According to reports, the agreement involves collaboration with 13 leading global insurance companies as part of the Managed Co-Lending Portfolio Program (MCPP).
The milestone promises to bolster economic activity and encourage development within emerging markets. The MCPP Financial Institutions III initiative, operating under the umbrella of this credit insurance policy, aims to mobilise the risk capacity of insurers. This mobilisation is set to underpin over US$7 billion in new IFC medium and long-term lending. The intended beneficiaries of this program include commercial banks and non-bank financial institutions, and the initiative is slated to span the next six years.
One of the key objectives of the programme is to enhance access to finance, particularly targeting micro, small, and medium enterprises, with a focus on women-owned businesses. Additionally, the initiative addresses the critical issue of climate change by supporting firms dedicated to environmental sustainability.
MCPP Financial Institutions III also marks IFC’s most substantial mobilisation effort within a single agreement. The overarching goal is to fortify the risk-bearing capacity of the insurance industry. This strategic move is poised to facilitate increased private capital deployment, opening avenues for billions of dollars in additional development finance. Ultimately, this initiative is expected to play a pivotal role in supporting economic growth, job creation, and poverty reduction on a global scale.
Speaking about the agreement, John Gandolfo, IFC Vice President and Treasurer, Treasury & Mobilisation, 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.”
The participation in MCPP Financial Institutions III is robust, with esteemed contributions from key players in the global insurance landscape. Notable participants include Liberty Specialty Markets, Munich Re, the Tokio Marine Group, AXA XL, Everest, and Aspen. Additionally, The Hartford, Swiss Re, AXIS Capital, HDI Global Specialty, Allianz Trade, Sompo International, and SCOR are making their inaugural entry into the program, marking a significant expansion of collaborative efforts within the Managed Co-Lending Portfolio Program.
Veronica Scotti, Chairperson of Swiss Re Public Sector Solutions, commented, “Mobilisation 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.”
“The MCPP is a great example of IFC’s proven ability to mobilise 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,” said Mike Karmilowicz, President and Chief Executive Officer of Everest’s primary Insurance Division.
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 mobilise more capital for their mission; Munich Re profits from IFC’s excellence in loan origination and credit risk management in emerging markets.”
