IFC, a Global Partner for Insurance Companies Creating Strategic Opportunities.

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Miles Willis
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1 IFC, a Global Partner for Insurance Companies Creating Strategic Opportunities February 2015

2 IFC: Part of the World Bank Group IBRD IDA IFC MIGA ICSID International Bank for Reconstruction and Development International Development Association International Finance Corporation Multilateral Investment and Guarantee Agency International Center for Settlement of Investment Disputes Loans to middleincome and credit-worthy low-income country governments Interest-free loans and grants to governments of poorest countries Solutions in private sector development Guarantees of private sector investment s noncommercial risks Conciliation and arbitration of investment disputes 2

3 IFC s Structure The Highlights Owned by 182 member countries IFC is the main driver of private sector development in the World Bank Group Collaborates with other members of the group, including the World Bank (IBRD and IDA), MIGA, and the International Centre for Settlement of Investment Disputes Global: Headquartered in Washington, D.C. Local: More than 100 offices worldwide in 98 countries 3

IFC in Latin America and the Caribbean Gulf of Mexico Mexico City Port-au-Prince Santo Domingo Kingston Guatemala City Tegucigalpa San Salvador Caribbean Sea

4 IFC in Latin America and the Caribbean Gulf of Mexico Mexico City Port-au-Prince Santo Domingo Kingston Guatemala City Tegucigalpa San Salvador Caribbean Sea Managua Port-of-Spain ATLANTIC OCEAN Bogota PACIFIC OCEAN Lima La Paz São Paulo Rio de Janeiro Buenos Aires IFC Hub Offices IFC Country Offices ATLANTIC OCEAN 4

5 IFC Insurance: Focus on Development Impact Risk insulation: Insurance enables businesses and asset buyers to take on more risk than they could individually, creating more businesses and jobs. Risk management: Formalize RM practices, leading to economic efficiency, stability and poverty reduction. Economic multiplier: Fund accumulation, especially tied for longer terms, enables insurers to deploy investments into the regional economy, thereby enhancing private enterprise and supporting economic development. Capital market development: Increased savings / funds accumulated by insurers, lead to improved capital markets. Increased social stability: Insurance assist in diversifying risks, leading to stability in unplanned disasters and potential social / financial consequences.

6 IFC s Insurance Investments 29 clients, US$1.2 billion total committed portfolio * Global Clients Committed Balance US$ 72 m # Clients 2 % Insurance Portfolio 6% Europe, Central Asia & Middle East Committed Balance US$ 247 m # Clients 4 % Insurance Portfolio 21% Latin America and the Caribbean Committed Balance US$ 602 m # Clients 12 % Insurance Portfolio 51% Asia and the Pacific Committed Balance US$ 175m # Clients 4 % Insurance Portfolio 15% Sub-Saharan Africa Committed Balance US$ 79 m # Clients 7 % Insurance Portfolio 7% * Including IFC AMC commitments, as of June 30, 2014.

7 Food security / Access to proper nourishment Credit insurance and weather-based insurance provide financial security to input providers against the risk of non-repayment: Securing repayment of loans given to farmers; harvests, used as collateral for the loans Better prices on the markets: often, all local farmers farming the same crop bring it to the market at the same time, creating oversupply and reduced market prices. Transport chains, financed by credit, protected by transport insurance, would improve speed and quality of products to markets. Warehouses, with warehouse receipts, could play an intermediary/storage function. Outreach services for better farming practices (AS supported) become economically more interesting. Insurance products to provide price/ market fluctuation cover? Government s strategic interest in food security requires Public-Private Partnerships Supply chain approach (seed, equipment, banks, insurers, retail) permit scaling up Use GIIF as platform; create risk pools, using/administrating public funding. Expand in collaboration with Agro, WBG, ILO, IFPRI, etc. 7

8 Alternative Delivery Model - Hedging of Weather Linked Loans Funded Program Agribusiness Loan Portfolio Technical Partner SWAP Agreement IFC US$ Loan incl. Weather Risk Local Partner Financial Institution Unfunded Program Agribusiness Loan Portfolio Technical Partner Premium Claims IFC Weather Risk Guarantee Local Partner Financial Institution

9 Crop insurance against typhoon and weather events in the Philippines Project: 2 year project to develop affordable insurance products for farmers against typhoon-related losses Partner/Clients: Local Insurance: One of the top local insurance companies Distribution: large micro-finance institution in the country (1.8 million clients) Goal: to extend credit to an additional 100,000 smallholder farmers, and insure 200,000 by project end IFC/WBG Role: Product Design: advisory services in the development and deployment of insurance products (both weather index and indemnity) to address typhoon-related risks faced by both lenders (insurance to protect agri-loan portfolio) and farmers; Capacity building for product administration: advisory services to partners (training) for the effective management and administration of the products within agri-lending operations Status: data gathering phase for product design this includes conducting focus group discussions (FGDs) across Philippines with farmers, and building 30-year gridded historical weather data set for Philippines.

IFC Operational Highlights

IFC Operational Highlights Dollars in millions, for the years ended June 30 2017 2016 2015 2014 2013 Long-Term Investment Commitments FOR IFC S OWN ACCOUNT $11,854 $11,117 $10,539 $ 9,967 $11,008 Number