ANNUAL REPORT

Nippon Export and Investment Insurance2017Message
from the Chairman

I would like to express my deep appreciation for your extensive support and cooperation with Nippon Export
and Investment Insurance (NEXI) as we present this report.
During FY2017, the global economy continued its gradual recovery on account of growth in trade andproduction throughout the world and firm demand. On the other hand, it is necessary to keep in mind several
points about the future, including the outlook for Asian and other emerging economies and possible impact ofboth policy uncertainty and financial and capital market volatility.
Under these conditions, NEXI transformed from an incorporated administrative agency into a special
stock company wholly owned by the government in April 2017 and the government’s reinsurance system
was abolished. With NEXI’s launch as a stock company, we laid the necessary foundation by strengthening
governance through various efforts such as establishing the Board of Directors and the Audit and Supervisory
Board as well as undertaking several new activities, including ceding reinsurance to private-sector reinsurancecompanies and launching sales of US dollar–denominated loan insurance.
In addition to actively supporting power and other infrastructure projects to promote quality infrastructure
exports, a policy pushed by the government, we worked to improve our products and services reflecting
the needs of our customers, such as relaunching of the underwriting of Export Credit Insurance for projects
with long-term deferred payment. Another important policy promoted by the government is supporting theoverseas expansion of small- and medium-sized enterprises (SMEs) and the agricultural, forestry, and fishery(AFF) industry. During the fiscal year, we continued to promote our insurance by further expanding the SME
overseas business support network based on collaboration with regional and shinkin banks, and strengthening
PR activities. As a result, the number of NEXI insurance users increased by more than 10% compared to theprevious fiscal year.
As the economy becomes more global, we will continue to strive for not only providing quality insurance
services that satisfy more diverse business needs but also giving a sense of reassurance to more NEXI users
in order to win the global competition through public and private collaboration. We appreciate your continued
understanding and support.

Kazuhiko Bando
Chairman and CEO
Nippon Export and Investment Insurance
July 2018

Contents
Message from the Chairman ─ ───────────────────  	 3About NEXI
Profile of NEXI ─ ──────────────────────────────  	 6Business Plan ─ ──────────────────────────────  	 8Business Operation and Management System ─ ────────────  	14Organization Chart ─────────────────────────────  	16Access Map ─ ───────────────────────────────  	17NEXI’s Business
Trade and Investment Insurance - How It Works ────────────  	20Insurance Products to Support Your Business ─ ────────────  	21Application Procedure for Trade and Investment Insurance ─ ─────  	28International Cooperation ─────────────────────────  	32TOPICS ───────────────────────────────────  	34FY2017 Review of Performance
Performance Highlights ──────────────────────────  	36Review of Performance ─ ─────────────────────────  	42Business Overview ─ ───────────────────────────  	46Underwritten Projects ───────────────────────────  	52Underwritten Projects (SMEs related)─ ───────────────────  	58FY2017 Financial Results
FY2017 Financial Review ─ ────────────────────────  	66Financial Statements etc. ─────────────────────────  	67Figures in this Annual Report
In principle, ﬁgures in this report are rounded to the nearest unit. Therefore, the sum of
individual ﬁgures may deviate from the sum presented. Figures that fall below a unit as aresult of rounding are indicated as “0”; if there is no corresponding ﬁgure, “–” is indicated.
Figures in the trade and investment insurance business are on a ﬁscal period basis unlessotherwise noted.

About NEXI
Profile of NEXI

6

Business Plan

8

Business Operation and Management System

14

Organization Chart

16

Access Map

17

About NEXI

Profile of NEXI
Organization Name

Nippon Export and Investment Insurance

Date of Establishment

April 1, 2017

Acts

Trade and Investment Insurance Act

PurposeTo conduct insurance business to cover risks which arise in foreign transactions not covered byordinary insurance

Competent Minister

The Minister of Economy, Trade and Industry

CapitalJPY 169,352,324,369 (100% State-owned)

Executive Officers

Chairman and CEO

Kazuhiko Bando

President

Masafumi Nakada

Senior Managing Executive Officer, Member of Board

Keiji Wada

Senior Managing Executive Officer, Member of Board

Kohei Okada

Member of Board

Hideo Teramoto

Audit & Supervisory Board Member (Full-Time)

Keishi Nakamura

Audit & Supervisory Board Member

Akio Otsuka

Audit & Supervisory Board Member

Tomoyo Matsui

Number of Employees

178 (as of April 1, 2018)

Scope of Business

1) To conduct trade and investment insurance business operations complying with the provision ofChapter III of the Trade and Investment Insurance Act.
2) To conduct business incidental to the business stated in 1) above.
3) To underwrite reinsurance for international institutions, foreign governments or foreign companies
who underwrite insurance (including reinsurance) which indemnifies losses similar to the losses
covered by the trade and investment insurance, for the liability incurred by such insurers.
4) To underwrite reinsurance for Japanese insurance companies who underwrite insurance (excluding
ordinary insurance) other than the trade and investment insurance deemed necessary to carry out
the purpose of sound development of foreign transactions as prescribed by Cabinet Order, for theliability incurred by such insurers under the said insurance.
5) To cede reinsurance of the liability held by NEXI under the Trade and Investment Insurance Act
to international institutions, foreign governments or foreign companies who underwrite insurance(including reinsurance) which covers the risks similar to those covered by the trade and investment
insurance.

Brief History

Jul. 1999

Enactment of Act on General Rules for Incorporated Administrative Agency

Dec. 1999 Enactment of Act Revising a Section of the Trade and Investment Insurance Act
Apr. 2001 Establishment of Nippon Export and Investment Insurance (NEXI) as an Incorporated
Administrative Agency
Jul. 2015
Apr. 2017

Enactment of Act Revising a Section of the Trade and Investment Insurance Act
Establishment of Nippon Export and Investment Insurance (“new” NEXI) as a special
stock company(From 1950 through 2001. the trade and investment insurance was handled by the Ministry of Economy, Trade and Industry, theformer Ministry of International Trade and Industry.)

6

Domestic Offices

Head Office: Tokyo, Branch Office: Osaka

Overseas Offices

Paris, New York and Singapore

Annual Report FY2017

Executive Officers
About NEXI
NEXI’s Business
FY2017 Review of Performance

Back Row: Kohei Okada (Senior Managing Executive Officer, Member of Board), Hideo Teramoto (Member of Board)
Front Row: Masafumi Nakada (President), Kazuhiko Bando (Chairman and CEO), Keiji Wada (Senior Managing Executive
Officer, Member of Board)

FY2017 Financial Results

Akio Otsuka (Audit & Supervisory Board Member), Keishi Nakamura (Full Time Audit & Supervisory Board Member),Tomoyo Matsui (Audit & Supervisory Board Member)

Annual Report FY20177

About NEXI

Business Plan

< 2018–2020 Medium-Term Business Plan & FY2018 Plan >Fundamental Principles of Medium-Term Business Plan
Nippon Export and Investment Insurance ( NEXI ) will implement its
medium-term business plan (FY2018–FY2020), the three fundamental
principles of which are as follows.
◦ A s the only specialized institution responsible for the government
system of trade and investment insurance, NEXI will provide a greaternumber of customers involved in overseas business with peace of mind
through its rich experience and expertise.
◦ W hile giving sufficient consideration to the demands of Japanese
government policies, including advancing the Partnership for Quality

Infrastructure and supporting exports of small and medium-size
enterprises (SMEs), and the agricultural, forestry, and fishery (AFF)
industries, NEXI will promote efforts to implement Japan’s growthstrategy.
◦ In addition to working to comprehensively manage risks as underwriting
risk increases both in quality and quantity, NEXI will actively meet thediverse needs of customers while ensuring as much underwriting
capacity as possible through appropriate risk management throughreinsurance.

I. Business Operation Plan
Items marked with a black square ( ■ ) are those in the Medium-term
Business Plan (2018–2020).
Items marked with a black dot ( ● ) are those in the plan for this fiscal year
(FY2018).

1. Efforts to actively underwrite trade andinvestment insurance(1) Efforts in the field of short-term insurance< Basic approach >NEXI will ascertain the needs of customers in partnership with thevarious types of export associations, the users of comprehensive
insurance, and improve customer convenience by [1] offering more
appropriate products, [2] simplifying procedures, and implementing
other measures. NEXI will also continue to promote overseas
fronting business, which supports exports of the local subsidiaries
of Japanese companies.
■ M ake insurance application procedure more convenient forcustomers.
◦ F or Export Credit (Comprehensive ) Insurance (consumer goods,
equipment, and enterprise comprehensive insurance ) , reduce thenumber of export contracts and paper documents that must be
submitted for application and make procedures more convenient.
■ F acilitate the continued use of insurance by ascertaining
needs through consultations with companies that purchasecomprehensive insurance (for associations) or comprehensive
insurance (for enterprises).
◦ F acilitate the renewal of comprehensive insurance policies amongcustomers when policies come up for yearly renewal.
■ P romote reinsurance for Japanese companies and overseas
fronting business through partnerships with private-sector
casualty insurance companies.
◦ Promote overseas fronting business to support Japanese companies
that operate overseas.
◦ Expand NEXI’s reinsurance network through partnerships with privatesector casualty companies. <Expand reinsurance network: 1>(2) Efforts in the field of medium and long-term insurance< Basic approach >In priority fields, NEXI will play an active role in the process ofdeveloping projects, leverage its efforts to improve functions
based on the Partnership for Quality Infrastructure, and respondto the risks that taking on challenges entail. As for finance that
requires special know-how, NEXI will move forward with creating
an in-house system while training employees.
■ R einforce efforts in priority fields and aggressively support
exports by and the overseas expansion of Japanese companies.
◦ Actively support fund raising required for Japanese companies to export
products and expand overseas through trade and investment insurance.
In particular, actively implement measures in priority fields, such as for
projects that have a high policy priority (exporting quality infrastructure,etc.). <Of 20 commitments (pre-approvals ), 12 are in priority fields,
including reinsurance provided to aircraft projects). 30 projects are theresult of active measures.>(Projects in priority fields)① Projects with a high policy priority◦ E xporting high quality infrastructure / overseas businessparticipation◦ Securing stable supply of natural resources, energy, and food◦ Exporting advanced environmental and safety technology exports /overseas business participation (projects that contribute to greater
energy efficiency and a better environment)◦ Exporting products and services that employ advanced technology
possessed by Japanese companies / overseas businessparticipation② Projects that make major contributions to the strategic overseas
expansion of Japanese companies.
③ Joint projects with international public financial institutions or thoseof other countries that are internationally recognized as importantor that contribute to raising awareness of NEXI overseas or building
cooperative relationships.
◦ F acilitate the active use of Overseas Investment Insurance byascertaining the needs of customers and partnering with internationalorganizations in high risk countries, etc. <New underwriting projects:40>◦ Facilitate the active use of supplier’s credit, which has been increasingly
demanded in recent years.

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Annual Report FY2017

Japan and securing of upstream interests by Japanese companies inorder to advance efforts to secure and develop natural resources.

■ M ove forward with efforts to support orders for the Japanproduced aircraft MRJ and develop Buyer’s Credit Insurance
for aircraft. At the same time, create an underwriting, policy
management, claim payment, and collection system appropriate
for the unique aspects of aircraft financing.

(2) Expanding the use of trade and investment insurance,
including that for SMEs and AFF sector(3) Efforts related to underwriting assessment< Basic approach >NEXI will actively respond to the diverse needs of customers andmore complex risks by improving its assessment capabilities.
■ Improve underwriting screening capabilities taking into
consideration the unique aspects of each sector.

■ Verify the accuracy of current buyer ratings and make necessarychanges.
■ R e s p o n d t o t h e i n c re a s e i n n u m b e r o f s m a l l p ro j e c t sunderwritten (particularly for SMEs).
◦ R espond to the increase in the number of SMEs using trade andinvestment insurance and review the screening decisions regarding
buyers with an EC equivalent rating.

2. Efforts to expand the use of trade andinvestment insurance< Basic approach >NEXI will support the smooth development of projects and fundraising through the use of trade and investment insurance, which
will include developing more appropriate trade and investment
insurance and improving its operation, taking into consideration
the trend forward stricter financial regulation throughout the world,such as Basel rules, and new demands in infrastructure markets.
■ Respond to the needs of entities such as financial institutions,
exporters, and investment funds etc. to remove risk assets fromits balance sheet, reduce risks, etc.

■ Substantially increase the number of companies that use tradeand investment insurance by publicizing its importance andeffectiveness.
<Increase the annual number of insurance users from 750 entities in
FY2016 to 820 in FY2017, 900 in FY2018, and 1,000 in FY2019.>(3) Reinforcing sales and PR activities< Basic approach >NEXI will actively undertake PR activities targeting companies
engaged in or considering overseas business, and will increaseawareness of trade and investment insurance to promote its use.
■ Improve the content of the website, pamphlets, etc., from
customers’ perspective.
◦ Post information on the website regarding topics such as application
procedures for Export Credit (Comprehensive) Insurance (equipment
and enterprise comprehensive insurance) and Q&A (See I.1.(1) “Efforts
in the field of short-term insurance”). <October>.
◦ E nhance the content of the annual report from the perspective of
sufficient disclosure.
◦ Improve the content of the website and make effective revisions taking
into consideration the analysis of customer opinions and website use.
< 1.67 million page views and more than 70% of customer survey
respondents give the website a high overall rating.>◦ Regularly post information on the website regarding NEXI’s efforts toimprove systems, operation, procedures, etc. to provide information tocustomers. <Twice a year>■ P romote PR and advertising activities and strengthen
information dissemination through media that attracts potential
customers.
◦ Facilitate greater use of trade and investment insurance among thevarious segments through numerous types of seminars, informal
meetings, and explanatory meetings for customers. <50 times>

FY2017 Financial Results■ Facilitate the smooth development of projects and expansion offund raising channels by developing more appropriate insurance
and improving operations.

NEXI will facilitate the use of trade and investment insurance
regardless of the size of the company or whether the policy is new
or renewal, and increase the number of companies that use theinsurance. NEXI will also promote its use by SMEs and AFF sector
taking into consideration that facilitating their exports is a priority
policy.

FY2017 Review of Performance(1) Responding to changes in the financial environment
and new demands< Basic approach >NEXI’s Business■ Improve assessment capabilities by increasing know-how
related to risk assessment and negotiating terms for financing
projects and promoting the sharing of the knowledge internally.

About NEXI■ More actively facilitate the export of Boeing parts produced by
Japanese companies by underwriting reinsurance related to theexport of Boeing aircraft.

◦ Actively provide information on NEXI’s efforts via press release andfacilitate providing newsworthy information to the media. < 140newspaper articles of which 50 are carried in national papers>◦ P rovide greater flexibility for premium payment deadlines in orderto facilitate the development of mini-perm loans, a type of financing
assuming refinancing to extend the financing period and reduce
financing costs. <April>◦ Set detailed insurance premium rates for medium and high risk financing
appropriate for the risk level.
◦ Introduce more flexible premium installment payments to facilitate thedevelopment of financing appropriate for various types of business.
◦ E xpand the scope of Investment and Loan Insurance for Natural
Resource and Energy that supports imports of natural resources to

Annual Report FY2017

9

About NEXI

Business Plan <2018–2020 Medium-Term Business Plan & FY2018 Plan>

3. Efforts to improve services for customers(1) Strengthening advisory function< Basic approach >NEXI remains aware that it is Japan’s only trade and investment
insurance entity and will strive to create an active organization thatreaches out to customers.
■ Strengthen support to develop projects, which includes making
proposals in line with the needs of customers.

■ Promptly pay claims.

◦ Work closely with customers and promptly and quickly pay claims.
<Complete payment procedures within one month of receiving claim.>■ Promptly and meticulously respond to inquiries from customers
regarding appraisal.
◦ Improve customer service through quick, quality response related toinsurance claims adjustments. <As a rule, respond to inquiries from
customers regarding claims the next business day.>◦ Create pamphlets with easy-to-understand explanations of necessary
procedures when an insured event occurs as well as points to keep
in mind, and consider its use when handling inquiries from customers
regarding assessments.

◦ Repost I.1(1) and (2).
■ Strengthen customer contact services.

◦ Provide more extensive responses to customer inquiries.
■ Improve the provision of country information that customersneed.

(2) Improving customer convenience and satisfaction< Basic approach >NEXI will strive to ascertain the level of customer satisfaction andneeds and continually review its products and services.
■ Ascertain the opinion of customers through customer surveys,
consultations, and PR activities, and reflect the results inimprovements to insurance products and services.
◦ C onduct customer surveys to ascertain the level of customer
satisfaction and reflect those results to business operation.
◦ Link customer opinions to improvements in products and services
and raise customer satisfaction. <Achieve the following targets for thecustomer survey: 90% or above for overall evaluation, 75% or above
for overall service, 80% or above for customer service, 75% or above
for prompt decision making, and 70% or above for reduced procedureburden.>■ Work to improve and expand Internet-based services taking into
consideration customer needs and raise convenience (including
Overseas Investment Insurance Web version).
◦ Update Web service manual in order to improve usability taking into
consideration requests from customers and also provide on-screen
explanations mainly for easy-to-misunderstand parts.
■ Improve understanding of the basic approach and importance of
the Environmental Guidelines among customers.
◦ Create opportunities to meet with customers and provide explanationsof environmental assessments in order to promote understanding of theEnvironmental Guidelines among customers and increase understandingof the assessment process.

4. Efforts related to quick and proper
assessment and claims payments andpreventing insured events(1) Quick, proper appraisal and claim payments< Basic approach >Even if the customer is confronted with an unexpected occurrencein its overseas business, NEXI will provide peace of mind to thecustomer by striving to provide quality event-response services,from the occurrence of the insured event to claim payment.

10

Annual Report FY2017(2) Preventing greater losses from insured events< Basic approach >Taking into consideration the facts that insured events have agreater impact because of the larger volume of underwriting risk
and that preventing insured events benefits customers, NEXI willquickly ascertain projects that could involve the insured eventsoccurring by reinforcing its monitoring of underwritten projects andwill implement countermeasures.
■ Strengthen policy monitoring related to financing projects.

◦ Verify how monitoring operations should be undertaken and create an
appropriate monitoring system as underwriting of projects with complex
project finance increases.
◦ Strengthen monitoring of underwritten projects through efforts such as
regularly exchanging opinions with the insureds regarding measures toprevent or reduce losses from insured events.
■ Appropriately manage country exposure.

