Lloyd’s and the World Bank Group target increased guarantee issuance

Lloyd’s, the specialist insurance and reinsurance marketplace, has partnered with the World Bank Group’s Multilateral Investment Guarantee Agency (MIGA) in an effort to boost annual guarantee issuance to $20 billion by 2030.

For this initiative to be successful, collaboration with reinsurers will be vital, and the cover provided by the Lloyd’s market enables MIGA to utilise its investment guarantee capacity, which in turn enables investors to obtain greater levels of protection for projects in developing countries.

This formal partnership between Lloyd’s and MIGA builds on more than a quarter of a century of collaboration between the pair, and highlights a commitment from both to drive sustainable development outcomes through the World Bank Group Guarantee Platform.

Yesterday, at a flagship event in Manhattan as part of New York Climate Week, it was revealed that Banco do Brasil S.A. is to receive a $1.2 billion MIGA guarantee for a loan to support local lending for farmers engaged in no-till agriculture and other climate-smart agricultural practices offering carbon sequestration and climate resilience benefits. The mobilisation of the private capital is supported by 15 reinsurers.

Under the new partnership, MIGA is now housing the World Bank Group Guarantee Platform.

Over the years, their collaboration has facilitated the provision of guarantees to global projects that support economic growth, reduce poverty, and improve quality of life. The pair state that many of these projects have also advanced climate change mitigation and adaptation efforts in developing countries.

In FY24 alone, MIGA issued guarantees supporting climate change mitigation or adaptation in 30 projects and across 22 countries.

“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,” said John Neal, Lloyd’s CEO.

Hiroshi Matano, MIGA Executive Vice President, added: “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.”

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