Munich Re has entered into a $500 million risk sharing framework agreement with FMO, the Dutch entrepreneurial development bank, to help promote private sector insurance growth in developing countries.
The deal, which enables Munich Re to participate in FMO transactions over the next three years, will help maximise funds towards developing countries in the Financial Institutions, Energy and Agribusiness sectors.
By creating an efficient way of credit risk underwriting via portfolio solutions, the parties also hope that the agreement will serve as a blueprint for further public-private partnerships.
“The risk participation program with FMO creates a win-win situation for both our enterprises,” explained Doris Höpke, member of Munich Re’s Board of Management.
“FMO benefits from the strong insurance capacity of Munich Re to mobilize more capital for their mission, Munich Re profits from FMO’s excellence in loan origination and credit risk management in emerging markets,” she said.
“The partnership allows us to open up new markets for our business, while supporting FMO in their mission to foster private sector growth in developing countries.”
Linda Broekhuizen, Chief Investment Officer at FMO, also commented: “We welcome the trend where we see an increasing amount of DFI’s and Multilaterals setting up arrangements with reputable insurance companies to bolster impact.”
“I’m proud to see insurance giants like Munich Re recognising the value of supporting FMO’s lending operations in emerging markets via our unique Risk Sharing Framework Agreement,” Broekhuizen continued.
“We are excited to partner up with Munich Re as we see significant scope for a further step up in impact investment in the coming years. I would like to thank them for their commitment and trust in FMO.”
With a committed portfolio of €9.7 billion spanning over 85 countries, FMO is one of the larger bilateral private sector developments banks globally.
It aims to supports sustainable private sector growth in developing countries and emerging markets by investing in ambitious projects and entrepreneurs.