5. Increasing recovery capability< Basic approach >In addition to developing a recovery system, introducing a PDCA
cycle, and raising the skills of responsible staff, NEXI will steadily
and effectively recover claims paid by partnering with the Japanese
government to ensure that foreign governments and governmentorganizations pay their debts.
■ F urther strengthen the recovery system through the use ofoutside resources.
◦ Make use of not only legal counsel already being retained but also otherattorneys that NEXI consult with.
◦ F or recovery operations that have been outsourced, conduct
actual inspections of collection agencies for current contracts andinvestigations of ECA recovery systems and reinforce the recovery
systems. <Inspections and investigations: 4 companies>■ Establish a PDCA cycle related to recovery by ascertaining andverifying recovery results.
◦ Verify the recovery policy and processes by ascertaining the results ofrecovery efforts and establish a PDCA cycle for recovery operations.
< Recovery rate for major projects: 1.5% for FY2018, 17% for
FY2018–FY2020 (total amount recovered over 1 year or 3 years/initial
outstanding balance of debt.>◦ Make actual use of recovery database.

■ Improve the skills of staff responsible for claims recovery.
◦ Improve ability to actually undertake recovery operations ( develop
countermeasures, make judgments, negotiate, etc.).

(2) Promoting partnerships with overseas organizations◦ Improve the skills of responsible staff by holding in-house training andseminar, participating in outside training, etc.

NEXI will create an environment conducive to exports and project
participation of Japanese companies through policy dialogues withforeign governments, government organizations, etc., and stronger
relationships with overseas sponsor organizations. NEXI will also
create a support framework based on international rules.

(1) Promoting partnerships with entities in Japan< Basic approach >NEXI will promote partnerships with related organizations in Japanand raise awareness of trade and investment insurance so that
it will lead to NEXI’s indirect support for developing projects andincreased use of trade and investment insurance.

◦ H ave overseas offices interview think tanks and internationalorganizations such as the IMF on country situations necessary for
project screening and cover policy update. Use the results of theinterviews for appropriate underwriting assessment and cover policy
update.

■ C reate an environment conducive to exports and project
participation of Japanese companies through policy dialogue
with overseas governments and government organizations andstronger relations with overseas sponsor companies.
◦ R einforce cooperation with overseas offices and effectively andefficiently contact foreign governments, government organizations, andsponsor companies at various levels.
■ Work to strengthen partnerships through bilateral meetings withparties such as ECAs of other countries and participation in
Berne Union meetings.

NEXI’s Business■ Support the development of projects through various efforts
such as the active participation of the Japanese government
in overseas missions, stronger partnerships with Japanese
embassies in foreign countries, etc., and promote the use of
trade and investment insurance as a policy tool.

About NEXI

6. Promoting partnerships with outside
entities< Basic approach >◦ Invite entities such as ECAs of Asian countries to NEXI’s training session
and strengthen the relationship with these entities.
◦ Actively gather information and exchange opinions on business issues
through bilateral meetings and Berne Union meetings.
■ C ontribute to the creation of an appropriate internationalframework by actively participating in discussions at OECD, IWG
and other international conferences related to export credit.
◦ C ontribute to the creation of an international framework at OECD
export credit meetings (ECG, environment, CRE), and IWG meetings.
Contribute to discussions in order to create Japanese response
measures based on actual short-term and mid- to long-term businessconditions.
◦ A ppropriately implement international agreements and follow
international rules to which Japan is a party.

FY2017 Review of Performance

II. Organization operation plan
1. Implement strong corporate governance(1) Build internal control system< Basic approach >NEXI will build and operate an appropriate internal control system
in line with the Internal Control Principles.

◦ Confirm the creation and operation of an internal control system basedon the Internal Control Principles through internal audits, etc.
■ Strengthen crisis management system.

◦ Conduct an earthquake and disaster drill semiannually.

◦ Fully educate employees on the crisis management system and be
prepared to operate the system smoothly in an emergency.
■ Fully educate employees on compliance program.

◦ Undertake efforts to raise staff awareness of compliance.

◦ Conduct employee training for cases such as targeted e-mail attack.

◦ Verify reporting process in the case of a security incident to update thecontact system and policy.

(2) Apply PDCA cycle to business and enhance
operational transparency and efficiency

FY2017 Financial Results■ Appropriately implement Internal Control Principles.

◦ Conduct a review of the Internal Control Principles within the FY 2018,
and make revisions as needed.

◦ Develop and implement a plan to strengthen the security of information
system based on the analysis of the results of security diagnosis
surveys.

< Basic approach >NEXI will apply the PDCA cycle to its business based on objective
evaluations by the Evaluation Committee on business planningand its implementation status. NEXI will also clarify authority andresponsibilities related to organizational operation; promote thestandardization and manualization; and continue to review andrevise the plan. NEXI will streamline and improve its operation,
identifying the most suitable way to adapt to changes in theexternal environment at an early stage and pursuing an ideal
operation process.

■ Strengthen security of information system and apply the PDCA
cycle appropriately.

Annual Report FY201711

About NEXI

Business Plan <2018–2020 Medium-Term Business Plan & FY2018 Plan>■ Apply an appropriate PDCA cycle for overall business.
◦ Maintain thoroughness of the corporate philosophy.
◦ Conduct a performance evaluation for FY2017. <June>◦ Conduct customer surveys in order to reflect customer evaluation tobusiness operation. (Reposted I.3. (2) ).
■ Clarify authority and responsibilities related to organizational
operation.
◦ Further expand and improve the practical operation manual.
■ Continually improve operation process.

◦ Continually conduct operation process reviews in order to streamline
and increase the efficiency of operations.
■ Promote outsourcing of routine operations from perspective ofefficient business operations.
◦ Outsource routine operations.

(3) Maintain thoroughness of risk management< Basic approach >NEXI will formulate rules related to integrated risk management,such as insurance underwriting risk; fund management (financial)risk; operational risk including administrative risk and systemrisk, aiming to establish the PDCA cycle. We will steadily reducerisks mainly by building (projecting) the framework of reinsurance
process and thereby conducting reinsurance.
■ F ormulate integrated risk management policy, centered onunderwriting risk, fund management risk and operational risk,
and appropriately apply PDCA cycle.
◦ Conduct appropriate monitoring and reporting in line with the Insurance
Underwriting Risk Management Policy, Fund Administration Basic
Policy/Rules, and Operational Risk Management.
◦ Conduct surveys and research toward upgrading insurance underwriting
risk management.
■ Steadily conduct reinsurance in line with reinsurance plan inorder to diversify underwriting risk.
◦ Conduct reinsurance in April 2018, simultaneously formulate a medium
and long-term reinsurance policy in the first half of the year, andafterward consider whether or not to conduct reinsurance in line withthe policy.

(2) Manage funds< Basic approach >NEXI will promptly create fund management policies and system
for assets including those transferred from the Special Account for
Reinsurance, and efficiently manage funds while ensuring stability
and liquidity.
■F ormulate and implement policies on managing assets, including
those transferred from the Special Account for Reinsurance.
◦ Steadily administer funds in line with fund administration plan so as not
to hinder the business operations and start to manage funds.
◦ R egularly monitor and report on fund administration and fundmanagement performance.
◦ Review the fund administration plan including the fund management
plan, and revise the plan as needed.
◦ Develop the fund management system.
■ Formulate borrowing policies and procedures in case it becomes
necessary to obtain government guarantees or take out loans.
◦ Ensure appropriate government guarantee.

(3) Manage expenses and procurement< Basic approach >NEXI will properly control costs in order to promote effective
business, and also will promote appropriate and efficient contract
and procurement operations.
■ Improve efficiency of expenses through cost controls.

◦ Control expenses in line with the expenditure management policy.
■ P romote proper and efficient contract and procurement
operations.
◦ Raise awareness of employees regarding various laws and ordinances
related to contracts and procurement.

3. Improve disclosure< Basic approach >2. Implement appropriate financial
management(1) Ensure appropriate accounting< Basic approach >NEXI will actively provide stakeholders and societies withinformation on governance, such as risk management system,compliance and evaluation committees.
■ Fulfill accountability to stakeholders by improving disclosure.

◦ Expand disclosure of information through website and annual report.
(Reposted 1.2. (3)) <Within the fiscal year>

NEXI will appropriately prepare financial statements based on new
accounting financial standards and handle tax matters.
■ Prepare financial statements based on new financial accounting
standards and schedules, and introduce tax-effect accounting.
◦ P repare financial statements based on new financial accounting
standards and schedules. <For the full fiscal year>■ Conduct appropriate tax operations and in-house educational
activities, such as developing a system using tax specialists andsupporting the creation of manuals.
◦ Appropriately report taxes and properly respond to tax inspections.

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Annual Report FY2017

4. Develop human resource base(1) Recruiting and training< Basic approach >NEXI will steadily recruit new employees based on its personnelplans and increase the specialized skills of employees throughvarious types of training.

■ Steadily conduct hiring based on human resource plan.

◦ Steadily make appropriate personnel assignments based on the humanresource plan.
◦ Secure needed specialists through mid-career hiring and accepting
temporary transferees from other companies.
◦ Expand the use of contract employees.

◦ Strengthen the System Division’s human resource system.
■ Conduct various types of training to improve specialized skills of
employees.
◦ Conduct grade-specific training. In particular, stress developing themanagement skills of managers. Create a training system for employees
to acquire operational knowledge.
◦ Promote creating a system for sending staff to external institutions fortraining and to other countries for study abroad.

(2) Treatment and workplace environment

NEXI will treat employees fairly and equally for them to achieveself-realization through work as well as will raise their motivation
to link individual’s performance to the entire organization’sachievement. NEXI will also prevent psychological and physicalhealth problems by improving workplace environment, leading toenergizing workplace and increasing productivity.
■ Treat employees fairly and equally and improve the goalmanagement system.
◦ C ontinue to review the goal-management system taking into
consideration the effect and understanding of employees, and steadily
operate the systemized scheme.

system: designing, developing, conducting the individual and integrated
tests and establishing the basic environment.
■ E nsure uniformity of definitions for statistical data as basic
information.
◦ Undertake a process of creating a statistic system: design, development
and test.
■ B uild system that makes it possible to check operating
indicators in a timely manner, needed for making businessdecisions.
◦ Promote the improvement of the accuracy of the statistic systems andof employee literacy.

(2) Employ state-of-the-art technology< Basic approach >NEXI’s Business< Basic approach >◦ Systematically implement tasks aiming to develop the next-generation

About NEXI

◦ Steadily hire new graduates in line with the human resource plan.

standard/de-facto-standard technology, and products to free thecompany from being locked into a particular vender.)In addition to examining the possibility of specifically applying
cutting-edge technology to in-house operations, such as FinTech,
AI and big data, NEXI will develop an outlook and orgatinze issues
related to the future use of those technologies through research of
the needs as well as technical surveys and verification.
■ Ascertain outlook and issues related to specifically applying
cutting-edge IT technology to in-house processes, including
FinTech, AI, big data and recognition technology.
◦ Promote the introduction and use of AI technology in order to improvecustomer care.
◦ C ontinue to examine the possibility of using AI for buyer rating
screenings.

◦ Steadily move toward introducing and operating the system for working
from home.
◦ Promote work-life balance, such as reducing overtime work, promoting
the use of paid days off and introducing the flex-time system.
■ Make additional efforts to promote active use of women.

◦ Create a work environment in which female workers can make the mostof their skills.

◦ Conduct seminars related to nursing care, etc.

5. Develop information system environmentand strengthen operational support
functions< Basic approach >6. Make use of overseas offices< Basic approach >Using its overseas offices, NEXI will work to undertake various
activities including gathering information on overseas localities,
raising its global presence, strengthening the relationship andsupporting running projects with foreign governments andcorporations, and communicating information to overseas
Japanese companies. NEXI will also develop a framework foroverseas offices to fulfill these functions effectively.
■ Examine best way to run organization so that overseas offices
can effectively fulfill these functions, and afterward steadily
implement measures to do that.

FY2017 Financial Results(1) Develop next-generation core system (to be launchedin 2020) and rebuild information system

FY2017 Review of Performance■ C reate work environment that makes various work styles
possible.

◦ Review the position of overseas offices in the organization and theway for them to run operations, in order that the offices can fulfill theirfunctions effectively and appropriately, and can promote overseas tradeand investment insurance business effectively.

NEXI will develop a next-generation core system to be launched
in January 2020; work to cut running and maintenance expenses;
ensure maintainability and expandability; create a simple anduniversal system; and improve convenience of the information
system.
■ Develop a next-generation core system to be launched in 2020.
(Reduce IT costs 50% compared to actual, shorten development andmaintenance time at least 50% compared to actual, incorporate open-

Annual Report FY201713

About NEXI

Business Operation and Management System
Corporate Governance
Surveillance, Evaluation and Business
Execution
Through the establishment of the Evaluation Committee,
the Corporate Management Committee and the Corporate
Governance Committee in addition to organs such as the Boardof Directors and the Audit & Supervisory Board in compliancewith the Companies Act, NEXI strengthens the surveillance andevaluation functions as well as enhances its mobility in businessexecution.

duties based on various laws and regulations such as theCompanies Act and the Articles of Incorporation. The Audit &Supervisory Board consists of three corporate auditors, twoof whom are outside corporate auditors as stipulated in the
Companies Act. Outside corporate auditors, in collaboration
with the full-time corporate auditor, audit the execution of dutiesof the directors from an outside perspective and contribute to
the improvement of governance structure at NEXI. In addition,
the Audit Secretariat is established to assist the corporate
auditors with their duties.
◦Evaluation Committee

General Meeting of
Shareholders
Audit & Supervisory
Board

Independent
Accounting Auditor

The Evaluation Committee consists of outside experts andthe outside director of the company. This organ evaluates andadvises on the operation and management status of NEXI
as well as issues to be consulted by the Board of Directors
regarding NEXI’s management.
◦Corporate Management Committee

Board of Directors

Evaluation Committee

Chairman & CEO

The Corporate Management Committee is a conference bodycomposed of executive officers and others, and deliberates
important management issues (except for issues to beaddressed by the Corporate Governance Committee).
◦Corporate Governance Committee

Internal Audit Group
Corporate Management
Committee
Corporate GovernanceCommittee◦Board of Directors
The Board of Directors makes decisions on importantmanagement issues and supervises the execution of NEXI’s
business operations. The Board of Directors consists of five
directors, one of whom is an outside director as stipulated
in the Companies Act. The outside director will supervise
and direct the execution of NEXI’s business with an outside
perspective.

◦Audit & Supervisory Board
The Audit & Supervisory Board undertakes the decision-making
process of the directors and supervises the execution of the

The Corporate Governance Committee is a conference bodycomposed of executive officers and others, and deliberates
important issues concerning corporate governance and internal
control of the company.

Government Involvement
NEXI is a 100% government owned company, and we operate
our trade and investment insurance business under the controlof supervision by the competent minister and inspections by the
Board of Audit and the competent ministry, etc.

Internal Control Principles
In accordance with the Companies Act, NEXI has establishedInternal Control Principles, defined by the Board of Directors
necessary to ensure proper operation of the company.
Establishment of internal rules and development of proper
operation systems are carried out according to the Principles.

Compliance
As a policy-based financial institution responsible for the tradeand investment insurance system, NEXI regards compliance as
one of our most important management issues to stay aware of14

Annual Report FY2017

our public mission and social responsibility by observing the laws
and regulations to operate always with a sense of fairness. The
following are the initiatives we follow:

Compliance Status Monitoring by the
Corporate Governance Committee◦ N EXI conducts education and awareness-raising activities
on compliance under its basic policy so that all executive
officers and staff members (including dispatched workers)
conduct their tasks in compliance with the applicable laws andregulations and the Articles of Incorporation, in a sound andappropriate manner.

◦ NEXI’s Corporate Governance Committee (mentioned above) is
a conference body with the purpose of deliberating importantcompliance issues, and monitoring compliance system
implementation status.

◦ N EXI stipulates internal rules concerning confidential
information management, information security policies andother information management by developing a frame toappropriately store and manage confidential information andinformation assets, and strives to disseminate and thoroughly
comply with our compliance rules.

Compliance and Promotion◦ A t NEXI we have a department and director in charge ofcompliance issues to work on the improvement of compliancesystems and promoting awareness among executive officers
and staff members.
◦ NEXI establishes a reporting route so as to detect and address
important issues concerning compliance at an early stage
so that necessary measures can be carried out. NEXI is also
equipped with an effective internal reporting system with proper
management.

NEXI’s Business◦ N EXI prepares a compliance manual which outlines basic
matters concerning compliance that should be known
by the executive officers and staff members as well as
important laws and regulations which must be observed. The
manual also provides a comprehensive explanation on ourinternal compliance-related rules to help promote a better
understanding pertaining to compliance issues among our
executive officers and staff members.

About NEXI

Maintaining Awareness andThoroughness of Compliance Rules

Policy for Antisocial Forces◦ NEXI does not and will not have any relation with antisocial
forces, and will counter antisocial forces with resolute attitude
as an organization, and will not give in to unfair or illegal
demands made by such forces.

Risk Management◦Insurance Underwriting Risk

◦Cash Management / Liquidity Risk
NEXI’s funds are reserves necessary for payment of future
insurance claims.
In light of this nature of our funds, while aiming for
appropriateness and efficiency, we give the greatest priority toensuring high safety and certainty in our cash management
so as to be prepared for responding to claim payments withappropriate timing and amount.

◦Operational Risk
NEXI has created a system to appropriately report and respondto risks such as operational risks that come up during routine
operations and to implement preventive measures.
Also, in order to enhance the effectiveness of operational risk
management, we foster an organizational culture of sharing
the risk awareness of executive officers and staff members at
various venues including the Corporate Governance Committee
and valuing discipline in one’s behavior.

FY2017 Financial Results

At the time of underwriting, NEXI conducts risk assessment
based on various data collected by our credit department,
overseas offices, and specialized research organizations, inaddition to information received through our customers by ourunderwriting departments. Further, we monitor the status of
debtor countries, the creditworthiness of business counterpartsand projects, to reflect any detected changes in credit
conditions on our underwriting criterion.
In addition to credit management of each project, we also grasp
our risk exposure for our entire portfolio. In order to promote
the sound development of trade and investment insurance, we
maintain and expand our insurance underwriting capacity byceding out a portion of our accumulating risk.

FY2017 Review of Performance

As the sole specialized institution responsible for the tradeand investment insurance business in Japan, it is our intention toprovide security to even more customers who conduct foreigntransactions, and to promote efforts in implementing the growthstrategy of Japan by proactively responding to the diverse needsof our customers. In order to fulfill our future social roles, NEXI
has constructed the following framework for appropriate risk
management.

