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EXIM Bank Announces Landmark Risk-Sharing Program With Private-Sector Reinsurers

Thursday, March 29, 2018

(Ex-Im Bank)  Innovative risk-sharing program fulfills EXIM’s charter by working with the private sector to minimize risk of losses and protect U.S. taxpayers

Washington, D.C. – The Export-Import Bank of the United States (EXIM) announced the launch of a groundbreaking reinsurance program that works with the private sector to share risk and provide an additional $1 billion in loss coverage for a significant portion of EXIM’s existing portfolio of large commercial aircraft financing transactions.

EXIM’s historic program is the largest public-private risk-sharing arrangement for a U.S. government credit agency. This transaction represents the maximum allowable coverage permitted under EXIM’s charter and fulfills its 2015 congressional reauthorization mandate to engage in risk sharing with the private sector to minimize the bank’s and U.S. taxpayers’ liability for potential future losses.

“We are excited to announce this historic arrangement with the private sector that protects EXIM Bank and safeguards U.S. taxpayers’ interests without requiring additional funding,” said Executive Vice President and Chief Operating Officer Jeffrey Goettman, who is serving as EXIM’s acting head of agency. “EXIM is committed to a path of financial innovation and risk-sharing with the private sector. This landmark deal is a stepping stone to a more creative use of the private markets in global trade finance for EXIM and assists in accomplishing our mission to support U.S. exports and American jobs.”

EXIM worked with Aon Benfield, the global reinsurance intermediary of Aon plc, to complete this $1 billion reinsurance program that was led by XL Catlin, Liberty Specialty Markets and Everest, among a group of 10 reinsurers. The program was funded by the fees generated by the original commercial aircraft transactions and will not cost U.S. taxpayers additional funds.

Aon Benfield CEO Eric Andersen said, “Aon Benfield’s work with EXIM Bank is another fantastic example of how the re/insurance industry can assist public entities in the United States to de-risk their balance sheets and remove potential volatility, to the benefit of the government and taxpayers. Our firm is committed to developing solutions in this space that utilize high-quality capital and provide diversifying growth opportunities for re/insurers.”

Aon plc is a leading global professional services firm providing a broad range of risk, retirement and health solutions. Aon operates in 120 countries to empower results for clients by using proprietary data and analytics to deliver insights that reduce volatility and improve performance.