Liberty Mutual Partners with OPIC on $1B Investment Program

Source: Reinsurance News | Published on November 16, 2018

Liberty Mutual net income Q1
Liberty Mutual Insurance has partnered with the Overseas Private Investment Corporation (OPIC), the U.S government’s development finance institution, on the launch of a $1 billion risk-sharing agreement to facilitate private sector investment in developing markets.
 
This partnership represents OPIC’s first agreement with a U.S owned insurance company to share credit risk across a global portfolio of new OPIC-originated loans to commercial banks and other non-bank financial institutions.
 
Liberty Mutual said the collaboration is also part of its larger strategic initiative to form long-term partnerships with international development institutions that bring diversification to its credit insurance portfolio and access to new markets.

“Liberty Mutual is fully committed to providing effective credit and political risk insurance products globally,” said Peter Sprent, Head of Financial Risk Solutions, Liberty Specialty Markets.

“Partnering with public agencies like the Overseas Private Investment Corporation, is an important way for us to approach this market,” Sprent continued. “We benefit from OPIC’s high standards of due diligence – including environmental and worker rights safeguards – and credit monitoring. We were able to demonstrate to OPIC our leadership in this space following agreements recently concluded with other development finance institutions.”

David Bohigian, Executive Vice President at OPIC, also commented: “Today’s launch of its first co-investing platform is an important day for OPIC and development finance. This billion dollar platform is a significant milestone in creating innovative approaches to catalyzing private sector capital to meet global challenges.

“Partnering with Liberty Mutual, a U.S. owned insurance company recognized as a global leader in providing risk solutions, demonstrates that working with OPIC balances risk and return while having a positive impact on the lives of the people who need it the most. Today’s announcement continues OPIC’s tradition of innovation and demonstrates the creativity and execution that forms the foundation of next year’s US International Development Finance Corporation.”

In conjunction with the launch of this co-investment platform, over $235 million of funding is being deployed to several financial institutions operating in Central & South America and Africa, providing benefits to hundreds of women-owned businesses and SMEs, OPIC said.

OPIC will originate, underwrite and monitor creditworthiness and developmental impact – including labour, human rights, social, gender, and environmental impact – throughout the life of the projects, while Liberty will take a significant risk interest in those loans that are part of the facility.