◦Large-Scale Disaster Risk
With the recognition that risks arising from large-scale disasters
can be a serious risk in terms of business management, NEXI
formulates a Business Continuity Plan to avoid and minimize
the impact of large-scale disasters on our business and, inthe event we are struck with a disaster, to enable us a quick
recovery in our state of operation to the extent possible.

Annual Report FY201715

About NEXI

Organization Chart(as of February, 2019)
General Management andPublic Relations Group

Personnel Group
GeneralManagement andAdministration
Department

Procurement andAdministration Group

Treasury Group
Policy Contract GroupAccounting Group

Policy Coordination
Group
Corporate Planningand Policy OfficeInternal Audit Group

Environmental
Guideline Examiner

Audit & Supervisory Board Members
Audit & Supervisory Board

Environmental
Guidelines Examiner
Secretariat

Audit Secretariat

Board ofDirectors

Policy and Legal Group
Risk Management Group
Financial Management andReinsurance Group

Business Process Management Group
Business Process
and IT Management
OfficeInformation System Group
Project Management Group
Customer Support Group

Evaluation
Committee

General Meetingof Shareholders

Corporate
Governance
Department

Corporate Planning andInternational Relations Group

Underwriting
Department
Chairmanand CEO

Comprehensive Insurance Group
Overseas Investment Insurance
Underwriting Group

Reinsurance Underwriting GroupManagement Group

Independent Accounting Auditor

Corporate
Management
Committee

Corporate GovernanceCommittee

Structured andTrade FinanceInsurance
Department

Power Group
Natural Resources Group I
Natural Resources Group II
Infrastructure Group

Asset Management
Department

Claims Service Group
Recovery Group
Credit Analysis Group

Personnel Committee

Credit Department

Environment GroupCountry Risk Analysis Group
Credit Administration Group

Osaka Branch

Underwriting Group

Singapore BranchOverseas Office16

Annual Report FY2017

Paris Representative Office
New York Representative OfficeAbout NEXI

Access Map
Head Office

Singapore Branch

Chiyoda First Bldg., East Wing,
5th Floor, 3-8-1 Nishikanda,
Chiyoda-ku, Tokyo 101-8359 Japan

About NEXI

16 Raffles Quay, #38-06, Hong Leong Bldg.
Singapore 048581
Phone : +65-6429-9582
Fax : +65-6222-0481

Phone : +81- (0) 3-3512-7650
Fax : +81- (0) 3-3512-7660

JR Suidobashi Sta.

ve.
san A

NEXI Singapore

NEXI

NEXI’s BusinessChiyoda First Bldg.
EAST Wing

y

e.
Av

sswa

jiro
Me

Expre

.
t Ave
i Wes

olitan

h
obas

Haku

East
Exit

West
Exit

Suid

op
Metr

JR Chuo Lineine

Sunlight Bldg.

Kitanomaru Square

A4
Exit

Paris Representative Office

ita L

A2
Exit

ay M

ne

i Li
No.7 Exit

Villa Fontaine
Kudanshita

Senshu Univ.
No.5
Exit

ubw

oza
oT

etr

M
yo

Tok

S
Toei

Ohara
Bookkeeping
SchoolToei Subway
Shinjuku Line

Subway Jinbocho Sta.

ita Sta.
KudanshJohnan Shinkin Bankni Ave.

Sendaimae
Crossing

YasukuTokyo Metro
Hanzomon Linec/o JETRO 27, rue de Berri 75008 Paris, France
Phone : +33- (0) 1-4261-5879
Fax : +33- (0) 1-4261-5049

Osaka Branch
FY2017 Review of Performance

Aioi Nissay Dowa Insurance
Yodoyabashi Bldg., 8th Floor, 3-1-22
Kitahama, Chuo-ku, Osaka City,
Osaka 541-0041 JapanNEXI Paris

Phone : +81- (0) 6-6233-4019
Fax : +81- (0) 6-6233-4001

New York Representative Office

47th Street

Osaka City Office

NEXI, Osaka

46th Street

Aioi Nissay Dowa Insurance
Yodoyabashi Building

Yodoyabashi Sta.
Mizuho Bank

45th Street
44th Street

Keihan Line
Penn Station
Port Authority

43th Street
42th Street

B.D.F.M 42 street/6th Avenue

Fifth Avenue

Yodoyabashi Sta.

Higobashi Sta.

MizunoMidosuji St.

Bank of JapanNEXI NY

Park Avenue

Oye Bridge

B.D.F.M 47-50 street/6th Avenue
Rockefeller
Center
48th Street

Vanderbilt Avenue

Hanshin Expressway Loop Line

Phone : +1-212-819-7769
Fax : +1-212-997-0464

Madison Avenue

Route 1
Osaka Metro Tanimachi Line

Osaka Metro
Midosuji Line

Yodoya Bridge

Tosabori River
Tosabori Ave,

Kita-Shinchi Sta.

c/o JETRO 565 Fifth Avenue, 4th Floor, New York, NY 10017 USA

FY2017 Financial Results

Dojima River

hiHigaesda Sta.
Um ta.
aS
Umed

JR Tozai Line

Osaka Metro
Nishi Umeda Sta. Yotsubashi
Line

J

ta.

aS

ak

s
RO

Grand
CentralTerminal

4.5.6 42street/Lexington
7 42street/5th Avenue

Annual Report FY201717

NEXI’s Business
Trade and Investment Insurance – How It Works 20
Insurance Products to Support Your Business

21

Application Procedure for Trade andInvestment Insurance

28

International Cooperation

32

NEXI’s Business

Trade and Investment Insurance – How It Works
Trade and investment insurance covers risks pertaining to overseas transactions such as international trade, which cannot be covered byprivate insurance.
The purpose of trade and investment insurance is to support and promote the development of overseas business by mitigating the risks
associated with foreign trade and overseas investment.

Foreign Countries

Governmentof JapanInsurance
Contract

100% Equity

Japanese
Company

Export, Investment,
Financing, etc.

Foreign Companies
Overseas Projects

Trade and investment insurance covers the losses incurred by Japanese companies, banks, etc. due to the occurrence of risks such as:

Political Risk＊

Commercial Risk＊● Restriction or suspension imposed on foreign exchangebanking transactions, restriction or suspension imposedon import● State of war, civil war, revolution, etc.
● Delay in transmitting foreign currency caused by thepaying country● High custom duties imposed, terrorism● Sanctions imposed by UN or foreign countries other thandestination countries● Expropriation● Natural disaster, or any other state of emergency for whichno contracting party has fault● Non-payment by counterparty extending over 3 months(except for cases where the exporter is deemed liable forclaims made by counterparty, such as damages or defects)● Bankruptcy of counterparty● Any cause equivalent to bankruptcy● Unilateral cancellation of export contracts with foreign
governments, etc. before shipment.
(Unilateral cancellation made by private buyers before
shipment is only covered under a separate special policy.)

Occurrence of such events

The following losses will be covered:Pre-shipment risk
Losses incurred due tofailure of shipment

Post-shipment risk

Overseas investment risk

Losses incurred due toLosses on investment assets

failure to collect receivables,
service fees, or loans

as a result of discontinuationor suspension of a joint venture＊ Political Risk: Risks caused by force majeure events for which the contracting parties have no fault (also referred to as Country Risk)＊ Commercial Risk: Risks caused by the fault of the counterparty (also referred to as Credit Risk)

20

Annual Report FY2017

NEXI’s BusinessInsurance Products to Support Your Business
NEXI offers the following array of insurance products:

About NEXI

Insurance Products for Trade
Export Credit Insurance

▶P.22

Insurance for export, intermediary trade andtechnical cooperation
This insurance covers risks such as pre-shipment risks or
non-payment risks pertaining to export, intermediary trade andtechnical cooperation conducted by Japanese exporters.

Insurance for license export

Trade Insurance for Standing
Orders from Specific Buyers

▶P.23

This insurance covers risks such as pre-shipment risks or nonpayment risks that affect Japanese companies who continuallyexport or conduct intermediary trade with specific buyers.

This insurance covers non-payment risks pertaining to export
conducted by Japanese small and medium-sized enterprises(SMEs) and organizations related to the agriculture, forestry andfishery (AFF) sector.

▶P.24

Export Bill Insurance

NEXI’s BusinessThis insurance covers the non-payment risks that affectJapanese companies pertaining to license fees such as royalties
on patents, know-hows, copyrights and others.

Export Credit Insurance for SMEs
▶P.24
and AFF Sector This insurance covers non-payment of documentary bill of
exchange purchased by Japanese commercial banks.

Prepayment Import Insurance

▶P.24

This insurance covers the risks that affect Japanese importers
who are unable to receive the refund of their payment made on
advanced payment terms in the event the shipment does not
arrive.

FY2017 Review of Performance

Comprehensive Export Insurance▶P.23
with Simplified ProcedureThis insurance covers risks such as pre-shipment risks or nonpayment risks that affect Japanese companies who continuallyand repeatedly export or conduct intermediary trade with anumber of buyers.

Insurance Products for Investment and Financing
Buyer’s Credit Insurance

▶P.25

Overseas Untied Loan Insurance ▶P.25
This insurance covers the risks of non-repayment of loans
made by Japanese commercial banks to foreign governments orforeign companies for overseas business or projects, or the risks
of Japanese commercial banks as a guarantor for a loan made byfinancial institutions.

FY2017 Financial Results

This insurance covers the risks of non-repayment of loans
made by Japanese commercial banks to foreign companies forpurchase of goods exported from Japan.

Investment and Loan Insurance for▶P.26
Natural Resources and Energy
This insurance covers the risks of non-repayment of loans madeby Japanese commercial banks to projects which benefit Japanby securing a stable supply of natural resources and energy orprotecting the rights and interests in natural resources owned by
Japanese companies.

Overseas Investment Insurance

▶P.27

This insurance covers the risks pertaining to foreign investments(equity investments, etc.) made by Japanese companies.

Annual Report FY201721

NEXI’s BusinessInsurance Products to Support Your BusinessExport Credit Insurance
Insurance for export, intermediary trade, and technical cooperation
This insurance covers losses incurred by frustration of the export contract or uncollectibility of trade accounts, due to i ) force majeuresuch as war, revolution, terrorism, import restrictions/prohibition, or natural disaster, ii ) bankruptcy or default of counterparty, when
Japanese exporters export goods, conduct intermediary trade, or provide technological services.

ExportExport Credit
Insurance
Unableto export

Japanese
exporter××

Foreign
Importer

Unable to collectreceivables

Intermediary Trade

Foreignmanufacturer(Country A)
Unable to ship

×Japanese
Intermediary
Trader×

Foreignimporter(Country B)
Unable to collectreceivables＊ (Note) W e offer Export Credit Insurance in two separate ways:“Specific Insurance” provides cover for a single business contract, whereas, “Comprehensive Insurance (for business entities)”
which provides cover for all business contracts within the scope described in the policy for the entire company.

Insurance for License Export (Intellectual Property License Insurance)Intellectual Property License Insurance covers losses incurred when a Japanese company that provides patents, know-hows, andcopyrights abroad is unable to collect payment of license fees such as royalty due to ( i ) force majeure including war, ( ii ) bankruptcy ordelay in payment by the business counterpart.

22

Annual Report FY2017

Trade Insurance for Standing Orders from Specific Buyers

Trade Insurance forStanding Orders
from Specific Buyers

Scope of coverage
provided by NEXIThis insurance is suitable for transactions with a buyer or buyers
to whom a Japanese exporter repeatedly supplies products.

Credit risk ofexporter’s subsidiaryis not covered

The features of this insurance are as follows:(Note) The risks covered by this insurance are equivalent to those of Export
Credit Insurance.

Country B
Buyer ①Country B
Buyer ②

Country B
Buyer ③
(Subsidiary)

Country A
Buyer

Japanese
ExporterInsurance cover isunavailable
depending on
country category or
buyer category.

Country A
off-coverBuyer

due to buyer
category

Country C
off-cover
Buyer

NEXI’s Business◦ Simplified application procedures: This insurance does not
require insurance application for each export contract. All
insurable export contracts made during the insurance contract
period are automatically covered.

Country B
Buyer ④

Scope of coverage desired by exporter◦ Setting an insurance claim payment limit to each buyer basedon the estimated transaction value for the year with the buyer.

About NEXI

Insurance for companies who
continually transact business withspecific buyers

due to country
category

Insurance for companies who transact
continually and repeatedly to a numberof buyers

Scope of coverage
provided by NEXICountry A
Buyer ①Country A
Buyer ②
Japanese
Exporter

FY2017 Financial Results

This insurance comprehensively covers all export/intermediary
trade transactions concluded between the Japanese exporter andselected buyers who have continuous and repeated business.
The exporter determines the volume of business he wishes to becovered by estimating and totaling the annual amount of businesswith each exporter. With this insurance the exporter is able toreceive approval for cover retroactively by notifying NEXI of theshipping information, instead of placing insurance applicationfor each particular export transaction prior to shipment. The
application procedures are much simpler and with less frequency
compared with other export credit insurances.

Comprehensive Export
Insurance with
Simplified Procedure

FY2017 Review of Performance

Comprehensive Export Insurance with Simplified Procedure

Country B
Buyer ③(Note) The risks covered by this insurance are equivalent to those of Export
Credit Insurance.

Credit risk of exporter’s subsidiary is not covered.
Insurance cover is unavailable depending on country
category or buyer category.

Annual Report FY201723

NEXI’s BusinessInsurance Products to Support Your BusinessExport Credit Insurance for SMEs and AFF Sector
Insurance for supporting exports
conducted by Japanese SMEs andthose engaged in the business ofagriculture, forestry and fishery
Export Credit Insurance for SMEs and AFF Sector exclusively
supports the export activities of Japanese small and mediumsized enterprises ( SMEs ) and organizations related to agriculture,
forestry and fisheries ( AFF Sector ) . It covers losses incurred due
to inability to collect receivables. Simple application procedures
and speedy payment of insurance claims are implemented tocater to the needs of SME and AFF customers. Furthermore,
applicants of this insurance who wish to receive a loan may
simultaneously apply for a creation of pledge on the right to claim
insurance.

ExportJapanese
SME or
AFF
organization

×

Foreign
Buyer
Unable tocollect receivables

Loan

Export Credit
Insurance
for SMEs
and AFF Sector

Creation of Pledge

Japanese
Bank

Export Bill InsuranceThis insurance covers losses caused by the buyer’s
nonpayment of matured bill of exchange and suffered by aJapanese commercial bank that purchases documentary bills of
exchange drawn without an L/C for export payments. The losses
may be incurred when the bank is unable to collect money due
to the nonpayment of the bill caused by ( i ) force majeure suchas war, revolution, suspension of foreign currency exchange,suspension of remittance, natural disasters or ( ii ) bankruptcy ordefault of a foreign importer.

Export Bill Insurance
Send Bill

JapaneseBank

Application
for Negotiation

Japanese
Exporter(Drawer)×

Foreign
Collecting
Bank
Unable to Remit×Presentation of Bill
Insolvency

Export Contract

Foreign
Importer(Drawee)

Prepayment Import InsuranceThis insurance covers losses incurred by a Japanese importer who paid for goods in advance in accordance with the contract terms
but could not receive the goods on the due date and could not receive a refund for the prepaid money despite a request, due to ( i ) force
majeure such as war, revolution, prohibition of foreign currency exchange, suspension of remittance and natural disasters, or ( ii ) bankruptcy
or default in the performance of obligation by the counterparty.

24

Annual Report FY2017

Buyer’s Credit Insurance
About NEXI

Insurance for loans, etc. such as forpayment of export goods(Buyer’s Credit)
Buyer’s Credit Insurance
Loans, etc.

JBIC＊
JapaneseBank×Unable to Repay
Export Contract

Japanese
Exporter

Foreign
Importer

NEXI’s BusinessThis insurance covers losses suffered by a Japanesecommercial bank or financial institution as a result of providing
loans, etc. ( including bond purchase and surety obligation ) toa foreign importer who purchases goods and services from aJapanese exporter. Losses may be incurred when the Japanesecommercial bank is unable to receive repayment of the loans orbonds due to ( i ) force majeure such as war, revolution, prohibitionof foreign currency exchange, suspension of remittance andnatural disaster or ( ii ) bankruptcy or default of the importer. The
financial terms and conditions for the loan agreements, etc. must
be in line with international agreements. ( See page 34. )＊ NEXI provides the insurance only to Japanese commercial banks who extend
loans etc. in cooperation with the Japan Bank for International Cooperation(JBIC).

Overseas Untied Loan Insurance
Insurance for loan or bond purchasefor overseas business or projectOverseas Untied
Loan Insurance
Loan/Purchase of Bonds

Japanese
Companyor Bank＊×

Foreign
Government
or Foreign
Company
Unable to Repay

Insurance for guarantee of obligation

Overseas
Untied Loan
Insurance

Japanese
Companyor Bank＊

FY2017 Financial Results＊NEXI may provide cover to foreign companies or banks, etc. who finance theprojects which are particularly needed for the purpose of promoting the sounddevelopment of Japan’s external transactions ( e.g. projects which promote
important resource acquisition or which promote Japanese companies’
competitiveness ) .

Bank

×

This insurance covers losses suffered by a Japanese company
or commercial bank＊ that extended guarantee to the borrowings,
etc. by its overseas subsidiary, a foreign government or company( borrower ) . The losses may be incurred when the guarantor
fulfilled the obligation because of the failure of the borrower
to repay its borrowings due to ( i ) force majeure such as war,
revolution, prohibition of foreign currency exchange, suspensionof remittance and natural disaster or ( ii ) bankruptcy or default.

FY2017 Review of PerformanceThis insurance covers losses suffered by a Japanese company
or commercial bank＊ that provided a foreign government orcompany with business funds untied to exports from Japan foroverseas projects which contribute to economic development
or that purchased bonds issued by a foreign government orcompany for the purpose of financing. The losses may be incurred
when the Japanese company or commercial bank is unable tocollect the loan or when bonds are not redeemed due to force
majeure including war, revolution, prohibition of foreign currency
exchange, and suspension of remittance or bankruptcy or defaultof the borrower or the bond issuer.

Loans,
etc.

Unableto Repay

ForeignCompany

Debt Guarantee(Overseas Subsidiary,
Joint Venture, etc.)

