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Region's development bank works with 5 global insurers in risk transfer programme

The Asian Development Bank (ADB) has signed an agreement with five leading global insurers which will mobilize up to $1bn of financing capacity to support lending to financial institutions (FIs) in Asia and the Pacific.

The Master Framework Programme for Financial Institutions will allow ADB to increase its lending to both commercial banks and non-bank financial institutions in the region through the use of credit insurance.

ADB has signed an initial three-year partnership with Tokio Marine Group (Tokio Marine & Nichido Fire Insurance, and Tokio Marine HCC), AXA XL, Chubb, Liberty Specialty Markets, and Allianz Trade.

The highly rated insurers participating in the programme will cover the risk of nonpayment on a portion of ADB’s loans to financial institutions. This will allow ADB to transfer credit risk from its portfolio to insurers’ balance sheets, freeing up ADB’s capital, managing its exposures, and increasing its lending capacity.

“ADB has been a pioneer among multilateral development banks in partnering with private insurance companies to expand lending operations through the use of credit insurance,” said Head of ADB’s Guarantees and Syndications Unit, Mr. Bart Raemaekers. “The relationships we’ve built with insurers have allowed us to mobilise this additional source of private capital as co-financing to help meet our client’s needs.”

Tokio Marine HCC – Credit Group president Mr. Jerome Swinscoe said, “Our partnership with ADB has grown through the years. This landmark programme has come at an opportune time when we can all contribute to the economic recovery that Asia needs.”

The programme streamlines the underwriting and approval process for risk transfers and will allow ADB to more efficiently mobilize co-financing capacity. ADB’s loans to the financial sector have included support for operational priorities such as micro, small, and medium-sized enterprises, gender equality, and efforts to address climate change.



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