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RESEARCH AND BRIEFINGS

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Using Credit Insurance to Manage Project Finance Risk

 


Project finance lenders are increasingly turning to unfunded non-payment insurance to cover borrower default risk, providing substantial risk syndication, credit, and portfolio management benefits.

In this presentation, Stephen Kay, Managing Director within Marsh’s Credit Specialties practice, gives an overview of the main features of non-payment insurance, an outline of the key benefits for banks of using this type of cover, and the market’s main insurance players.

Stephen explains how the market for long-tenor, non-recourse credit risk insurance has significantly deepened in recent years, and how non-payment insurance compares with other credit risk distribution options that are available to banks. He explores how banks can increase their competitive position by working with insurers as "silent partners", and how unfunded non-payment insurance can reduce credit risk and risk-weighted assets, and help manage banks’ regulatory capital.

This presentation was given at the International Project Finance Association “Managing Project Finance Risk with Credit Insurance” event in London on 14 September 2017, hosted by Marsh.