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| Global Index Reinsurance Facility |
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| Summary of Proposed Investment |
| This Summary of Proposed Investment is prepared and distributed to the public in advance of the IFC Board of Directors’ consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. |
| Project number | 24964 |
| Company name | PartnerRe |
| Country | World Region |
| Sector | Finance & Insurance |
| Environmental category | C |
| Department | Global Financial Markets Group |
| Status | Pending Signing |
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| Date SPI disclosed | November 29, 2006 |
| Projected board date | January 31, 2007 |
| Previous Events | Approved: November 8, 2007 |
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| Overview |
Sponsor/Cost/Location |
Development Impact |
Contacts |
Attachments |
| Project description |
The project is to establish a Global Index Reinsurance Facility (GIRIF or the company). GIRIF would consist of:
- a commercial risk-taking company to underwrite indexable weather and other indexable natural catastrophe risks in developing countries; and
-a technical assistance/donor funding pool to develop the technical parameters of the business.
The commercial risk-taking company will structure, underwrite and intermediate these risks for the protection of private entities and government, local farmers and financial intermediaries. The company will reinsure weather/catastrophic events, which adversely impact on the development process in developing countries and, in particular, on low-income and rural communities/individuals at the micro level. Index-based catastrophic insurance is a complex and sophisticated financial instrument, which is considered to be an efficient and effective means of intermediating catastrophic risks. |
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| Project sponsor and major shareholders of project company |
| PartnerRe Ltd. (NYSE:PRE) is a leading multi-line global reinsurer, providing risk-assumption solutions for the global insurance and capital markets. Partner Reinsurance Company Limited, a subsidiary of PartnerRe Limited., would be IFC's technical partner, with a commitment of 49% of the facility's equity, up to $35 million. PartnerRe was established in 1993, as a specialized catastrophe reinsurer. Today, they are a top ten reinsurance company underwriting risks on a global basis including property and casualty, catastrophe, specialty lines, life and alternative risk transfer solutions including weather products. On December 31, 2005, total revenues were $4.2 billion. As of September 30, 2006, total assets were $14.8 billion, total capitalization was $4.4 billion and total shareholders’ equity was $3.5 billion. Other shareholders are expected to be IFI’s, including IFC, with a stake of up to 19.9%. |
| Total project cost and amount and nature of IFC's investment |
| The company will have a total capital commitment of approximately $100 million, which is proposed to be subscribed in tranches. IFC proposes to make an equity investment of up to $20 million for a 19.9% shareholding in the company. |
| Location of project and description of site |
| The company is to be incorporated as a joint-stock reinsurance company in an acceptable jurisdiction. |
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| Anticipated development impact of the project |
| The project is expected to have a high development impact. It will create a new commercial reinsurance institution to seek and introduce novel risk mitigation instruments for developing countries, with potential impacts in disaster-prone environments and on rural/agricultural communities which are among the poorest segments of the population and most affected by extreme weather/catastrophic events. The project helps to foster a market-intermediate product to provide partial loss coverage in the event of catastrophes or losses from natural events/disasters that have impacts on the lives of communities. The project is expected to lower the entry barrier for international risk transfer by pooling smaller transactions and would thereby scale up risk transfer out of developing countries. |
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| IFC's expected development contribution |
| IFC and the World Bank are working in close collaboration with the sponsor to develop the various elements of the project, and coordinating with donor agencies for funding support. |
| Environmental and social issues - Category C |
| This is a social and environmental category C project. IFC's investment in this reinsurance company is a financial transaction that does not directly generate environmental or social impacts. |
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| For inquiries about the project, contact: |
Lisa Lewis, Senior Associate
PartnerRe Ltd.
Corporate Communications
One Greenwich Plaza, 4th Floor
Greenwich, CT 06830
Telephone: (203) 485-4200
Fax: (203) 485-8442
Website: http://www.partnerre.com/ |
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| For inquiries and comments about IFC, contact: |
General IFC Inquiries
IFC Corporate Relations
2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384
E Mail: Webmaster |
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