合弁会社等 ）
（海外子会社や

Annual Report FY201725

NEXI’s BusinessInsurance Products to Support Your Business

Investment and Loan Insurance for Natural Resources and Energy
This insurance covers risks linked to overseas resources development projects. NEXI further strengthens support for Japanesecompanies’ activities from a perspective of securing a stable natural resource supply. Reflecting the project’s risk profile, the insurance
features lower premium rates and a wide range of risk coverage compared to ordinary Overseas Untied Loan Insurance. This insurance isavailable as a special clause added to the Overseas Untied Loan Insurance.
The insurance covers losses suffered by a Japanese company or bank that provides a foreign government or company with businessfunds (untied to exports from Japan) to be used for projects related to resource development. Losses may be incurred when the Japanesecompany or bank is unable to collect the loan due to force majeure including war, revolution, prohibition of foreign currency exchange, andsuspension of remittance, or bankruptcy and default of a borrower.

Japan

Overseas resource project company

Off-take

Borrowings

Energy andresources

Lending

Off-taker
Production
facility Mining
concession

JapaneseBank

Subordinatedloan
Shareholder’sequityLoan Insurance for Natural
Resources and Energy

Overseas Untied
Loan Insurance

Proceeds from resource sales

Escrow Account at afirst-class bankin developed countries

Repayment◦ A senior loan should be made by Japanese banks or financial institutions for energy and resource
projects by Japanese companies.
◦ Generally, the establishment of an escrow account at a first-class bank in a developed country is
required.
◦ Lower premium rates and higher coverage are provided compared to ordinary Overseas Untied Loan
Insurance (OULI).

26

Annual Report FY2017

Overseas Investment Insurance
About NEXI

Insurance for investment(equity investment, etc.)
This insurance covers losses suffered by a Japanese company
with a subsidiary or a joint venture in a foreign country. The losses
are incurred when the relevant subsidiary or the joint venture isforced to discontinue business due to force majeure such as war,
terrorism and natural disasters. The insurance also covers losses
incurred when a Japanese company is unable to remit dividends
to Japan due to prohibition of foreign currency exchange orsuspension of remittance.

Overseas Investment Insurance
Investment

Japanese
Company

ForeignCompany(Overseas Subsidiary,
Joint Venture, etc.)×

Unable to Remitof× Discontinuation
Business Activities＊ NEXI can provide cover for premium (goodwill, etc.) paid by an investor tosecure a stake in natural resources or to become a shareholder.

NEXI’s Business

When a Japanese subsidiary establishes sub-subsidiaries in a
number of countries, one sub-subsidiary’s business failure due toforce majeure such as war, terrorism and natural disasters can berecognized as an insured event and insurance claims will be paid,
regardless of the other sub-subsidiaries’ performance.

Overseas
Investment
Insurance

Overseas
Investment Insurance
Country Y

Country A

Investment

×

Investment

of
×Discontinuation
Business Activities

Subsidiary

FY2017 Review of Performance

Japanese
Company

SubSubsidiary
A

Country B

Investment

When a Japanese subsidiary in a foreign country establishes
a number of sub-subsidiaries in the same country, one subsubsidiary’s business failure due to force majeure such as war,
terrorism and natural disasters can be recognized as an insured
event and insurance claims will be paid, regardless of the othersub-subsidiaries’ performance.

Overseas
Investment Insurance
Country Y

Investment
出資

×

Investment

Japanese
Company

Subsidiary

FY2017 Financial Results

Overseas
Investment
Insurance

SubSubsidiaryB

SubSubsidiary
Aof
×Discontinuation
Business Activities
Investment
出資

SubSubsidiaryB

In addition to the above mentioned Overseas Investment Insurance, which mainly provides cover on investments (equity investment, etc.),
there is another type of Overseas Investment Insurance which covers rights and acquired profits (real estate, etc.).
Annual Report FY201727

NEXI’s Business

Application Procedure for Trade andMaking an application
The chart below describes the summary of application procedures for Export Credit Insurance.

Consideration of whether or
not to use insurance

Presentation of estimatedpremium amount

Annual Report FY2017

Buyer credit review /Credit rating registration

28

Alreadyregistered

As it may take some time tocomplete our review, please makesure you consult with us well inadvance. Especially, in the case ofloan agreements or overseas
i n v e s t m e n t s w i t h re p a y m e n t
periods exceeding two years, we
determine whether or not we canaccept your insurance applicationby conducting an investigation ona case by case basis, and thus
prior consultation at an early stage
is very important.

Not yetregistered

Foreign buyer registration

Trade insurance user (shipper)
registration

Prior consultation

Prior Consultation

Trade Insurance User
(Shipper) Registration

Foreign Buyer
Registration

If you are a first-time user of Export
Credit Insurance, it is necessary toregister for an Insurance User Code
(Shipper Code).

Before applying for our
insurance, registration ofyour business counterpart(counterparty to export
contract or payer including
an ILC bank) is necessary.

＊ If you have your shipper code already,re-registration is not necessary.

Investment Insurance
About NEXI

Insured period

Post-shipment
periodPayment due date /Last day of insured periodPre-shipment
periodDate of shipment

First day of insured period

Insurance application date /Insurance contract date

Date of export contract

Elimination
Period(5 days)

Coverage fornon-payment risks

NEXI’s Business

Coverage forpre-shipment risks

FY2017 Review of Performance

Insurance Application
PeriodThe application period is 5
business days from the shipment
date (after the contract date). The
insurer’s obligation period starts
after the application.

FY2017 Financial Results

For more information or inquiries,
please contact us at the phone numbers below:
Head Office Underwriting Department
Customer Service Group
Toll Free 0120-671-094
Comprehensive Insurance Group Toll Free 0120-675-094
Osaka Branch Office
Underwriting Group

Toll Free 0120-649-818

You will also find more information on
the procedures on our website.（https://www.nexi.go.jp）

Annual Report FY201729

NEXI’s Business

Application Procedure for Trade and Investment Insurance

Insurance claim payment
The chart below describes the summary of procedure for Export Credit Insurance.

Delegation of Authority to Exercise Rights
At the time of making insurance claims, the insured needs todelegate authority to NEXI in exercising all rights as creditor underthe export contract. (For other types of insurance, the delegationof authority may be needed after claims payment.)

Covenant for loss prevention

Notification of insured
event

When you become aware of any
event that may lead to a loss
before the payment or repayment
due date, you must notify NEXI ofthe event within 15 days (or within
1 month for some insurance
types).

When you become aware thatyou have suffered a loss, you must
notify NEXI of the occurrence ofthe loss within 1 month (or within
45 days for some insurance
types).

Deadline for insurance claim

Delegation of authority to NEXI

Claim for insurance

Deadline for notification ofloss event

Occurrence of insured event

Occurrence of event that
may lead to loss

Insurance contract date

Notification of event that
may lead to loss

Claimspayment

In principle, claims
payment will be madewithin 2 months fromthe date of insurance
claim.

“Paris Club” ─ as a solution for debt recovery
The Paris Club is a meeting where major creditor countries gather to discuss and find workable solutions to payment problems
faced by debtor nations. Since its inception in 1956, as a gentle informal group with no legally binding force, the Paris Club carries
out their activities based on the rules and principles of the club.
At the Paris Club, debt relief (rescheduling etc.) is discussed with the government of the debtor country where debt payment
has become difficult. Through such debt relief and rescheduling, creditor countries will be able to ensure their recovery fromcountries without adequate foreign currency, although the repayment schedule may be prolonged, while maintaining fairness
among all creditor countries concerned.

30

Annual Report FY2017

About NEXI

Maximize

NEXI’s Business

Expedite

Enhance efficiency
Recovery stage

Ensuring recovery
utilizing various meansof recovery

Distribution of recoveries

Termination ofrecovery activity

Determination of appropriate recovery policy
FY2017 Review of Performance

After insurance claims are made by the insured, recovery policy is made by NEXI.

Parties to conduct actual recovery●

NEXI and the government of Japan (Negotiations with the debtor country at Paris Club, etc.)●

NEXI’s partner collection agencies●

InsuredCovenant for the insured (NEXI customer) to cooperate inrecovery efforts●●

When the insured is instructed from NEXI to take necessary measures for recovery, the insured
has an obligation to fulfill the instruction. (Cooperation for recovery)
Even in cases where actual recovery activities are conducted by NEXI’ s partner collection
agencies, NEXI may request the insured to cooperate in the recovery efforts. (The cooperation
requested may differ according to type of insurance.)

Approval for assigning the uncovered portion of theParis Club rescheduled claims
In order to benefit our customers by enhancing their asset
management efficiency and as well as reducing the costs related
to their debt management, we may provide conditional approval
to our customers who choose to transfer the uncovered portionof their debt to a third party by assignment.

FY2017 Financial Results

Recovery related arrangement

For more information, please contact
us on the following numbers:
Asset Management Department
Toll-Free 0120-673-094
Claims Service Group
03-3512-7663
Recovery Group
03-3512-7658

Annual Report FY2017

31

NEXI’s Business

International Cooperation
In order to correspond with the diversified needs of our customers,
NEXI establishes international cooperative networks with related
institutions abroad.

One-Stop-Shop Reinsurance
For cases where a Japanese company jointly participates in a
project in a third country with foreign companies, NEXI concludes
OneStop-Shop Reinsurance Agreements with major overseas export
credit agencies (ECAs) for the purpose of underwriting risks for the
portion exported from Japan.
Through the development of this reinsurance structure, when aJapanese company forms a consortium with foreign companies forexport to a third country, the foreign companies can conclude aninsurance contract with their own country’s ECA for the total amountof export contract including the portion exported by the Japanesecompany. Then NEXI provides reinsurance to the foreign ECA for the
portion exported by the Japanese company.

EuropeOne-Stop-Shop Reinsurance Agreements
Italy
Servizi Assicurativi Del Commercio Estero (SACE)
Netherlands
NCM ＊ 1
Belgium
Ducroire/Delcredere (ONDD) ＊ 2
Germany
Hermes Kreditversicherungs-Aktiengesellschaft (HERMES) ＊ 3
Austria
Oesterreichische Kontrollbank Aktiengesellschaft (OeKB)FranceCOFACE (private sector)
Finland
FINNVERA PLC (Finnvera)
Spain
Compañía Española de Seguros de Crédito a la Exportación (CESCE)
Switzerland
Swiss Export Risk Insurance (SERV)
Czech Republic Export Guarantee and Insurance Corporation (EGAP)UK
UK Export Finance (UKEF)
Short-term Reinsurance Agreements
RussiaFranceProviding reinsurance
for the portion of exportby a Japanese company

Foreign
ECA

Providing export
credit insurance
for the entire
export transaction

Russian Agency for Export Credit and Investment Insurance (EXIAR) 2016

Cooperative Agreements

ExportJapanese
Company

2002
2002
2002
2003
2003
2003
2004
2005
2007
2017
2017

UK

DREE
Banque Publique d'Investissement (BPifrance)
Export Credits Guarantee Department (ECGD) ＊ 4

1995
2016
1995

Consortium
agreement
Exportcontract

Third
Country
Buyer

ForeignCompany
ExportShort-term Reinsurance Agreement
NEXI has concluded reinsurance agreements with ECAs in Asiaand other regions in order to support export to third countries byJapanese companies located in Asian and other countries. Thisagreement elevates the underwriting capacity of ECAs in Asia andother regions and further facilitates Japanese companies to utilize
export credit insurance of ECAs in Asia and other regions to mitigate
their international trade risks.
Reinsurance contract

ECAs inothercountries

AfricaExport Credit Insurance
Japanese
Affiliate
Company

Cooperative Agreements
South Africa

Export Credit Insurance Corporation (ECIC SA)

2005

Buyer
Export, etc.

Middle East

Reinsurance with European and US
privatesector insurers
To respond to the economic crisis in Europe and other regions,
NEXI has started to enhance underwriting capacity through short-term
reinsurance agreements with private-sector insurers.

Cooperative Agreements
IsraelAbu Dhabi
Iraq
Iran
TurkeyOther Cooperative Relations
NEXI has built long-term relationships with Ber ne Union
members and international organizations through memorandums ofunderstanding (MOUs) and other agreements.

32

Annual Report FY2017

Israel Foreign Trade Risks Insurance Corporation (IFTRIC)
Mubadala Development Company PJSC (MDC)
Ministry of Finance of Iraq /Trade Bank of Iraq (TBI)
Ministry of Economic Affairs and Finance of the Islamic Republicof IranExport Credit Bank of Turkey (TURK EXIMBANK)

1997
2008
2011
2016
2017

North America
Germany

＊3

1996
2011
1996
1996
1996
1996
1997
2000
2007
2009
2009
2009
2013
2015
2015

One-Stop-Shop Reinsurance Agreements
USA
Export-Import Bank of the United States (US EXIMBANK)

2004

Short-term Reinsurance Agreements
CanadaExport Development Canada (EDC)2012

About NEXIHERMES / C&L
KfW Bankengruppe (KfW)
Austria
Oesterreichische Kontrollbank Aktiengesellschaft (OeKB)
Italy
Servizi Assicurativi Del Commercio Estero (SACE)
FinlandFinnish Guarantee Board (FGB) ＊ 5
Netherlands
NCM ＊ 1
Belgium
Ducroire/Delcredere (ONDD) ＊ 2
Spain
Compañía Española de Seguros de Crédito a la Exportación (CESCE)
Uzbekistan
Uzbekinvest National Export Import Insurance Company(UZBEKINVEST)
UkraineThe State Export-Import Bank of Ukraine (UKREXIMBANK)
RussiaBank for Development and Foreign Economic Affairs (VEB)
BelarusBelarusbank
RussiaRussian Agency for Export Credit and Investment Insurance (EXIAR)
Turkmenistan The State Bank of Foreign Economic Aﬀairs of Turkmenistan (TFEB)
Czech Republic Export Guarantee and Insurance Corporation (EGAP)
Kazakhstan
State Insurance Corporation for the Insurance of Export Credit andInvestment (KEG) ＊ 6

Cooperative Agreements
USA
CanadaUSA

Export-Import Bank of the United States (US EXIMBANK)
Export Development Canada (EDC)
The United States Department of Energy (DOE)
Overseas Private Investment Corporation (OPIC)

1991
1997
2009
2017

South America
Cooperative Agreements
Brazil

2016

2008
2008
2009
2017

NEXI’s BusinessCompanhia Valedo Rio Doce (VALE)
Petroleo Brasileiro S.A. (PETROBRAS)
Banco Nacional de Desenvolvimento Economico e Social (BNDES)
Brazilian Guarantees and Fund Managements Agency (ABGF)＊ 1. NCM=Currently ATRADIUS ＊ 2. ONDD=Currently Credendo＊ 3. HERMES=Currently EULER HERMES GERMANY ＊ 4. Its official name is ECGD
＊ 5. FGB=Currently FINNVERA ＊ 6. KEG=Currently Kazakh Export

FY2017 Review of Performance

One-Stop-Shop Reinsurance Agreements
Short-term Reinsurance Agreements
Cooperative Agreements＊ In classifying the country regions on the map, the color-code
represents multiple types of cooperative relations for somecountries: If a country is a “One-Stop-Shop Reinsurance partner”
and a “Cooperative partner” the color-code for “One-Stop-Shoppartner” is used. If a country is a “Short-term Reinsurance partner”
and a “Cooperative partner” the color-code for “Short-term
Reinsurance partner” is used.

Asia / Oceania
One-Stop-Shop Reinsurance Agreements
Australia
Korea

Export Finance and Insurance Corporation (EFIC)
Korea Trade Insurance Corporation (KSURE)

2004
2006
2009
2009
2010
2012

Reinsurance Agreements with European and
U.S. private-sector insurers
Euler Hermes Deutschland AG (private sector)
COFACE (private sector)
American International Group, Inc. (AIG)
Tokio Marine HCC (HCC)

Korea
Singapore
TaiwanIndonesia
China
VietnamIndonesia

Korea Export Insurance Corporation (KEIC) ＊ 7
ECICS Limited (ECICS)
Taipei Export-Import Bank of China (TEBC)
Asuransi Ekspor Indonesia (ASEI)
China Export and Credit Insurance Corporation (SINOSURE)PETROVIETNAM
Ministry of Finance of Vietnam
PT Pertamina (Persero)

1994
1997
2005
2008
2009
2010
2014
2015

FY2017 Financial Results

Short-term Reinsurance Agreements
Singapore
ECICS Limited (ECICS)
Malaysia
Export-Import Bank of Malaysia Berhad (MEXIM)
Indonesia
Asuransi Ekspor Indonesia (ASEI)
ThailandExport-Import Bank of Thailand (THAI EXIMBANK)
TaiwanTaipei Export-Import Bank of China (TEBC)
Hong Kong
Hong Kong Export Credit Insurance Corporation (HKECIC)

Cooperative Agreements
2005
2011

＊ 7. KEIC=Currently KSURE

International Organizations
Cooperative Agreements
2013
2014
2015
2016

The European Bank for Reconstruction and Development (EBRD)
Export Credit Agencies and Export Financing Institutions of APEC
(12 countries and 15 organizations)
Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC)
Multilateral Investment Guarantee Agency (MIGA)

1997
1997
2008
2018

Annual Report FY2017

33

Topics

Organization for Economic Co-operation andDevelopment (OECD)1W
 orking Party on Export Credits and Credit Guarantees(ECG Meeting and Participants Meeting)

OECD was established in 1961 to discuss various issues of global economy and Japan has been a member
since April 1964. The Working Party on Export Credits and Credit Guarantees (ECG) operates under the OECD
Trade Committee, exchanging information and discussing issues related to official export credits including insurance
provided by NEXI. In addition to discussion on financial conditions for officially supported export credits, ECG has
also focused on responsibility of export credit agencies (ECAs) on social issues such as the environment, climatechange, anti-bribery and sustainable lending.
As a Japanese ECA, NEXI is actively participating in the discussions in cooperation with the Japanese government
such as METI.

2 Arrangement on Officially Supported Export Credits
The financial terms and conditions for export credits are set out in the OECD Official Export Credits Arrangement
to provide a framework for the orderly use of export credit and to foster a level playing field. The Arrangement
prescribes the terms and conditions such as the minimum premium rate, down payment, maximum repayment term,
minimum interest rates, and repayment profiles in providing export credit. In addition to the Arrangement, sectorspecific terms that reflect the characteristics of each sector may apply in the sectors such as ships, nuclear power
plants, civil aircraft, rail infrastructure, renewable energies, climate change mitigation and adaptation, water projects,
and project finance. NEXI provides export credits in line with the Arrangement.

3 Approaches to Environmental Issues
Since the development of OECD Council Recommendation on Common Approaches to the Environment andOfficially Supported Export Credit in 2001, revisions have been made to reinforce the Common Approaches,
including the third revision made in June 2012. Based on the OECD Approaches, NEXI has established theEnvironmental and Social Consideration Guidelines in Trade Insurance to encourage the appropriate environmental
and social considerations on projects covered by its insurance.

