Services: It strengthens the Kingdom’s position as a safe global logistics hub by ensuring the continued flow of supply chains even during crises, providing a stable and attractive environment for foreign investors.

Freedom from Global Insurance Market Volatility

Student “Mohammad Alghaihab” @Mohammad Alghaihab highlighted the aspect of strategic independence, saying: “I believe establishing the pool is an important step because the risk during crises is not limited to vessels being halted; it also extends to higher insurance costs or the absence of coverage altogether.

“The availability of local coverage reduces Saudi trade’s reliance on foreign insurers. More importantly, it gives companies greater ability to continue shipping operations instead of leaving their decisions hostage to changes in global insurers’ appetite for risk.”

Technical Overview and Explanation of the Decision’s Dimensions

Expert Abdulaziz Khrais commented, presenting the pool’s details and regulatory foundations: “The Saudi Marine Insurance Pool represents a specialized national mechanism that strengthens the insurance market’s ability to address marine risks, supports the continuity of trade and supply chains through a public-private partnership, and operates under the leadership of the Saudi Reinsurance Company (Saudi Re).”

The pool’s main features are outlined below:

  • Nature of the Pool: A national initiative established under a cooperative arrangement combining government support with the capabilities of Saudi private-sector insurers to provide an insurance solution for marine insurance risks involving cargo and vessels and to sustain coverage under conditions of elevated risk.
  • Objectives of the Pool: Supporting the Kingdom’s competitiveness as a global logistics hub, enhancing the resilience of the Saudi marine insurance market, ensuring the continued availability of insurance coverage when risk levels rise, sustaining economic activity, and maintaining Saudi trade connected to global markets.
  • Target Groups: The pool serves policyholders through participating companies, including owners and operators of ships and marine vessels, importers and exporters, and shipping companies, logistics providers, and national institutions that rely on maritime supply chains.

The Step’s Impact on Sectors

In an analytical reading, financial and economic analyst “Hamad Alsaeed” @Hamad Alsaeed adds: The importance of the Council of Ministers’ approval to establish the Saudi war-risk insurance pool is not limited to developing the insurance market; it also extends to protecting trade during crises. Indicative war-risk quotes in the Gulf reached around 3% of a vessel’s value in March 2026, compared with 0.25% before the escalation.

For insurance, the pool allows capacity to be aggregated locally instead of companies receiving decisions from international reinsurers individually. Petrochemicals are particularly sensitive because their exports depart from Jubail behind the Strait of Hormuz and from Yanbu on the Red Sea; consequently, continuity of coverage becomes a prerequisite for regular shipping and financing. Logistically, the pool supports the Kingdom’s target of reaching the top ten countries in the Logistics Performance Index, up from 38th place in the 2023 edition.

Leading property and casualty insurers appear best positioned to benefit from growth in marine insurance premiums. However, the impact on their profitability will depend on their share of retained risk. The picture is expected to become clearer once the pool’s structure and participating entities are disclosed.

The insurance pool