IFC signed a $3.5 billion credit insurance policy with 13 global insurance companies under its Managed Co-Lending Portfolio Program (MCPP), a milestone that will support economic activity and foster development in emerging markets.
The program, MCPP Financial Institutions III, mobilizes the risk capacity of leading 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. It will unlock 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.
“Insurance is not just about managing risks. It is also about underwriting human potential and development in emerging economies,” said John Gandolfo, IFC Vice President and Treasurer, Treasury & Mobilization. “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 the participation of a consortium of prominent insurers, including continuing participants 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 joining the program for the first time.
“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,” said Veronica Scotti, Chairperson of Swiss Re Public Sector Solutions. “Swiss Re is thrilled to support this facility and thanks IFC for its trust.”
“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,” said Mike Karmilowicz, President and Chief Executive Officer of Everest’s primary Insurance Division. “Everest Insurance® is proud to partner with IFC to reduce poverty and promote sustainable development around the world.”
“We are very keen to grow our partnership with the world’s leading development institution by participating in the MCPP for the third time”, said Thomas Lallinger, Head of Financial Risks, Munich Re.
“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.”
MCPP Financial Institutions III enables insurers to expand insurance coverage to unique developmental transactions in markets—and with clients—that deliver positive social, economic, and environmental impact. It connects insurers to IFC’s diversified pipeline of financial institution lending, which will be 100 percent 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. To date, MCPP has supported more than 260 IFC clients across 63 countries.