4 Anti-bribery Measures
Based on the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions
adopted in 1997 and the OECD Council Recommendation on Bribery and Officially Supported Export Credits in2006, created to combat bribery in officially supported export credits, NEXI is taking appropriate measures against
bribery in international business.

34

Annual Report FY2017

FY2017 Review of Performance
Performance Highlights

36

Review of Performance

42

Business Overview46

Underwritten Projects

52

Underwritten Projects (SMEs related)

58

FY2017 Review of Performance

FY2017 Performance Highlights
Export trends
Japan's export value in FY2017 rose by 10.8% to JPY 79.2 trillion compared to the previous fiscal year, the first increase in two years.
This is mainly due to an increase in the car, semiconductor equipment and steel exports. Looking at the results by region and country, its
export value to Asia rose by 13.1% to JPY 43.4 trillion, including that to China which increased by 18.3% to JPY 15.2 trillion. Exports to
the U.S. and EU also rose by 7.5% to JPY 15.2 trillion and by 11.0% to JPY 8.9 trillion, respectively. Meanwhile, those to the Middle Eastdecreased by 4.4% to JPY 2.4 trillion.
Japan's export value

Total Export Value
Year-on-Year Change（%）（Millions of Yen）

FY2013

FY2014FY2015FY2016FY201770,856,464

74,667,048

74,115,132

71,522,248

79,222,634

10.8

5.4

（0.7）

（3.5）

10.8

（Source: Trade Statistics, Ministry of Finance）

Trends of Trade and Investment Insurance Program（Billions of Yen）

300

200

100

0
‒100
Outstanding Borrowings
JPY 0

‒200
‒300

Peak of
Insurance Claims
Payments
JPY 341.9 billion

‒400
‒500
‒600

Peak of
Outstanding Borrowings
JPY 688.6 billion‒700
Fiscal Year

Premium income

Recoveries andother income

Claims paid

Outstanding borrowings
at year-end’81 ’82 ’83 ’84 ’85 ’86 ’87 ’88 ’89 ’90 ’91 ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17

Premium
32.8 37.3 34.1 41.3 46.8 33.4 30.4 21.3 34.2 44.8 35.7 44.7 46.2 44.1 43.5 41.0 46.0 45.4 33.2 32.9 37.3 31.3 43.2 38.0 43.8 34.9 36.8 39.3 38.2 34.4 37.7 36.2 40.6 74.6 51.2 24.5 72.8
incomeRecoveries and 5.5 12.3 15.2 25.6 38.9 53.6 34.9 40.0 69.3 38.7 40.7 111.2 77.3 85.2 98.3 121.2 123.0 91.3 84.6 85.3 74.5 70.2 97.7 101.4 228.7 247.3 57.5 41.9 20.5 15.6 17.7 24.0 31.4 35.7 40.9 44.5 31.3
other income
Claims paid

37.6 62.7 80.5 141.5 164.3 169.0 109.5 164.8 142.7 198.6 341.9 148.2 128.0 80.6

Outstanding borrowings at year-end

ー

ー

ー

57.1 44.4 30.2 16.7 21.6 32.4 49.9 65.1 23.0 12.9

ー 74.0 164.1 219.5 284.8 294.1 369.8 637.8 688.6 674.4 622.4 536.0 404.1 251.8 127.8

0

0

0

0

Note: This data is on a cash basis. Premium incomes are presented after deducting returned premiums.

36

Annual Report FY2017

0

0

3.7

2.4

0

0

3.8 17.2 10.4
0

0

0

8.6

8.4

0

0

4.4 12.2
00

3.1 22.4

7.8 19.2

0

0

0

0

（Billions of Yen）

Underwritten Amount
About NEXI

Underwritten Amount by Insurance TypeThe total underwritten amount in FY2017 was approximately JPY 7.3 trillion, up 15.2% compared to the previous fiscal year, due to anincrease in Japanese exports thanks to a gradual recovery of the global economy.
（Fiscal Year）

0.1
0.6

7.1

2013

6.7

2014

6.4

2015

0.1
0.4

0

1

Export Credit Insurance

2

0.1
0.6

3

Buyer’s Credit Insurance

4

5

0.5

0.5 0.2 7.8

0.4 0.2 7.3

6

Overseas Investment Insurance

0.3 8.5

0.4 0.2 6.3

5.9

2017

0.8

NEXI’s Business2016

0.2 0.5
0.3

5.3

0.3 0.2 8.2

8 （Trillions of Yen）

7

Overseas Untied Loan Insurance

Other Insurance Types＊Other Insurance Types : Export Bill Insurance, Prepayment Import Insurance, Trade Insurance for Standing Orders from Specific Buyer, Export Credit Insurance for SMEs and AFF Sector,
Comprehensive Export Insurance with Simplified Procedure and Reinsurance

Underwritten Amount by Region（Fiscal Year）

FY2017 Review of Performance

Asia continued to be the largest with 49.5% (approximately JPY 3.9 trillion) followed by Central America with 9.0% (approximately JPY 0.7
trillion).
1.8
54.9

2016

10.7

8.6

8.5

5.5 3.7 3.7 2.6
1.3

49.5

2017

0
Asia

9.0

20
Central America

Europe8.940Middle East

8.9

60
AfricaSouth America

7.3

5.6

3.9

5.7

100（%）

80
North America

International Organizations

Oceania

FY2017 Financial Results

Top Ten Countries and Regions for Underwritten Amount in FY2017（Millions of Yen）

County/Region

Underwritten
amountComposition

County/Region

Underwritten
amountComposition

1Indonesia

976,606

12.5％

6

Belgium

293,368

3.7％

2

China

550,601

7.0％

7

U.S.A.

262,668

3.4％

3

Thailand

444,503

5.7％

8

Philippines

189,646

2.4％

4

Korea

332,592

4.2％

9Vietnam

188,785

2.4％

5Panama（flag of convenience vessel）

304,678

3.9％

10

India

182,778

2.3％

Annual Report FY2017

37

FY2017 Review of Performance

FY2017 Performance Highlights

Outstanding Commitment
Outstanding Commitment by Insurance TypeThe outstanding commitment in FY2017 increased by 1.5% to approximately JPY 14.3 trillion compared to the previous fiscal year.
（Fiscal Year）
0.8

1.4

0.5

2013

7.7

2.3

2014

7.8

1.1

1.5

3.5

2015

8.0

0.9

1.5

3.3

7.4

0.9

1.5

3.4

2017

7.5

0.9

1.5

3.5

8

9

1

Export Credit Insurance

2

3

4

5

Buyer’s Credit Insurance

6

7

Overseas Investment Insurance

10

11

0.8

14.5
14.1

0.9

12

Overseas Untied Loan Insurance

14.6

0.8
0.9

2016

0

12.8

13

14.3

14（Trillions of Yen）

Other Insurance Types＊Other Insurance Types : Export Bill Insurance, Prepayment Import Insurance, Trade Insurance for Standing Orders from Specific Buyer, Export Credit Insurance for SMEs and AFF Sector,
Comprehensive Export Insurance with Simplified Procedure and Reinsurance

Outstanding Commitment by Region
The outstanding commitment for Asia continued to be the largest at approximately 45.5% (JPY 6.9 trillion), followed by the Middle East at
approximately 13.5% (JPY 2.1 trillion).
（Fiscal Year）

2016

48.0

2017

45.5

0
Asia

38

15.2

13.5

20
Middle East

Annual Report FY2017

Europe7.7

40
North America

Africa

7.1

6.4

6.3

5.2

5.4

5.2

5.0 2.0

5.1

4.6

6.2

4.3

7.2

60
Central America

80South America

Oceania100（%）
International Organizations

Premium Income
About NEXI

Premium income in FY2017 increased by 20.6% compared to the previous fiscal year to approximately JPY 56.1 billion.
（Fiscal Year）

32.0

2013
2014

73.7

2015

51.5
46.5

2016

56.1

2017
0

20

40

80 （Billions of Yen）

60

Note: For details please see page 44.

NEXI’s BusinessPremium Income by Insurance Type
Overseas Untied Loan Insurance earned the largest premiumincome of JPY 26.2 billion (46.7% of the total amount) in FY2017,
followed by Export Credit Insurance with approximately JPY 14.2
billion (25.3%) and Buyer’s Credit Insurance with approximately
JPY 6.3 billion (11.3%).

Export Bill Insurance 0.2%

Comprehensive Export Insurancewith Simplified Procedure
0.2%
Export Credit Insurance
for SMEs and AFF Sector
0.1%

Trade Insurance for Standing Orders
from Specific Buyer 0.6%
Reinsurance
4.6%
Overseas Investment
Insurance 10.9%

Overseas
Untied Loan
Insurance
46.7%

Buyer's Credit Insurance
11.3%

FY2017 Review of Performance

Export Credit Insurance
25.3%

Recoveries
The amount of recoveries in FY2017 was approximately JPY 31.3 billion, down by 29.7 compared to the previous fiscal year. Recoveriesof claims associated with political risk events, including debt rescheduling, accounted for about JPY 24.7 billion, or 79% of the total
recoveries. The remaining approximately JPY 6.6 billion, or 21%, was associated with commercial risk events.
（Fiscal Year）

30.9

2013

0.5

31.4

2015

35.7

3.6

0.2 40.9

40.7

2016

44.1
24.7

2017
0

0.3

25

44.5

31.3

6.6

20

FY2017 Financial Results

32.1

2014

30

35

40
Political Risk Events

45（Billions of Yen）
Commercial Risk Events

Annual Report FY2017

39

FY2017 Review of Performance

FY2017 Performance Highlights

Claims Paid
Claims paid in FY2017 increased by 147.3% to approximately JPY 19.2 billion compared to the previous fiscal year, in reaction to claims
paid in the previous fiscal year to indemnify a large-scale political risk event.
（Fiscal Year）

0.4

2013

12.2

11.8

2014 0.9

2.2

3.1

2015

18.6

2016 1.0

3.8

22.4

7.8

6.8

0.2

19.2

19.0

2017
0

5

10

15

25 （Billions of Yen）

20
Political Risk Events

Commercial Risk Events

Insurance Claims Paid by Region
In terms of region, the amount of claims paid for South America was the largest at approximately JPY 13.9 billion (72.4% of the total amount).
Overall

Political Risk

Commercial Risk

Africa 0.3%
Middle East 1.5%
Europe 2.8%

North America 0.1%
Oceania 0.0%

Middle East 0.7%

Asia
22.8%

South
America
46.8%

South
America
72.4%

Middle East 1.5%
Europe 2.8%

Asia
52.5%

（Millions of Yen）

40

Total

Political Risk Commercial Risk

1

Brazil13,8390

13,839

2

China

2,755

112

2,642

3

Singapore

951

0

951

4

Russia

529

0

529

5

United Arab Emirates

287

2

286

Annual Report FY2017

North America 0.1%

Asia
22.5%

Top Five Countries/Regions with Large Insurance Claims Paid

Country/Region

Africa 0.3%

South
America
72.7%

Insured Events in FY2017 (Based on the data as of May 15, 2018)
About NEXI

Occurrence of Events by Risk ─ Year-on-Year Change ─
The reported occurrences of risk events totaled approximately JPY 61.8 billion. The amount of political risk events fell to nearly
half compared to the previous fiscal year, despite an increase of reported political risk events in Africa and Europe. Meanwhile,that of commercial risk events more than doubled due in part to payment arrears by buyers in Asia and the Middle East.
Claims paid for political risk events dropped compared to the previous fiscal year because no large-scale claims were made.
On the other hand, that of commercial risk events considerably increased approximately threefold due to delay in performanceof obligators.
(Millions of Yen)

Type of Risk

Occurrence of Events

FY2016Year-on-Year Change (%)

FY2017

Political Risk Events

10,563

9,506

5,663

(40.4)

Commercial Risk Events

15,57324,02656,092

133.5

Amount total

26,13633,532

61,755

84.2

Political Risk Events

18,5711,000

214(78.6)

Commercial Risk Events

3,824

6,782

19,029180.6

Amount total

22,395

7,782

19,243

147.3

NEXI’s Business

Claims Paid

FY2015＊ There are some cases where debts are paid after reporting of occurrence of a risk event, resulting in no claims made or claims made next fiscal year.
There are therefore gaps between the amount of occurrence of events and amount of claims paid.

Occurrence of Events and Claims Paid (FY2015 – FY2017)
Political Risk Events(Millions of Yen)
10,563

2015
2016

9,506

0

5,000

15,573

2015

3,824

2016

5,663

214

24,0266,782

2017
10,00015,00020,000(Millions of Yen)

56,092

19,0290

10,00020,000Claims Paid

Occurrence of Events

FY2017 Review of Performance

1,000

2017

18,571

Commercial Risk Events

30,00040,00050,00060,000Claims Paid

Occurrence of Events

Occurrence of Events by Region
Approximately 80% of political risk events in FY2017 occurred in Africa. The remaining 20% occurred in North and Central
America. Risk events in Africa were due to natural disasters (cyclone) and delay in the remittance of foreign exchange.

Occurrence of Events by Region (FY2017)

5,000
4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0

(Millions of Yen)
4,697

949
2

0

a
pe
ica
eric
mer
Euro
al A outh Am
entr
S
C
d
h an

d

/Mid

Asia

15

ast
le E
Nort

0
a
Afric

ia

an
Oce

Commercial Risk Events

FY2017 Financial Results

Political Risk Events(Millions of Yen)

41,98245,00040,00035,00030,00025,00020,00015,00010,0005,000
010,996
789

954

a
pe
ica
eric
mer
Euro
al A outh Am
entr
S
C
d
h an

d

/Mid

Asia

ast
le E

1,259
a
Afric

113
ia

an
Oce

Nort

Annual Report FY2017

41

FY2017 Review of Performance

FY2017 Review of Performance
Underwritten AmountUnderwritten Amount by Insurance Type(Millions of Yen)

Type of Insurance

FY2013

FY2014FY2015FY2016FY2017

Export Credit Insurance

7,062,995

6,737,681

6,438,129

5,344,820

One year or less

3,876,014

3,798,162

3,304,188

More than one year

3,186,981

2,939,518

Trade Insurance for Standing Orders from Specific Buyer

7,500

Export Credit Insurance for SMEs and AFF Sector

Composition(%)

Year-on-Yearchange (%)

5,915,423

81.1

10.7

2,745,229

3,093,390

42.4

12.7

3,133,941

2,599,591

2,822,033

38.7

8.6

8,054

5,463

5,308

8,115

0.1

52.9

2,642

4,310

9,290

9,640

8,449

0.1

( 12.3 )Comprehensive Export Insurance with Simplified Procedure

23,062

36,023

40,956

47,106

51,963

0.7

10.3

Export Bill Insurance

14,351

12,062

13,25812,255

11,8230.2( 3.5 )

Prepayment Import Insurance

5

84

454

98

981

0.0

906.2

Overseas Investment Insurance

607,118

488,604

503,508

401,538

641,5688.8

59.8

Buyer's Credit Insurance

116,449

156,422

256,135

61,898138,372

1.9

123.5

Overseas Untied Loan Insurance

292,526

835,625454,643366,722404,887

5.5

10.4

Reinsurance

108,358

206,996

93,42685,297

115,9711.6

36.0

8,235,005

8,485,862

7,815,262

6,334,680

7,297,552

100.0

15.2

Total

(Note 1) The underwritten amount is based on the amount as determined at the policy issue date. The total is based on the actual underwritten amount calculated byapplying the exchange rate of the insurance contract date, not the insured amount based on the insurance option for transactions in foreign currency. (The same
applies to the table below.)(Note 2) In accordance with the BU rules, Export Credit Insurance with credit terms of more than one year includes figures on insurance for capital goods, even if thecredit period is one year or less. (The same applies hereafter.)(Note 3) The floating interest coverage case is calculated based on the interest rate at the time of the conclusion of the contract. (The same applies hereinafter.)

Underwritten Amount by Region(Millions of Yen)

RegionFY2013

FY2014FY2015FY2016FY2017

4,648,950

4,313,329

4,103,595

3,711,316

Middle East

859,564

503,204

1,311,427Europe934,698

163,994

North America

328,489

Central America

Composition(%)

Year-on-Year
Change (%)

3,878,278

49.5

4.5

571,306

696,6108.9

21.9

743,348578,369

699,2938.9

20.9

957,074

383,047

250,236

303,5993.9

21.3

778,445

181,088789,353

723,744703,3429.0( 2.8 )South America

620,301

900,820

377,503251,170

438,4225.6

74.6

Africa474,936

691,986

317,625

373,657

573,657

7.3

53.5

Oceania

93,489621,011

137,866

119,886

100,603

1.3( 16.1 )International Organizations

192,541

830,584

293,575

177,508445,278

5.7

150.8

Asia

(Note 1) Classification used to compute the above amount: Pre-shipment: Country of the shipment consignee; Post-shipment: Country of the payer (when guaranteed,country or international organization of the guarantor).
(Note 2) Since the amount includes transactions that are doubly computed, i.e., for both pre-shipment (country of the consignee) and post-shipment (country of thepayer), the figures do not match the total in Outstanding Commitment by Insurance Type.
(Note 3) The amount is classified under International Organizations instead of regions when guaranteed by an international organization.
(Note 4) Central Asia is included in Asia. (The same applies hereafter.)(Note 5) Central and Eastern Europe and Russia are included in Europe. (The same applies hereafter.)

42

Annual Report FY2017

Outstanding Commitment (As of fiscal year end)
About NEXI

Outstanding Commitment by Insurance Type(Millions of Yen)

Type of Insurance

FY2013

FY2014FY2015FY2016FY2017

Export Credit Insurance

7,729,556

7,824,348

7,988,439

7,446,773

One year or less

3,157,157

3,346,374

3,056,828

More than one year

4,572,399

4,477,974

12,172Year-on-year
Change (%)

7,538,669

52.6

1.2

2,649,163

2,497,946

17.4( 5.7 )

4,931,611

4,797,610

5,040,723

35.2

5.1

9,748

9,375

7,313

9,868

0.1

34.9

809

1,449

3,161

3,028

2,817

0.0

( 7.0 )

Comprehensive Export Insurance with Simplified Procedure

6,358

11,84010,531

11,87913,0030.1

9.5

Export Bill Insurance

2,854

2,757

2,851

3,283

3,556

0.0

8.3

Prepayment Import Insurance

0

82

301

0

979

0.0

−

Overseas Investment Insurance

1,381,472

1,519,798

1,457,399

1,460,533

1,528,398

10.7

4.6

843,676

1,051,619

923,292922,836

866,474

6.0( 6.1 )

2,340,913

3,450,177

3,348,179

3,439,069

3,531,722

24.6

2.7

481,299753,765

747,998

828,928

834,459

5.8

0.7

12,799,111

14,625,584

14,491,526

14,123,643

14,329,946

100.0

1.5

Trade Insurance for Standing Orders from Specific Buyer
Export Credit Insurance for SMEs and AFF Sector

Buyer's Credit Insurance
Overseas Untied Loan Insurance
Reinsurance
Total

NEXI’s Business

Composition(%)(Note 1) The total amount is calculated based on the actual insured amount by using the exchange rate as determined at each fiscal year-end (including the outstanding
amount underwritten in previous years), not the insured amount based on the insurance option for transactions in foreign currency. (The same applies to the tablebelow.)(Note 2) The floating interest coverage case is calculated based on the interest rate at the end of each fiscal year(The same applies to the table below).

