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IFC signs $3.5bn credit insurance policy with 13 global insurers

2nd October 2023 - Author: Saumya Jain

International Finance Corporation (IFC), a global development institution focused on the private sector in emerging markets, has signed a $3.5 billion credit insurance policy with 13 global insurance companies under its Managed Co-Lending Portfolio Program (MCPP).

TravelThis is a milestone that will support economic activity and foster development in emerging markets.

MCPP Financial Institutions III mobilizes the risk capacity of insurers to support more than $7 billion of new IFC medium and long-term lending to commercial banks and non-bank financial institutions over the next six years.

The program will increase access to finance for micro, small and medium enterprises, including women-owned businesses, as well as firms addressing climate change.

MCPP Financial Institutions III is IFC’s largest-ever mobilization in a single agreement, that will further the insurance industry’s risk-bearing capacity to increase private capital deployment and enable billions of dollars of additional development finance to support economic growth, job creation, and poverty reduction.

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John Gandolfo, IFC Vice President and Treasurer, Treasury & Mobilization, commented, “Insurance is not just about managing risks. It is also about underwriting human potential and development in emerging economies. This new facility demonstrates the opportunity for leading insurers and development finance institutions to work together to solve the world’s most urgent development challenges.”

MCPP Financial Institutions III has garnered participation from Liberty Specialty Markets, Munich Re, the Tokio Marine Group, AXA XL, Everest, and Aspen. The Hartford, Swiss Re, AXIS Capital, HDI Global Specialty, Allianz Trade, Sompo International, and SCOR are also joining the program for the first time.

Veronica Scotti, Chairperson of Swiss Re Public Sector Solutions, added, “Mobilization of private capital is key to scale the impact of development finance, but not easy to achieve. IFC has successfully managed this through its MCPP FIG III program, whose record volume is testament to IFC’s scaling capability. Swiss Re is thrilled to support this facility and thanks IFC for its trust.”

Mike Karmilowicz, President and Chief Executive Officer of Everest’s primary Insurance Division, said, “The MCPP is a great example of IFC’s proven ability to mobilize private capital by harnessing the strong balance sheets of global insurance companies to address critical development challenges in emerging markets. Everest Insurance® is proud to partner with IFC to reduce poverty and promote sustainable development around the world.”

MCPP Financial Institutions III helps insurers expand insurance coverage to unique developmental transactions in markets and with clients to deliver positive social, economic, and environmental impact. Connecting the insurers to IFC’s diversified pipeline of financial institution lending, which will be 100% aligned with the Paris Climate Agreement by 2025.

The new program will increase the total capacity raised under the MCPP, IFC’s portfolio syndications platform, to over $16 billion which will help support more than 260 IFC clients across 63 countries.

Thomas Lallinger, Head of Financial Risks, Munich Re, commented, “We are very keen to grow our partnership with the world’s leading development institution by participating in the MCPP for the third time. The program creates a win-win situation for both our enterprises: IFC benefits from the strong insurance capacity of Munich Re to mobilize more capital for their mission; Munich Re profits from IFC’s excellence in loan origination and credit risk management in emerging markets.”

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