IFC, a member of the World Bank Group, has partnered with six global insurance companies to mobilize $2 billion in credit capacity under the Managed Co-Lending Portfolio Program (MCPP). The initiative will allow IFC to increase its medium- and long-term lending to commercial banks and non-bank financial institutions in emerging markets by up to $5 billion.
The program demonstrates the potential of a new partnership model between development finance institutions and global insurance markets, where private sector risk capacity can support and expand development finance activities. AXA XL, Aspen Insurance, Everest Insurance®, Liberty Specialty Markets, Munich Re and Tokio Marine HCC are giving IFC the ability to significantly scale up its lending operations to emerging market financial institutions over the next four years.
“Financial Institutions are vital to increasing investment in emerging markets,” said IFC CEO Philippe Le Houerou. “Expanding partnerships with some of the world’s largest insurance companies will increase IFC’s firepower to deliver sustainable financial solutions to its bank and non-bank financial institutions clients, increasing access to finance for micro, small, and medium enterprises, including many women-owned businesses.”
Liberty Specialty Markets, Munich Re and AXA are existing participants in IFC’s MCPP. The new facility brings the total funds raised under the MCPP platform to over $10 billion, expands the universe of private sector partners and broadens the types of emerging-market debt that can be leveraged through the program.
Leveraging insurers who understand and complement IFC’s emerging market development strategy—including investing in some of the world’s toughest markets—will multiply the impact IFC and other development organizations can have on the ground. Considering the combined balance sheet strength of large insurers, there is scope to replicate the program on a larger scale with other insurance companies or mobilization partners.
“Aspen are extremely proud to partner with IFC, in delivering such an exciting and innovative solution for mobilizing credit in emerging markets,” said Henry MacHale, Co-Chief Underwriting Officer of Aspen Insurance UK. “By combining IFC’s local market knowledge and expertise along with private insurance market capacity, we are able to push forward together with IFC’s aims of reducing poverty, increasing shared prosperity and promoting sustainable development.”
“The partnership between the private insurance market and multilateral development banks has grown significantly over the last few years and has proven to be a successful and innovative way to expand their development activities,” said Dan Riordan, President and Chief Underwriting Officer for Political Risk, Credit & Bond at AXA XL. “We are committed to partnering with IFC to support their efforts to mobilize needed capital to Financial Institutions in the emerging markets.”
“Everest is proud to participate in this program that not only allows the IFC to increase their lending operations, but also directly addresses the critical development challenges in emerging markets,” said Jim Thomas, Head of Credit and Political Risk at Everest Insurance®. “We’re proud to harness the strength of the Everest balance sheet and the experience and deep industry knowledge of our Credit and Political Risk underwriting team to support the IFC in this endeavor.”
“We are very pleased to partner with IFC again to mobilize financing for developing countries,” said Peter Sprent, Head of Financial Risk Solutions at Liberty Specialty Markets. “This new MCPP program highlights how the private insurance market can use its capacity and expertise to increase IFC’s impact and help others around the world prosper. By sharing risks with IFC, we benefit from their global network and excellent track record.”
“This is another important milestone for Munich Re to foster the constructive relationship with IFC and the World Bank Group,” said Ansgar West, Global Head of Financial & Entrepreneurial Risk Solutions at Munich Re. “The collaboration with IFC to mobilize debt capital in developing countries reflects Munich Re’s ambition to open up for new markets and sectors that will benefit our business while supporting IFC in their global mission to fight poverty and to generate growth in developing countries.”
“We are delighted to be able to strengthen our ongoing partnership with IFC over the long term through our participation in its MCPP,” said Jerome Swinscoe, Chief Underwriting Officer of Tokio Marine HCC – Credit Group. “At a time of great uncertainty in global trade and credit markets, we are confident that IFC’s tested ability to maneuver through crises will benefit all stakeholders by making funding available where it’s needed the most. By leveraging the role of IFC as a prominent development institution, we can help achieve a positive impact in all the markets it serves by expanding access to financing for underserved segments of the population, such as women-owned MSMEs, by promoting market-leading social and environmental undertakings, and by fostering good governance initiatives. These efforts are well aligned with Tokio Marine’s ‘Good Company’ vision.”