FY2017 Review of Performance

Outstanding Commitment by Region(Millions of Yen)

RegionFY2014FY2015FY2016FY2017

Asia

6,157,137

7,049,343

6,765,958

6,938,429

Middle East

1,618,309

1,832,577

2,413,796

Europe1,485,961

1,538,710

North America

419,806

Central America
South America

Composition(%)

Year-on-year
Change (%)

6,894,46445.5( 0.6 )

2,198,618

2,050,197

13.5( 6.8 )

1,370,926

1,108,202

1,073,114

7.1( 3.2 )

1,000,236

980,674

911,537

976,589

6.4

7.1

565,497

606,627

687,931755,757

769,735

5.1

1.8

1,028,851

1,164,458

934,651

776,747704,038

4.6( 9.4 )

Africa666,671

800,022680,454

750,939

947,204

6.3

26.1

Oceania

1,042,667

792,051

747,300

725,637

654,853

4.3( 9.8 )

244,522225,035

243,752

282,677

1,084,413

7.2

283.6

International Organizations

FY2017 Financial Results

FY2013(Note 1) Classification used to compute the above amount: Pre-shipment: Country of the shipment consignee; Post-shipment: Country of the payer (when guaranteed,country or international organization of the guarantor).
(Note 2) Since the amount includes transactions that are doubly computed, i.e., for both pre-shipment (country of the consignee) and post-shipment (country of thepayer), the figures do not match the total in Outstanding Commitment by Insurance Type.
(Note 3) The amount is classified under International Organizations instead of regions when guaranteed by an international organization.

Annual Report FY2017

43

FY2017 Review of Performance

FY2017 Review of Performance

Premium Income
Premium Income by Insurance Type(Millions of Yen)

Type of Insurance

FY2013

FY2014FY2015FY2016FY2017

Composition(%)

Year-on-Yearchange (%)

Export Credit Insurance

13,315

15,18813,858

14,838

14,21325.3( 4.2 )One year or less

5,612

6,247

5,081

5,240

6,600

11.8

More than one year

7,703

8,941

8,777

9,598

7,613

13.6

26.0
( 20.7 )Trade Insurance for Standing Orders from Specific Buyer

263

281

194

166

340

0.6

Export Credit Insurance for SMEs and AFF Sector

24

39

83

85

72

0.1

105.6
( 15.8 )Comprehensive Export Insurance with Simplified Procedure

43

85

99

105

116

0.2

11.1

Export Bill Insurance

132

111

131

109

120

0.2

10.3
819.6

Prepayment Import Insurance

0

0

3

0

3

0.0

Overseas Investment Insurance

4,471

5,035

5,802

5,264

6,102

10.9

15.9

Buyer's Credit Insurance

3,899

6,586

13,030

3,378

6,326

11.3

87.3

Overseas Untied Loan Insurance

6,078

38,514

15,231

22,044

26,220

46.7

18.9

Reinsurance

3,771

7,840

3,038

526

2,603

4.6

394.9

Total

31,99473,67951,46946,516

56,117

100.0

20.6

(Note) The premium income is recorded at the start of the insurer’s obligation period, unlike the underwritten amount based on the policy issue date. Therefore, thepremium income and underwritten amount may be recorded in different fiscal years.

Insurance Claims Paid
Insurance Claims Paid (by Insurance Type and by Risk)(Millions of Yen)

Type of Insurance
Export Credit Insurance
9,675
Trade Insurance for Standing
368
Orders from Specific Buyer
Export Credit Insurance for0
SMEs and AFF Sector
Comprehensive Export Insurance
17
with Simplified Procedure
14
Export Bill Insurance
Prepayment Import Insurance0
Overseas Investment Insurance
0
1,723
Buyer's Credit Insurance
Overseas Untied Loan Insurance
0
Reinsurance
436
12,234Total

FY2013

FY2014FY2015FY2016

Political Commercial

Political Commercial

Political Commercial

Political Commercial

0

9,675

2,709

582

2,127 21,926 18,571

0

368

99

0

99

221

0

0

1

0

1

0

17

8

0

8

0
14
0
0
0
0
0 1,72300436
0436 11,798

0
0
0
0
0
285
3,102

0
0
0
0
0
285
867

FY2017Year-on-Year
Political Commercial Composition(%)
change (%)

3,355

3,499

1,000

2,499

4,205

114

4,091

21.9

20.2

0

221

0

0

0

13

0

13

0.1

−

2

0

2

136

0

136

193

0

193

1.0

42.2

0

0

0

13

0

13

3

0

3

0.0

(80.1)

0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
245
0
2,235 22,395 18,571

0
0
0
0
0
245
3,824

31
0
0
114
1,047
2,943
7,782

0
0
0
0
0
0
1,000

31
0
0
0
0
100
114
0
1,047 13,839
2,943
891
6,782 19,243

0
0
0
0
100
0
0
0
0 13,839
0891
214 19,029

0.0 (100.0)
0.0
−
0.5
−
0.0 (100.0)
71.9 1,221.7
4.6 (69.7)
100.0 147.3

Insurance Claims Paid (by Region)(Millions of Yen)

RegionAsia
Middle East
EuropeNorth America
Central America
South America
AfricaOceania
Total

44

841
9,532
1,777
7
72
5
0
0
12,234

Annual Report FY2017

FY2013

FY2014FY2015FY2016

Political Commercial

Political Commercial

Political Commercial

Political Commercial

0841
436 9,096
0 1,777
0
7
0
72
0
5
0
0
0
0
436 11,798

1,334
459
869
0
0
440
0
0
3,102

0
459
0
0
0
408
0
0
867

1,334 1,059
0
0 1,472
0
869
24
20
0
0
0
0
980
0
31 18,584 18,551
0
276
0
0
0
0
2,235 22,395 18,571

1,059
1,472
4
0
980
33
276
0
3,824

3,662
872
245
503
0
1,384
884
232
7,782

0
29
0
0
0
320
652
0
1,000

FY2017

3,662 4,385
843
287
245
542
503
25
0
0
1,064 13,940
233
65
232
0
6,782 19,243

Year-on-Year
Political Commercial Composition(%)
change (%)
112 4,273
2
286
0
542
0
25
0
0
100 13,84006500214 19,029

22.8
19.7
1.5 (67.1)
2.8 121.2
0.1 (95.0)
0.0−
72.4 907.2
0.3 (92.6)
0.0 (100.0)
100.0 147.3

Recoveries
About NEXI

Recoveries by Risk
(Millions of Yen)

Type of Risks
Political Risk
Commercial Risk
Total

FY2011FY2012

17,330FY201323,531FY201430,865FY201532,137FY2016

40,667FY201744,141

24,696Composition(%)

Year-on-Yearchange (%)

79.0( 44.1 )

338

486

509

3,572

201

327

6,575

21.0

1908.817,66824,017

31,37535,70840,86744,46831,271100.0( 29.7 )Recoveries by Region
NEXI’s Business(Millions of Yen)

RegionFY2011FY2012FY2013

FY2014FY2015FY2016FY2017

Composition(%)

Year-on-Yearchange (%)( 66.2 )

Asia

5,673

6,298

7,278

8,979

9,039

5,895

1,995

6.4

Middle East

3,510

8,172

11,173

11,227

11,528

11,953

17,374

55.6

45.4

814

1,154

1,512

2,860

572

594

713

2.3

20.1

EuropeNorth America

1

30

0

1

1

4

6

0.0

69.5

Central America

510

241

3,246

3,015

1,519

1,534

1,472

4.7

( 4.0 )South America

1,176

1,536

1,558

2,361

10,771

20,337

9,024

28.9

( 55.6 )( 84.2 )Africa

5,970

6,587

6,608

7,266

7,437

4,152

657

2.1

Oceania

14

0

0

0

0

0

29

0.1

−

17,66824,017

31,37535,70840,86744,46831,271100.0( 29.7 )Total

FY2017 Review of Performance

Recoveries in FY2017
Recoveries by Risk
The recovery amount in FY2017 declined by 29.7% year-on-year (JPY 13.2 billion) to JPY 31.3 billion from JPY 44.5 billion.
Looking at the results by risk, the recovery amount related to political risk events such as Paris Club rescheduling dropped by
44.1% to JPY 24.7 billion from the previous fiscal year. Meanwhile, that of commercial risk events surged by 1,908.8% to JPY 6.6
billion.

Recoveries by Region and Country
FY2017 Financial Results

By region, recovery value in the Middle East accounted for more than half of the total recoveries at 55.6%, amounting to JPY
17.4 billion. The amount includes JPY 9.5 billion in Iraq due to Paris Club debt recoveries and JPY 6.3 billion in Saudi Arabia
due to debt recoveries related to commercial risk events.
South America accounted for the second largest share with 28.9%, amounting to JPY 9.0 billion. The amount includes JPY 8.4
billion in Argentina and JPY 0.6 billion in Ecuador.
Asia was ranked third with 6.4%, amounting to JPY 2.0 billion. It includes JPY 1.7 billion in Indonesia and JPY 0.1 billion in
Pakistan.
The data for other regions in descending order were: JPY 1.5 billion in Central America including JPY 1.3 billion in Cuba; JPY
0.7 billion in Europe including JPY 0.5 billion in Serbia and JPY 0.1 billion in Bosnia and Herzegovina; and JPY 0.7 billion in
Africa including JPY 0.5 billion in Egypt.
＊ The figures above are all approximate numbers.

Annual Report FY2017

45

FY2017 Review of Performance

FY2017 Business Overview
Launch of “New” NEXIOn April 1, 2017, Nippon Export and Investment Insurance(NEXI) was transferred into a 100% government-owned special
stock company from an incorporated administrative agency, andhas been newly established as Nippon Export and Investment
Insurance.
This transformation is aimed to strengthen NEXI’s ties withthe government, so as to better reflect the intentions of thegovernment policies in NEXI’s business, and also to improve theflexibility, efficiency and mobility of business management at NEXI.
Simultaneously, the Special Account for Trade Reinsurance heldby the government was abolished, and all assets and liabilitiesof the account were succeeded by the “new” NEXI. In the eventof emergency where NEXI is faced with a difficulty in funding,countermeasures will be taken by the government as prescribedin the Trade and Investment Insurance Act to ensure secure
payment of insurance claims. In FY2017, various steps weretaken to lay the foundation for the stock company, and theseinclude strengthening governance by establishing various bodies
including the Board of Directors and the Audit and Supervisory
Board stipulated by the Companies Act.

Responding to changes in the financial environment andnew needs
In October 2017, NEXI started to underwrite US Dollardenominated insurance as one part of efforts to strengthen its
ability to implement the Partnership for Quality Infrastructureannounced by Prime Minster Abe in May 2015. NEXI provided thisinsurance to support four transactions in FY2017.
NEXI also implemented several measures to respond to morediverse needs for financing, including restarting to provide Export
Credit Insurance for projects with deferred payment of two or
more years in April and starting to provide Buyers Credit Insurance
and Overseas Untied Loan Insurance for mini-perm loans, a typeof financing conditioned on refinancing, in July.

Supporting the Strategic Priority Sectors

46

Support for Overseas Infrastructure
Development

Securing a Stable Supply of Natural
Resources and Energy

The Japanese government is working to increase overseas
orders of infrastructure systems for Japanese corporations
and to make international contributions through high quality
infrastructure exports based on the “Infrastructure Systems Export
Strategy” (adopted at the Ministerial Meeting on Strategy Relating
Infrastructure Export and Economic Cooperation) and “Partnershipfor Quality Infrastructure.”In FY2017, NEXI, provided loan insurance for the exportof automatic train stop ( ATS ) systems to Administración deInfraestructuras Ferroviarias Sociedad del Estado, an Argentinian
national railway infrastructure management company, andprovided loan insurance for a loan to pay NEXI premiums related
to insurance for the export of a fertilizer plant to Uzbekistanbased Navoiyazot Joint-Stock Company (a measure that NEXI
implemented to strengthen its function in response to thePartnership for Quality Infrastructure). NEXI will continue to actively
support the export of infrastructure.

Securing a stable supply of mineral resources and energy is an
important policy concern for Japan. In FY2017, NEXI provided
Overseas Investment Insurance to support the acquisition of
an interest in the West Qurna 1 oil field in the Republic of Iraq.
NEXI has also been aligned with the policy of the Ministry of
Economy, Trade and Industry’s Agency for Natural Resources andEnergy in supporting liquefied natural gas (LNG) projects, and
it is considering providing support for LNG liquefaction projects
even if the ultimate destination of the LNG cargos is not Japan.
In order to support LNG import countries, NEXI will positively
consider providing support for LNG import infrastructure projects
especially in Asian countries. At the LNG Producer-Consumer
Conference 2017 held in October 2017, NEXI gave a presentation
on its policies related to LNG projects. Moving forward, NEXI willcontinue to aid efforts that stimulate LNG business by supporting
projects related to both LNG producers and consumers in orderto establish a stable supply of energy resources for Japan.

Annual Report FY2017

Support for the Aircraft and Ship
Sectors (Support for MRJ, etc.)
About NEXI

© Mitsubishi Aircraft Corporation( Photograph courtesy of Mitsubishi Aircraft Corporation )NEXI’s Business

For the aircraft sector, NEXI is ready to support the export of
the Mitsubishi Regional Jet (MRJ) developed by Mitsubishi Aircraft
Corporation. Turning to the export of Boeing aircraft, which
many Japanese companies are involved in as program partners/
suppliers, NEXI is supporting the export of aircraft components
by Japanese heavy industrial companies via reinsurance for the
Export-Import Bank of the United States. In FY2017, NEXI took
a new initiative and concluded a reinsurance agreement with
UK Export Finance and started to underwrite reinsurance for theagency.
In the ship sector, there was a temporary decline in orders
because of the 2008 financial crisis, but there are signs of arecovery for various reasons, including exports being morecompetitive due to the weaker yen and growing replacement
demand for extremely fuel efficient vessels. In FY2017, NEXI
provided support for three bulk carriers through insurance.

Cooperation with the U.S.
MOU Signed regarding Cooperation
with the U.S. Government’s
Development Finance Institution OPICIn December 2017, NEXI decided to provide support in the formof loan insurance for a photovoltaic project in the Al Manakher
area of the Hashemite Kingdom of Jordan (Jordan), the first cofinancing project with OPIC based on the MOU on the left side.
The project involves Mitsui & Co., Ltd. constructing a 52 MW
photovoltaic power station in cooperation with the U.S. power
project development company The AES Corporation, and Qataripower development company Nebras Power, and then selling
the power to National Electric Power Company, the Jordanian
government-owned power company, for 20 years. Of the funds
that will be raised through project financing, OPIC and Sumitomo
Mitsui Banking Corporation (SMBC) are providing USD 40 million
in loans, and NEXI will underwrite the insurance for the loan
provided by SMBC.

FY2017 Review of Performance

In November 2017, NEXI signed a memorandum of
understanding ( MOU ) with the Overseas Private Investment
Corporation (OPIC), the U.S. Government’s development financeinstitution, regarding cooperation in the field of investing andfinance. The purpose of the MOU is to effectively and productively
support infrastructure and other projects that Japanese and U.S.
companies aim to jointly implement in emerging markets. The
signing ceremony was held at the U.S. Embassy in Japan when
U.S. President Trump visited Japan. It is expected that the MOU
will reinforce the partnership between the two countries.

Jordan / Underwriting Photovoltaic
Power Station Project in Al Manakher

FY2017 Financial Results( Signing ceremony )Annual Report FY2017

47

FY2017 Review of Performance

FY2017 Business Overview

Cooperation with Russia
Reinsurance Cooperation with EXIARIn April 2017, NEXI signed a reinsurance contract related toexport credit insurance provided by the Russian Agency for
Export Credit and Investment Insurance (EXIAR) to Russia-based
Japanese car manufacturers for exports of cars from RussianFederation. This was the first contract based on the reinsurancecooperation agreement that NEXI and EXIAR concluded when
Russian President Vladimir Putin visited Japan in December 2016.
In February 2018, NEXI jointly held a seminar with EXIAR in
Moscow for Japanese companies conducting business in Russia
and CIS countries. Around 50 entities, including Japanesecompanies, attended the seminar.

Facility Provided to Alfa-Bank Basedon 8-Point Economic Cooperation Plan
In September 2017, NEXI decided to provide a facility
based on the 8-Point Economic Cooperation Plan to the Joint
Stock Company Alfa-Bank, when Prime Minister Shinzo Abevisited Russia. This is a credit-line facility to help implement the
8-Point Economic Cooperation Plan proposed by the Japanese
government. It provides business funds not only to Japanesesubsidiaries in Russia but also local Russian companies that areconsidered important for building and strengthening the supply
chains of Japanese companies.
Furthermore, NEXI took part in the 3rd Eastern Economic
Forum held in Vladivostok. At the discussion session on exports
from the Russian Far East, NEXI explained its export and FDI
support including examples as an export credit agency.

( Signing Ceremony )( Panel Discussion )Strengthening Partnerships with Overseas Organizations
Reinsurance Agreement with Czech
Republic-Based EGAP
In June 2017, NEXI concluded a reinsurance agreement with
the Czech Republic-based Export Guarantee and Insurance
Corporation (EGAP) to explore the economic interests of the twocountries and help develop third-country exports. The agreement
was signed at the Prime Minister’s Residence in the presenceof Prime Minister Shinzo Abe and Prime Minister of the Czech
Republic Mr. Bohuslav Sobotka on the sidelines of his visit toJapan.
In November 2017, a seminar on the use of trade andinvestment insurance was held jointly with EGAP in Prague basedon the agreement. The seminar, which the Japanese Ambassador
to the Czech Republic Kaoru Shimazaki attended, was held tofurther deepen understanding of the use of trade and investment
insurance, particularly among local Japanese companies.

