IFC Strengthens Reinsurance Industry in Turkey Through Earthquake Facility
Washington, DC, October 13, 2005—The International Finance Corporation, the private sector arm of the World Bank Group, will provide Milli Reassurans T.A.S. of Turkey with a contingent liquidity facility of up to $50 million. IFC’s backing will support the growth of the Turkish insurance market and build on the country’s existing capacity for earthquake reinsurance.
Milli Re plans to expand its business with a strong retrocession (reinsurance) program for earthquake coverage. The facility, which is IFC’s second to Milli Re, also allows the company to diversify its sources of reinsurance and gives it continued access to conventional reinsurance parties at reasonable rates.
IFC’s Acting Director for Southern Europe and Central Asia, Shahbaz Mavaddat, said, “Through this facility IFC will support the development of the local Turkish insurance market using prudent financial management instruments for earthquake risk, with terms at par with the international reinsurance market.”
IFC’s Director for Global Financial Markets, Jyrki Koskelo, said, “IFC is pleased to be working with an institution like Milli Re, which is focused on enhancing the insurance sector in Turkey by offering catastrophe reinsurance cover to local insurance companies.”
Milli Re’s Chairman, Prof. Dr. Ahmet Kýrman, said, “We are pleased to continue our collaboration with IFC. The support from IFC’s facilities enables us to offer increased reinsurance capacity to the local market while giving us the ability to stabilize the cost of our retrocession program.”
The International Finance Corporation is the private sector arm of the World Bank Group and is headquartered in Washington, D.C. IFC coordinates its activities with the other institutions of the World Bank Group but is legally and financially independent. Its 178 member countries provide its share capital and collectively determine its policies.
The mission of IFC is to promote sustainable private sector investment in developing and transition countries, helping to reduce poverty and improve people’s lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY05, IFC has committed more than $49 billion of its own funds and arranged $24 billion in syndications for 3,319 companies in 140 developing countries. For more information, visit www.ifc.org.
As of September 2005, Turkey is IFC’s fifth largest exposure in terms of committed portfolio (about $1,041 million) and third in terms of outstanding portfolio ($889 million).
Milli Re is the largest domestic reinsurance company in Turkey, Established in 1929, Milli Re continues to provide reinsurance capacity to local insurance companies. Milli Re has a strong brand name with a successful and profitable track record. As of December 2004, Milli Re had more than $500 million in assets, $339 million in earned premium, and a capital base of $259 million.
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