Project finance has become one of the fastest growing asset classes covered by the credit insurance market. Many underwriters are synthesizing the risk engineering expertise of their construction insurance peers to develop a holistic risk view of infrastructure projects, building their capacity to support all clients involved, from lenders and sponsors to EPC contractors and other stakeholders.
Three major markets in Asia Pacific – Singapore, Australia, and Japan – recognize credit insurance as a regulatory capital relief tool to lower risk-weighted assets, while Malaysia and Taiwan have implemented regulatory policy changes that are leading to greater adoption of credit insurance by local banks.
By increasing the sums lenders can commit to a project, credit insurance solutions are proving to be a boon to capital mobilization. Simultaneously, tailored political risk products can also enhance the bankability of project structures. As global infrastructure development becomes increasingly reliant on project financing methods, credit solutions are emerging as an important tool for optimizing risk allocation and accessing better financing.
“It may be known as credit insurance; however, our industries capabilities go well beyond protection. We facilitate access to new forms of capital, helping to drive growth opportunities in both developed and emerging markets,” says Gary Lorimer, Aon’s Growth Leader for Credit Solutions.