48

Annual Report FY2017( Signing Ceremony )(Joint Seminar with EGAP )In August 2017, NEXI signed a general cooperation agreement(GCA) with the Export Credit Bank of Turkey (Turk Eximbank), theexport credit agency of the Republic of Turkey. The purpose of the
GCA is to effectively support Japanese and Turkish companies
through trade insurance when they try to win project orders in
Turkey, Japan, and other countries, by sharing information related
to potential projects and discussing reinsurance agreements.

In October 2017, NEXI signed a general cooperation agreement(GCA) with the Brazilian Guarantees and Fund Managements
Agency ( ABGF ) , the export credit agency of the Federative
Republic of Brazil. The purpose of the GCA is to develop a
new framework for cooperation, particularly related to sharing
information, to effectively support Japanese and Brazilian
companies through trade insurance when they try to win orders
for projects in Brazil, Japan and other countries.

NEXI has regular bilateral meetings with ECAs and government
officials of countries such as Republic of Korea, Federal Republicof Germany, French Republic, and Republic of Austria to share
information and exchange candid opinions on various topics
including the global financial situation, and each country’s issues
and efforts. The meetings, each held usually once a year, arehelpful in further strengthening bilateral ties and keeping up withtrade and investment insurance trends in the various countries.

Training Course for Export Credit
Experts
NEXI invited mid-level staffers of ECAs and supervisoryagencies in Asia and other regions to its training course in January
and February 2018. The purpose of the training was to further
expand trade and investment insurance in the participants’countries and improve their skills in countries and regions that areon the way to developing trade and investment systems.

Expanding Reinsurance Operational
Bases
NEXI has added Socialist Republic of Viet Nam to countries
in which NEXI provides its fronting scheme to support Japanesecompanies expanding overseas. The fronting scheme consistsof NEXI underwriting reinsurance for trade credit insurance
underwritten by a Vietnamese company ( local Vietnamese
subsidiaries of Mitsui Sumitomo Insurance Company, Limited,
Tokio Marine & Nichido Fire Insurance Co., Ltd., and Sompo
Japan Nipponkoa Insurance Inc.).
NEXI had already been offering its insurance via the fronting
scheme in Republic of Singapore, Hong Kong, Kingdom ofThailand, and the U.K. The reinsurance agreement with theVietnamese insurers has enabled NEXI to meet the insurance
needs of Japanese companies operating in the Vietnam. (Sales
launched in April 2018.)

Annual Report FY2017

FY2017 Financial Results( GCA Signing Ceremony )Bilateral Meetings

FY2017 Review of Performance

General Cooperation Agreement with
ABGF

The Berne Union (International Union of Credit and Investment
Insurers) is a forum in which ECAs, international organizations andprivate insurers from around the world discuss common issues
related to export credit insurance and investment insurance froma technical perspective. Since the first meeting in 1934 in Berne,
Swiss Confederation, its membership has grown to a total of 83
as of April 2018.
The 2017 spring meeting took place in May in Copenhagen,Kingdom of Denmark, and the fall meeting was held in Octoberin Belgrade, Republic of Serbia. NEXI attended the respective
meetings to compare notes with other members regarding export
credit.

NEXI’s Business

General Cooperation Agreement with
Turk Eximbank

Berne Union Meetings
About NEXIThe signing of the reinsurance agreement is expected toincrease the number of deals involving exports from the Czech
Republic and Japan to third countries by sharing risks between
EGAP and NEXI.

49

FY2017 Review of Performance

FY2017 Business Overview

Supporting SMEs to Expand Business Overseas
Promotion of Trade and Investment
Insurance
NEXI has Joined in the New Export Nation Consortium
announced by the Japanese government as one of its initiatives tosupport the overseas business expansion of mid-sized enterprises
and small businesses (SMEs).
Through strengthening partnership with the Japan External
Trade Organization (JETRO), which serves as the secretariat to theconsortium, NEXI is promoting trade and investment insurance
through efforts including participating in seminars held by JETRO
as instructors.
In December 2017, NEXI participated in the 2nd World BusinessFesta 2017 hosted by JETRO in the Tokyo International Forum,
giving a presentation on trade and investment insurance forcompanies which consider expanding business overseas andproviding individual consultations in a booth for supportingorganizations.

( 2nd World Business Festa 2017 )Reinforcing Support for SMEs
The support network for SMEs’ overseas business development
was launched in FY2011 with 11 regional banks, aiming to widely
spread and promote the use of NEXI’s insurance. In FY2017
another three financial institutions joined the network, expanding
the number of partner financial institutions to 117. More andmore companies make use of trade and investment insurance
introduced by the partner financial institutions, as shown by
examples including the export of greenhouse construction
material to Russian Federation by Hokkaido General Trading Co.,
Ltd. introduced by the Hokkaido Bank, Ltd. in September 2017.
Our developing network has encouraged more SMEs to use
Export Credit Insurance for SMEs and AFF Sector.

50

Annual Report FY2017

100
Underwritten amount ( left axis, JPY 10 million )80

Underwritten transactions ( right axis, transactions)

84.5
1,933 2,000
1,758

70
1,486

60
50

43.1
900

40

20

0

1,500

1,000

666

30

10

2,500

92.9 96.4

90

156
3.8

255

209

260

4.8

3.8

4.4

433

355

289

285

6.4

6.2

5.6

26.4

500

12.7

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
( FY )

0( Actual Export Credit Insurance for SMEs and AFF Sector )Support for Exports of Foods andAgricultural, Forestry and Fishery
Products
NEXI works to support the export of food and agricultural,
forestry and fishery products.
In July 2016, NEXI revised its trade and investment insurance
for SMEs and launched sales of Export Credit Insurance for
SMEs and AFF Sector, a product available to business operatorsin the agricultural, forestry and fishery (AFF) sector in addition
to SMEs. Moreover, NEXI promotes partnerships with AFFrelated organizations, concluding outsourcing agreements with
National Mutual Insurance Federation of Agricultural Cooperatives(JA Kyosairen) and Norinchukin Bank in March 2017 and with
National Mutual Insurance Federation of Fishery Cooperatives (JFKyosuiren) in February 2018.
Through the tie-ups with these institutions, Export Credit
Insurance for SMEs and AFF Sector has been used in various
situations, including the export of fresh flowers by ZEN-NOH
International Corporation in September 2017 and that of yellowtail
by National Federation of Fisheries Cooperative Associations (JFZengyoren) in March 2018.
NEXI is also striving to further spread the use of the product bygiving presentations in seminars held by chambers of commerce
and industry as well as regional agricultural administration offices
and taxation bureaus across the nation.
In order to provide more effective support for the overseas
expansion as well as prompt and meticulous response to SMEs
and business operators in the AFF sector, NEXI will continue towork to improve its products and services and to strengthen its
support system and educational activities.

About NEXI

( Photograph courtesy of JF Zengyoren )( Photograph courtesy of ZEN-NOH International
Corporation )( Photograph courtesy of Hokkaido General
Trading Co., Ltd. )In Pursuit of a Sustainable Society( On-site visit to a project site )FY2017 Screenings by Category

Category C
72.5%

Category B
11.8%

FY2017 Screenings by Region
Africa9.8%

FY2017 Financial Results

Category A
15.7%

FY2017 Review of Performance

NEXI has established the “Guidelines on Environmental andSocial Considerations in Trade Insurance” to carry out its social
responsibilities on environmental and social issues. NEXI makes
sure that appropriate environmental and social considerations are
implemented by the project sponsors on projects to be supported
by NEXI’s insurance.
In FY2017, NEXI conducted screenings and made assessmentsfor 51 projects, including site visits. In the assessments, projects
are classified into three categories (A, B, or C) based on theirpotential environmental impacts in accordance with Screening
Forms submitted by applicants for NEXI insurance. For example,
a site visit will be conducted as a general rule if a project is
categorized as Category A, which indicates the highest level ofimpact.
Also, Objection Procedures on the Guidelines ensure NEXI’s
compliance with the Guidelines, for which an independent“Examiner” is assigned independent of the section in charge ofunderwriting business.

In December 2017, NEXI formulated “Guidelines for Information
Disclosure Considerations for Nuclear Sector Projects in Trade
Insurance” to complement the Guidelines. From FY2018, it willverify whether information disclosure considerations are being
properly conducted for nuclear power projects covered by theseguidelines.

NEXI’s Business

Guidelines on Environmental andSocial Considerations

Central &South America
13.7%

North
America
2.0%

Europe/NIS
9.8%
Middle
East
13.7%

Asia
51.0%

＊Turkey is included in Middle East. Mexico is included inCentral & South America. Russia and Central Asia are
included in Europe/NIS.

Annual Report FY2017

51

FY2017 Review of Performance

FY2017 Underwritten Projects
Power

Chile / Huatacondo Photovoltaic Project
AustrianSolar Chile Cuatro SpA ( ASC4 ) , a joint venture
established by Sojitz Corporation, Shikoku Electric Power
Company, Incorporated, U.S.-based Sojitz Corporation ofAmerica, and France-based Eiffage S.A., will construct a 98.0 MW
photovoltaic power station in Huatacondo, located in the Atacama
Desert of northern Chile. After completion, the generated power
will be sold on Chile’s wholesale power market.
Of the syndicated loans that ASC4 has obtained, NEXI is
providing insurance for USD 47.20 million of partial financing
provided by three Japanese financial institutions − Sumitomo
Mitsui Banking Corporation, Mizuho Bank, Ltd., and The Iyo Bank,
Ltd. This is the first time that NEXI has underwritten insurance
for project financing for a merchant powerplant (a power plant
operated to sell power on the wholesale market) and U.S.-dollar
denominated loan insurance.
The Chilean government is promoting policies that actively
facilitate the introduction of renewable energy, aiming to generate
70% of national energy from renewable sources by 2050. It is
expected that this project supported by NEXI will contribute toa reduction in greenhouse gas emissions in line with Chile’s plan

and lead to more business opportunities for Japanese companies
and thus maintain and improve the international competitivenessof Japanese companies in various fields including renewableenergy development.
◦T his insurance contract was entered into in November
2017.

( Photograph courtesy of Sojitz Corporation )Egypt / Gulf of Suez Onshore Wind IPP Project
Ras Ghareb Wind Energy SAE, owned 40% by Toyota
Tsusho Corporation (Toyota Tsusho) and Eurus Energy Holdings
Corporation (Eurus Energy), 40% by Engie S.A., and 20% by
Orascom Construction SAE, is undertaking a project to construct
an onshore wind farm (262.5 MW) in the Ras Ghareb municipalityof the Red Sea Governorate, Arab Republic of Egypt, on the coastof the Gulf of Suez and to sell the power generated at the windfarm to Egyptian Electricity Transmission Company for 20 years.
Financing for the project came from loans provided by Japan
Bank for International Cooperation ( JBIC ) , Sumitomo Mitsui
Banking Corporation, and Societe Generale Tokyo Branch. NEXI
provided insurance to support USD 128 million in loans fromthe two commercial banks. NEXI also underwrote the insurance
for both the investments made by Toyota Tsusho and Eurus
Energy into Ras Ghareb Wind Energy SAE and parent company
guarantees for subordinate loans. In addition to being NEXI’s first
medium- to long-term support in Egypt since the Arab Spring, it
is NEXI’s first project financing-related loan insurance for an IPP in
Egypt.
In recent years, Egypt has seen demand for electricity increase
as a result of both population growth and economic development,
and there is a need to increase and improve electricity facilities. It
is expected that NEXI’s financing-related support for this projectwill lead to more business opportunities for Japanese companies
in Africa and, thus, maintain and increase Japanese companies’

international competitiveness, including that related to renewableenergy development.
◦The investment insurance contract was entered into on
December 2017, and the loan insurance contract on March2018.

( Photograph courtesy of Toyota Tsusho Corporation )52

Annual Report FY2017

Indonesia / Rantau Dedap Geothermal IPP Project
About NEXI

will not only lead to more geothermal development business
opportunities in Indonesia for Japanese companies but also maintainand improve Japanese companies’ international competitiveness,
including that related to developing renewable energy.
◦The insurance contract was entered into in April 2018.

NEXI’s Business

PT. Supreme Energy Rantau Dedap, owned 32.05% by
Marubeni Corporation (Marubeni), 10% by Tohoku Electric Power
Co., Inc. (Tohoku Electric), 42.05% by Engie S.A., and 15.9%
by PT. Supreme Energy, is undertaking a project to construct a
geothermal power plant (98.4 MW) in South Sumatra, Republic ofIndonesia, and sell the power to the state-owned power company
PT. PLN (Persero) for 30 years.
Financing for the project came from loans provided by Japan
Bank for International Cooperation (JBIC), Asian Development Bank
(ADB), Mizuho Bank, Ltd. (lead arranger), MUFG Bank, Ltd., andSumitomo Mitsui Banking Corporation. NEXI provided insurance
to support USD 126 million in loans from the three Japanesecommercial banks. This is the second time NEXI has supported
financing for a geothermal IPP project with risks associated withgeothermal resource capacity, following the Indonesia Maura Labohgeothermal IPP project. This is also Tohoku Electric’s first overseas
investment project since the Great East Japan Earthquake.
Indonesia is moving forward with plans to develop 35GW of
new power generation capacity in order to meet the demandfor electricity that is rapidly growing as its economy expands. It
is expected that NEXI’s financing-related support for this project( Photograph courtesy of Marubeni Corporation )Bangladesh / Matarbari Ultra-Super Critical Coal-Fired Thermal
Power Plant and Port Construction Project
FY2017 Review of Performancelarge vessels are forced to transship cargoes to smaller boats toenter ports due to the country’s shoaling coast.
The project will be financed an ODA loan by the Japan
International Cooperation Agency (JICA). It will be one of thelargest ODA loan projects, with total project cost amounting to
JPY 500 billion. For NEXI too, the insurance to be provided will
mark the largest amount underwritten on a single project.
It is expected that NEXI’s support in this project will help expand
business opportunities for Japanese exporters in Bangladesh
and, consequently, maintain and improve their international
competitiveness.
◦T his insurance contract was entered into in December
2017.

FY2017 Financial Results

A consortium of Japanese companies was awarded an
EPC contract by Coal Power Generation Co. Bangladesh Ltd.
to construct both a 1,200 MW ultra-super critical coal-fired
thermal power plant and a deep sea port on Matarbari Island in
the southeast of People’s Republic of Bangladesh. Within the
consortium, Sumitomo Corporation (Sumitomo) is responsible forthe plant’s civil work and auxiliary equipment as well as port’s civil
works and construction, and IHI Corporation (IHI) is responsible
for boiler supply and installation. The construction of the power
plant and port started in August 2017 and is scheduled forcompletion in July 2024.
NEXI provided Export Credit Insurance for Sumitomo and IHI.
By using Japanese funds and technology, the project willcontribute to meeting the urgent need for electric power in
Bangladesh and its industrial and economic development. With
generation capacity of 1,200 MW (600 MW x 2 units), the highly
efficient ultra-super critical power plant using imported coal asfuel is expected to provide about 10% of the total generation
capacity of Bangladesh. The introduction of Japan’s state-of-theart high efficiency coal fired power technology will realize improved
control of fuel consumption and CO2 emissions by generatinghigh pressure steam and temperatures, which will contribute to
reducing environmental impact. In addition, Bangladesh’s firstdeep sea port adjacent to the plant is expected to play a key rolein the industrial development of the Matarbari area. At present,( Photograph courtesy of Sumitomo Corporation ( planned construction site ) )Annual Report FY2017

53

FY2017 Review of Performance

FY2017 Underwritten Projects

Oil and Gas

Kuwait / Project to Modernize KNPC’s Mina Al Ahmadi Refinery
Kuwait National Petroleum Company (KNPC), an oil refinery
subsidiary of Kuwait Petroleum Corporation, is moving forwardwith its Clean Fuels Project. One part of the project is modernizing
the Mina Al Ahmadi oil refinery in Ahmadi Governorate, locatedin the southern part of State of Kuwait. A joint business that JGC
Corporation is participating in was awarded an EPC contract toupgrade the refinery.
Of the funds that KNPC will raise through corporate financing,
USD 1.0 billion is in the form of syndicated loans provided by
Sumitomo Mitsui Banking Corporation (lead arranger), MUFG
Bank, Ltd., Mizuho Bank, Ltd., The Hong Kong and Shanghai
Banking Corporation Limited Tokyo Branch, and the Japan Bankfor International Cooperation (JBIC) for the purchase of imports
from Japan and other items. NEXI provided insurance to support
the USD 500 million in loans from the commercial banks.
In April 2016, NEXI clarified its policy for underwriting subsovereign risk (insurance covering sub-sovereign risk) as one partof its efforts to strengthen its ability to implement the Partnershipfor Quality Infrastructure announced by Prime Minster Abe in May
2015＊. This is the third time since then that NEXI has provided
loan insurance to cover sub-sovereign risk without government
guarantee.

It is expected that NEXI’s finance-related support forJapanese exports will maintain and improve the international
competitiveness of Japanese companies.
＊ Notification of Policy on Underwriting Sub-Sovereign Risk through Buyer’s
Credit Insurance and Overseas Untied Loan Insurance (April 1, 2016, news
release) https://nexi.go.jp/topics/cover/2016033004.html◦The insurance contract was entered into in September 2017.

( Photograph courtesy of JGC Corporation )Iraq / Acquisition of interest in the West Qurna 1 Oil Project
The West Qurna 1 oil field, located in the southern part of
the Republic of Iraq, is among the nation’s largest oil fields withestimated recoverable reserves of more than 20 billion barrels. A
consortium of five companies (consisting of the lead contractor
ExxonMobil, a U.S.-based oil company; PetroChina, a Chinese
national oil company; Royal Dutch Shell, a U.K. and Netherlandsbased oil and gas company; Pertamina, an Indonesian nationaloil company; and Oil Exploration Company, an Iraqi governmentrelated company ) have been developing this field under atechnical services contract with Iraq’s Ministry of Oil. The Ministry
is represented by Basrah Oil Company, the entity responsible for
exploration and development of oil and gas in the southern part ofthe country.
Through its U.K.-based subsidiary CIECO West Qurna Ltd.,
ITOCHU Corporation (ITOCHU) acquired all of the shares of Shell
Iraq B.V. (SIBV), which is an affiliate of Royal Dutch Shell plc. SIBV
holds a 19.6% stake in the West Qurna 1 oil project.
NEXI is supporting ITOCHU’s USD 330 million investment by
providing Overseas Investment Insurance covering 100% of Iraq’s
political risk.

