Insurers mourn missed chance to form EU ECA

(Global Capital, London, 30 June 2021) Europe missed an opportunity to use the debate over the future of development finance to establish an insurance guarantee agency to attract private capital needed to help them hit targets for investment into emerging markets, according to experts in trade finance and insurance. Policymakers spent two years debating whether to use the EBRD or the European Investment Bank as a platform for a new single development bank before deciding to stick with the current set-up augmented by a more collaborative approach dubbed “Team Europe”. An EU development insurer could also use reinsurance to mobilise substantial amounts of non-development finance institutional capital from the private insurance market and from EU export credit agencies, Paul Mudde, former trade finance professional at ABN Amro and trade credit insurer Atradius, said. The problem, in his view, was that in the EU discussions about the European Financial Architecture for Development (EFAD) an insurance approach, like the World bank’s MIGA, had never been considered.