Lloyd's of London faces a direct challenge from Donald Trump as the US government launches a $20bn reinsurance program to compete in maritime war insurance. The centuries-old market, which has insured ships through wars and storms since the 17th century, is now confronting US-backed policies for vessels transiting the Strait of Hormuz.

Following US and Israeli strikes on Iran, Lloyd's underwriters cancelled existing policies for ships passing through the strategic waterway. An $80mn oil tanker now faces premiums of 3-7% of its value, up from less than 0.5% before hostilities. While Lloyd's insists the market remains open, ship owners have been reluctant to risk vessels in the volatile region.

Trump has promised to provide insurance at "a very reasonable price" through the International Development Finance Corporation, backing American insurers like Chubb. US Navy-escorted ships may be required to take DFC-backed coverage, potentially costing about 1% of vessel value. This America First approach could prove formidable, combining official backing with superior maritime intelligence.