Liberty Mutual Forms $1B Risk-Sharing Deal with OPIC, Expanding Public Sector Portfolio


Liberty Mutual Insurance has formed a $1 billion risk-sharing agreement with the Overseas Private Investment Corp. (OPIC), the U.S. government’s development finance institution, which furthers the company’s diversification strategy in a market when organic growth is hard to find.
Edith Quintrell, Director of Development, Financial Risk Solutions, Liberty Mutual, Edith Quintrell underlined the strategy of Liberty Mutual to expand its public sector business, diversify its credit insurance portfolio and reach new markets.
Under the OPIC agreement, Liberty Mutual has provided credit insurance on a 50/50 quota share basis for loans to financial institutions in emerging markets.
Liberty Mutual’s maximum exposure was $ 25 million per credit, while the $ 1 billion $ facility from the OPIC to $ 500 million, which matched the $ 500 million loan, was $ 25 million per loan, said Quintrell in an interview with insurance.

He stated that Liberty included any additional limits regarding how much money can be borrowed in any single asset, such as any single country or region, in any single asset, It helps us manage the concentration in the portfolio. O

Quintrell said Liberty has authorized OPIC to distribute and extend credit.

Ik We spent a lot of time in the OPIC to make a case. We reviewed their procedures, policies and looked closely at their records. As a result, we were very comfortable with them. “

How does the facility work? Quintrell said, for example, that OPIC has lent to a Latin American commercial bank, for example, that Liberty shares the risk of credit default with the OPIC. IC If the credit is not repaid or if there is a default, the OPIC may turn to Liberty for some of this loss. In the context of these loans, an insurance must be paid. ”
Quintrell said Liberty Mutual first approached OPIC last year: önce A few years ago, we have a strategy to try to do more with public sector organizations. Quin

”The OPIC was very interested in our proposal, which was consistent with the task of mobilizing more private capital,“ he said. ”As a result, they can allow them to lend more money than they can now and have a greater developmental effect.“

When the deal with Liberty was first announced in 2018, OPIC said it was the first deal with a US insurance company to share credit risk over a global portfolio of OPIC-based loans to commercial banks and other non-bank financial resources. institutions.

In connection with the launch of the OPIC-Liberty Mutual joint investment platform, $ 235 million of funding is being distributed to many financial institutions operating in Central and South America and Africa, highlighting the strong interest of OPIC in achieving the targeted goals quickly. OPIC said in the statement.

OPIC has been designed to advance these loans with US government development financing targets through investments that gelişmekte drive economic growth, build critical infrastructure and empower women in developing countries OP. The agency said funds will benefit hundreds of women and small and medium-sized enterprises (SMEs) in developing countries.

“This billion-dollar platform is an important milestone in creating innovative approaches to mobilize private sector capital to meet global challenges,” said OPIC vice president David Bohigian.

Sp Liberty Mutual is committed to providing effective credit and political risk insurance products all over the world, ual said Peter Sprent, President of Liberty Private Markets Financial Risk Solutions. Yaklaş Partnership with public institutions such as [OPIC] is an important way to approach this market. We take advantage of OPIC’s high standards of care, including environmental and labor rights protection and credit monitoring.

In 2017, Liberty is part of the International Finance Corp., which is part of the World Bank Group. (IFC). Munich Re also attended this facility.

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