Innovative Risk-Sharing Program Furthers EXIM’s Charter by Working with the Private Sector to Minimize Risk of Losses and Protect U.S. Taxpayers
FOR IMMEDIATE RELEASE January 12, 2021
Office of Communications (202) 565-3207
WASHINGTON — Export-Import Bank of the United States (EXIM) President and Chairman Kimberly A. Reed today announced a new contract with Aon (NYSE: AON) as a broker partner under EXIM’s recently-expanded, risk-sharing program with private sector reinsurers.
“Increasing protections for U.S. taxpayers has been one of my top priorities as Chairman of EXIM and it was one of six promises I made to the U.S. Senate as part of my confirmation process,” said Chairman Reed. “Enhancing risk management also is very important to our team at EXIM. Public-private, risk-sharing agreements like today’s announcement are a win for U.S. taxpayers and further demonstrate that EXIM continues to work in conjunction with the private sector, not in competition with it, to support American jobs by facilitating U.S. exports and help the world buy American.”
Aon is a leading global professional services firm that provides a broad range of risk, retirement and health solutions. Aon’s Public Sector Partnership works exclusively with government clients on innovative public-private solutions.
“Aon is proud to partner with the EXIM in its important work to help increase U.S. exports, grow American jobs while protecting US taxpayers. Building on the successful pilot reinsurance transaction with this expanded risk-sharing program is an important step forward,” said Joe Monaghan, CEO of Aon’s Public Sector Partnership. “EXIM’s commitment to collaboration and innovation with the private sector is a great example of how thoughtful public-private partnerships can close the growing protection gap, build resilience, and drive improved outcomes for all stakeholders.”
Luke J. Lindberg, EXIM’s Chief of Staff and Chief Strategy Officer, whose responsibilities include risk management, also stated that “this contract builds upon EXIM’s robust risk management practices, and is a model for other government agencies to consider as they look to de-risk their own portfolios.”
In 2018, EXIM launched a $1 billion groundbreaking reinsurance pilot program that works with the private sector to share risk coverage for a significant portion of EXIM’s existing portfolio of large commercial aircraft financing transactions. This pilot program was developed in response to EXIM’s 2015 Congressional reauthorization. The legislation stated that EXIM “may establish a pilot program under which the Bank may enter into contracts and other arrangements to share risks associated with the provision of guarantees, insurance, or credit, or the participation in the extension of credit, by the Bank under that Act.”
Chairman Reed—given the success of the pilot program, positive feedback from the U.S. Congress and stakeholders, her commitment to increase taxpayer protection and desire to reduce the risks of taxpayer liabilities for possible losses— prioritized expanding EXIM’s reinsurance effort, with the intent of reinsuring EXIM’s broader portfolio beyond the pilot’s focus on aircraft transactions.
Chairman Reed underscored the success of the pilot program and hopeful expansion during the U.S. Senate Committee on Banking, Housing, and Urban Development hearing entitled “Oversight of the Export-Import Bank of the United States,” which took place on June 23, 2020.
In February 2020, EXIM issued a Request for Quotation for advisory services related to the program expansion and received strong interest from brokers and banking institutions, ultimately selecting Aon plc, as its broker partner. Aon is an industry-leader with significant expertise in managing complex risk, including similar public-sector credit-risk-transfer programs like the one EXIM is expanding.
EXIM is an independent federal agency that promotes and supports American jobs by providing competitive and necessary export credit to support sales of U.S. goods and services to international buyers. A robust EXIM can level the global playing field for U.S. exporters when they compete against foreign companies that receive support from their governments. EXIM also contributes to U.S. economic growth by helping to create and sustain hundreds of thousands of jobs in exporting businesses and their supply chains across the United States. In recent years, approximately 90 percent of the total number of the agency’s authorizations has directly supported small businesses. Since 1992, EXIM has generated more than $9 billion for the U.S. Treasury for repayment of U.S. debt.
For more information about EXIM, please visit www.exim.gov.