Lloyd’s, a leading marketplace for insurance and reinsurance, has announced a formal partnership with the Multilateral Investment Guarantee Agency (MIGA) to promote climate resilience.
This partnership builds on more than 25 years of collaboration between the two organisations, aiming to support sustainable development through the provision of investment guarantees, according to InsurTech Insights.
The renewed partnership comes with a strong focus on leveraging World Bank Group guarantees to promote climate resilience, including a significant $1.2bn guarantee from MIGA to Banco do Brasil S.A.
The loan will support local lending operations for micro, small, and medium farmers involved in no-till and other climate-smart agricultural practices, which provide benefits such as carbon sequestration and climate resilience. This initiative is backed by 15 reinsurance partners, with Lloyd’s market playing a crucial role.
Lloyd’s is renowned as a global insurance marketplace, offering services to individuals, companies, and nations seeking risk management solutions.
The company has a strong focus on facilitating insurance and reinsurance projects across the globe. MIGA, a member of the World Bank Group, provides political risk insurance and credit enhancement, helping to promote foreign direct investment in developing countries.
The collaboration between Lloyd’s and MIGA allows the latter to scale its investment guarantee capacity through reinsurance.
By working together, the two organisations enable investors to secure larger levels of coverage, which helps drive foreign investment into developing nations, ultimately benefiting host countries by enhancing economic growth and development.
One of the key initiatives under this partnership is MIGA’s role in managing the World Bank Group Guarantee Platform.
This platform is targeting an increase in annual guarantee issuance to $20bn by 2030, a goal that will heavily depend on continued collaboration with reinsurance partners, including Lloyd’s.
This partnership has already delivered tangible results.
In the last fiscal year, MIGA issued guarantees for 30 climate-related projects across 22 countries, contributing to climate change mitigation and adaptation efforts.
The formalisation of the partnership is expected to further strengthen these outcomes, especially in the context of global challenges such as poverty reduction, climate resilience, and sustainable economic growth.
Lloyd’s CEO, John Neal, expressed his enthusiasm for the partnership, saying: “Collaboration is the hallmark of the Lloyd’s market, and through our ongoing partnership with MIGA, the (re)insurance industry has facilitated projects around the world which are having a tangible impact on the local and national communities that need it most. By providing financial security for these loans, we can help to ensure that this work can continue for decades to come.”
MIGA Executive Vice President, Hiroshi Matano, emphasised the mutual benefits of the collaboration, stating, “MIGA’s long-running collaboration with the Lloyd’s marketplace has brought significant benefits to both investors and host countries. Investors have gained access to larger levels of coverage for projects in developing countries, and host countries have benefited from higher levels of productive foreign investment. We look forward to many more years of partnership.”
Keep up with all the latest FinTech news here here
Copyright © 2024 FinTech Global