The West Qurna 1 oil field is a huge resource development
project in mineral- and resource-rich Iraq. The consortium
receives compensation over the long term, proportional to thevolume of production from one of the leading oil fields in the world.
This project, supported by NEXI, is expected to expand Japanesebusiness in Iraq and ensure a stable supply of resources to Japan.
◦The insurance contract was entered into in March 2018.

( Photograph courtesy of ITOCHU Corporation )54

Annual Report FY2017

Machinery and Equipment
About NEXI

Kazakhstan / Construction Equipment Export Project(Long-term Deferred Payment Project)◦The insurance contract was entered into in July 2017.

NEXI’s Business

Blessed with energy and mineral resources, Republic of
Kazakhstan is expected to be a destination for exports of large
construction machines used for resource extraction. Hitachi
Capital Corporation concluded an export contract with Shubarkol
Premium JSC, a coal mining company located in the Karaganda
region in the central part of Kazakhstan, for construction
machinery produced by Hitachi Construction Machinery Co., Ltd.
The terms of the agreement include 5-year deferred payment.
NEXI underwrote the Export Credit Insurance for this export
contract.
Deferred payment is an effective form of financing that exporters
provide to overseas buyers. Compared to financing for large-scaletransactions, overseas buyers in small-scale transactions may find
it difficult to obtain bank financing for various reasons including
cost burden. Deferred payment–based financing is particularly
important for such buyers.
To help Japanese exporters offer deferred payment terms, NEXI
provides Export Credit Insurance coverage for transactions ondeferred payment terms of not less than two years.
As Japan’s government financial institution, NEXI will continue
to actively support exports from Japanese companies.

( Photograph courtesy of Hitachi Construction Machinery Co., Ltd. )cover such a loan. To strengthen NEXI’s functions based on
the “Partnership for Quality Infrastructure” announced in 2015by Prime Minister Shinzo Abe, NEXI had worked to improve its
Buyer’s Credit Insurance so that a NEXI-supported loan could
include a NEXI insurance premium. Previously, NEXI’s insurance
had not covered its insurance cost.
By producing ammonia and urea at this fertilizer plant,
Uzbekistan is aiming to increase domestic demand for fertilizers
and also earn foreign exchange through export of high valueadded products.
NEXI’s support to Japanese exports is expected to increasebusiness opportunities of Japanese companies in Uzbekistan.

FY2017 Financial Results

Under this project, a large-scale ammonia and urea fertilizer
plant is built in Navoiy, a city located in the central region of
Uzbekistan, by Navoiyazot Joint-Stock Company, a subsidiaryof a state chemical sector holding company Uzkimyosanoat.
Mitsubishi Corporation and Mitsubishi Heavy Industries, Ltd. wereawarded a contract to build the plant.
For the plant and equipment purchase, Japan Bank forInternational Cooperation (JBIC), MUFG Bank, Ltd., Mizuho Bank,
Ltd., Sumitomo Mitsui Banking Corporation and ING Bank NV
Tokyo Branch agreed to extend loans to Joint Stock Commercial
Bank ASAKA (ASAKA). NEXI provided a loan insurance to support
a JPY 27.7 billion loan extended by the Japanese commercial
lenders.
Also, the Japanese lenders agreed with ASAKA to extend an
additional loan, which would be used for NEXI insurance premium
payment, and NEXI provided an insurance for the first time toFY2017 Review of Performance

Uzbekistan /Navoiyazot Fertilizer Plant Construction Project◦This insurance contract was entered into in January 2018.

Annual Report FY2017

55

FY2017 Review of Performance

FY2017 Underwritten Projects

Infrastructure

Turkey / Hospital PPP Project
Sojitz Corporation ( Sojitz ) and Ronesans Group, the major
construction company in the Republic of Turkey, are undertaking a
project in which they will design and construct a hospital complexof the Ilitelli Integrated Health Campus with a floor space of 1.02
million m2 and 2,682 beds in northwest Istanbul. The companies
will operate and maintain the facilities under a 25-year contract.
Of the total amount of approx. JPY 163.0 billion in syndicatedloans for this project, Sumitomo Mitsui Banking Corporation,
Nippon Life Insurance Co., MUFG Bank, Ltd., Standard Chartered
Bank Tokyo Branch, The Dai-Ichi Life Insurance Company,
Limited, and The Iyo Bank, Ltd., provided about JPY 65.0 billion.
NEXI underwrote insurance to support this portion of the loans.
In addition, Multilateral Investment Guarantee Agency (MIGA), a
member of the World Bank Group, and NEXI provided insurance
for the approx. JPY 33.4 billion that Sojitz is investing in the
project. NEXI also provided partial reinsurance to MIGA. This is
the first time that NEXI has underwritten insurance for a publicprivate partnership (PPP) hospital project.
Turkey has seen a continuing increase in the number of people
seeking medical care because of population growth and improved
access to medical care due to the 2008 introduction of a universal
healthcare system. Construction of medical facilities, however, is

not keeping up with demand. The Turkish government, therefore,
is promoting hospital construction projects through PPPs, andthe plan is to operate and maintain facilities with a total of 40,000
beds. This project is the core of the Turkish government’s efforts
and is expected to contribute to improvements in the environment
for medical care in Turkey. NEXI’s support for this project is
expected to help Japanese companies expand their medicalcare businesses overseas and introduce their products including
medical equipment.
◦The insurance contract was entered into in August 2017.

( Image courtesy of Sojitz Corporation ( concept image of the completed facilities ) )Argentina / Project to Update Railway ATS System
Marubeni Corporation has delivered Automatic Train Stop
(ATS) systems produced by NIPPON SIGNAL CO., LTD., toAdministración de Infraestructuras Ferroviarias Sociedad delEstado, a railway infrastructure management company under
the Ministry of Transport of the Argentine Republic, for all eight
suburban lines of Buenos Aires.
Financing for the purchase of the ATS system was provided toArgentina’s Ministry of Finance by the Japan Bank for International
Cooperation (JBIC) and Deutsche Bank AG, Tokyo Branch. NEXI
underwrote the insurance for the loan provided by Deutsche
Bank. This is the first medium- to long-term insurance provided tosupport a governmental project of Argentina since NEXI’s decisionin March of 2016 to restart underwriting the country’s publicsector medium and long-term projects.
This project is being implemented under a massive infrastructure
construction plan formulated by the Argentine government as partof its policy to promote economic reforms.
As a major train accident occurred at Once Station on theSarmiento Line in Buenos Aires in 2012, the government
undertook urgent measures to install ATS system to prevent future
accidents.

NEXI’s support will expand business opportunities in Argentina
for Japanese companies that possess advanced technology andthus help maintain and improve their international competitiveness.
◦This insurance contract was entered into in September
2017.

San Martín

Sarmiento

Annual Report FY2017

Tren de la
Costa

Belgrano Sur( Photograph courtesy of Marubeni
Corporation )Roca( suburban lines of Buenos Aires )

56

Mitre

Mozambique and Malawi / Railway and Port Construction Project
About NEXI

project will contribute to diversifying Japan’s sources of coal andstabilizing its coal supply. Furthermore, for Japanese companies,
this is the first railway and port construction and operation projectin Africa. As the demand for infrastructure development in Africa
is increasing along with economic growth, the project is expected
to lead to greater participation of Japanese companies in theinfrastructure business in Africa.
◦The insurance contract was entered into in February 2018.

NEXI’s Business

Mitsui & Co., Ltd. (Mitsui) and Vale S.A., one of the world’s
largest mining companies, are undertaking a project to not only
build and maintain a 912-km railway that will run from the Moatize
Coal Mine in the northern part of Mozambique to the Port ofNacala and pass through Malawi, but also build and operate acoal terminal at the Port of Nacala. This will be done through four
companies that both companies have jointly invested in (hereafterreferred as the Project Companies).
Of the project financing that the Project Companies raised,
NEXI underwrote the insurance for USD 1,000-million loan, which
is provided by six financial institutions − Sumitomo Mitsui Banking
Corporation, Mizuho Bank, Ltd., Standard Chartered Bank Tokyo
Branch, Nippon Life Insurance Company, MUFG Bank, Ltd., andSumitomo Mitsui Trust Bank, Ltd. This is the first NEXI-supported
project involving the construction of a railway and port in Africa.
The Moatize Coal Mine, in which Mitsui also has a stake, boasts
massive coal reserves and is highly competitive. While the plan
is to export coal extracted from the mine to Japan, the carrying
capacity of the existing railway and port was insufficient, andnew transportation infrastructure was required. By constructing
the rail and port infrastructure from the Moatize Coal Mine, this( Photograph courtesy of Vale S.A. )Aircraft( Photograph courtesy of LOT Polish Airlines )August 2017, NEXI has made a new step to support exports of
Boeing aircraft. The deliveries of 787 aircraft to LOT Polish Airlines
and Norwegian Air Shuttle ASA were the first and second cofinance transaction with UKEF.
NEXI will continue to support the export of aircraft parts
manufactured by Japanese companies through reinsurance.
◦The reinsurance contract was entered into in September
2017 (LOT Polish Airlines), and October 2017 (Norwegian
Air Shuttle ASA).

FY2017 Financial Results

NEXI provided reinsurances on export credits provided by UK
Export Finance (UKEF) for the exports of Boeing 787 aircraft to
LOT Polish Airlines and Norwegian Air Shuttle ASA. The provisionsof these reinsurances are based on the reinsurance agreement
between the two export credit agencies. LOT Polish Airlines is
the state-owned flag carrier of Republic of Poland which offers
connections from Warsaw to over 90 destinations worldwide.
Norwegian Air Shuttle ASA is a low cost carrier of Northern
Europe connecting over 150 destinations around the world. It is
well known as a pioneer of low cost long-haul business model.
Japanese companies are extensively involved in thedevelopment and manufacture of 787 aircraft. Since 2004,
NEXI has been supporting exports of Boeing aircraft throughby providing reinsurances to Export-Import Bank of the UnitedStates. With the reinsurance agreement established with UKEF in

FY2017 Review of Performance

Poland and Norway / Export of Boeing 787 aircraft to
LOT Polish Airlines and Norwegian Air Shuttle( Photograph courtesy of Norwegian Air Shuttle ASA )Annual Report FY2017

57

FY2017 Review of Performance

FY2017 Underwritten Projects( SMEs related )AFF Sector

Green Tea Exports
KANROEN CO., LTD. (Kanroen), which is located in Amagasaki
city, Hyogo, made use of Export Credit Insurance for SMEs and
AFF Sector to reduce the deferred payment risk associated withthe green tea export to Republic of Korea.
Founded in 1948, Kanroen established its present position byintroducing a revolutionary sales method at that time, in which theypurchased the tea grown in Wazuka-cho, Soraku-gun, Kyoto, fromfarmers, processed the tea at its own plants, and then sold the
products. Nowadays, in addition to selling its products at storesand expanding sales channels to the northern Kanto area where
there is strong demand for tea, the company meticulously delivers
its products to the department stores and government offices.
As for overseas business, Kanroen started to export blended
powdered green tea to Korea in 2008. The initial export volume
was 500 kg but business has now increased to 20-fold thanks torising popularity of green tea overseas.
The company decided to use NEXI’s insurance after hearing
about it from a trade advisor at the Osaka Sangyo Sozokan,

which is operated by the Osaka city’s affiliated Osaka Urban
Industry Promotion Center.
◦This insurance contract was entered into in May 2017.

( Photograph courtesy of KANROEN CO., LTD. )Fresh Flower Exports
AUCNET Agri Business Inc. (AUCNET Agri Business ), which
operates flower auctions and other businesses, made use of
Export Credit Insurance for SMEs and AFF Sector when exporting
fresh flowers to Socialist Republic of Viet Nam. NEXI’s articles
and advertisements in the Japan Agricultural News prompted thecompany to contact NEXI.
Located in Minato-ku, Tokyo, AUCNET Agri Business exports
fresh flowers mainly to Asia, such as Hong Kong and Vietnam.
Recently, cherry tree exports to Republic of Russia have attracted
a lot of interest.
As a rule, the company’s export contracts are conditioned
on advance payment, but as a major overseas buyer strongly
requested deferred payment, they used NEXI’s insurance toreduce credit risk.
The company plans to continue to use NEXI’s insurance fordeferred payment transactions to expand its overseas business.

◦Export amount expected to be covered by the insurance:
about JPY 8 million◦This insurance contract was entered into in April 2017.

( Photograph courtesy of AUCNET Agri Business Inc. )Vegetables and Fruit Exports
Sunny Okinawa Co., Ltd. (Sunny Okinawa), which sells foodproducts on wholesale basis both in and outside of Okinawa,
makes use of Export Credit Insurance for SMEs and AFF Sector
for exporting vegetables and fruit to Hong Kong. The company
began using the insurance, introduced by Bank of The Ryukyus,
Limited.*58

Annual Report FY2017

Starting its export in October 2016, Sunny Okinawa has sincecommitted to accumulating and utilizing expertise in export
business and to expanding their sales channels through services
provided by organizations that support overseas businessexpansion, such as the Japan External Trade Organization (JETRO)
and a chamber of commerce and industry. The company’s efforts

About NEXI

are cited among examples of exporting Japanese agricultural,
forestry, marine, and food products published by the Ministry ofAgriculture, Forestry and Fisheries for 2016.
The company plans to continue to use NEXI’s insurance toexpand their exports of locally produced vegetables and fruits.
＊ Bank of the Ryukyus: Business tie-up with NEXI launched in September 2014.

◦Export amount to be covered by the insurance: About JPY
0.4 million◦This insurance contract was entered into in March andApril 2017.
( Photograph courtesy of Sunny Okinawa Co., Ltd. )Young Yellowtail Exports
NEXI’s Businessachieve the target of JPY 1 trillion in agricultural, forestry, andfishery exports in 2019, set by Ministry of Agriculture, Forestry and
Fisheries.
＊ JF Kyosuiren: business tie-up with NEXI launched in February 2018.

◦This insurance contract was entered into in March 2018.

FY2017 Review of Performance

The National Federation of Fisheries Cooperative Associations(JF Zengyoren) made use of Export Credit Insurance for SMEs
and AFF Sector when exporting young yellowtail and other fisheryproducts to Federal Republic of Germany. The National Mutual
Insurance Federation of Fishery Cooperatives (JF Kyosuiren＊)introduced this insurance to JF Zengyoren.
This is the first insurance underwritten by NEXI based on thetie-up with JF Kyosuiren.
Established in 1952, JF Zengyoren is a national organizationof fishery cooperatives (JFs), consisting of both JF associationsin prefectures throughout Japan and JFs in various regions
focusing on beach-based activities. In April 2017, it created a newdivision to promote export and direct sales, and started to makeorganization-wide efforts to promote exports.
JF Zengyoren plans to continue to use NEXI’s insurance andwork to expand the export of Japanese marine products to( Photograph courtesy of by The National Federation of Fisheries
Cooperative Associations )Fresh Flower Exports
world, aiming to mitigate business risks through NEXI’s insurance.
＊ Norinchukin Bank and JA Kyosairen: Business tie-up with NEXI launched in
March 2017.

◦Annual export amount to be covered by the insurance:
About JPY 9 million◦This insurance contract was entered into in September
2017.

FY2017 Financial Results

ZEN-NOH International Corporation (ZEN-NOH International),
which handles exports for the Japan Agricultural Cooperatives
Group (JA Group), started to make use of Export Credit Insurance
for SMEs and AFF Sector for exporting flowers to Europe,
introduced by the Norinchukin Bank＊ and National Mutual
Insurance Federation of Agricultural Cooperatives＊ (JA Kyosairen).
ZEN-NOH International was established as the cooperative
trading company UNICOOPJAPAN in 1961 and changed its nameto ZEN-NOH International in 2015. The company currently not only
handles the export of JA Group’s agricultural products, flowers,
and processed goods but also operates and manages overseas
offices and restaurants. JA Group’s export operations have been
centralized in ZEN-NOH International since 2017 to increase
efficiency and expand the export business for the overall JA Group.
With overseas offices in People's Republic of China, Hong
Kong, Republic of Singapore, Taiwan, Kingdom of Thailand,
the U.K. , and the U.S., the company plans to export Japanese
agricultural products, flowers, and processed goods all over the( Photograph courtesy of ZEN-NOH International Corporation )Annual Report FY2017

59

FY2017 Review of Performance

FY2017 Underwritten Projects ( SMEs related )AFF Sector

Craft Beer Exports
Miyazaki Hideji Beer Co., Ltd. (Miyazaki Hideji Beer), which
won the best prize at the World Beer Awards 2017, made useof Export Credit Insurance for SMEs and AFF Sector to mitigate
concerns about payment collection risk in exporting craft beer tothe U.S. with deferred payment.
The company was introduced NEXI’s insurance by The Miyazaki
Bank, Ltd.＊With a craft beer brewery amidst rich nature, Miyazaki Hideji
Beer is pursuing a distinctive flavor provided by its carefully
selected home-grown yeast and is striving to produce a beer
popular throughout the world. Its products have won numerous
prizes, including the World’s Best Stout and Porter at the World
Beer Awards 2017 as mentioned above and other awards in local
beer competitions such as the International Beer Cup gold medal.
The highly-esteemed company is now becoming close to realizing
its dream to brew a world-class beer produced solely from locallygrown ingredients.
Concerned about the credit risk of its first overseas customer,
the company made effective use of credit ratings that NEXI set foroverseas companies.

◦Export amount to be covered by the insurance: about JPY
1.5 million◦This insurance contract was entered into in June 2017.

( Photograph courtesy of Miyazaki Hideji Beer Co., Ltd. )＊ Miyazaki Bank: business tie-up with NEXI launched in February 2014.

Marine Product Exports
Hamamatsu Uoichi Co., Ltd. ( Hamamatsu Uoichi ) , locatedin the Hamamatsu Central Wholesale Market, contributes to astable supply of food in the western part of Shizuoka Prefecture
centered on Hamamatsu city. Through a business alliance withThe Shizuoka Bank, Ltd.＊, the company made use of Export
Credit Insurance for SMEs for exporting marine products from2013 to 2015. They also made use of Export Credit Insurance for
SMEs and AFF Sector for exporting frozen mackerel to Africa. The
company uses NEXI’s insurance to meet terms and conditions ofoverseas transactions.
For a huge demand that a single fishery company cannot
handle, Hamamatsu Uoichi cooperates with several dozens of
those in Shizuoka to export marine products.

◦Export amount to be covered by the insurance: About JPY
13 million◦This insurance contract was entered into in June 2017.

＊ Shizuoka Bank: Business tie-up with NEXI launched in January 2013.

( Photograph courtesy of Hamamatsu Uoichi Co., Ltd. )60

Annual Report FY2017

Medical Care◦Export amount to be covered by the insurance: about JPY
2.50 million◦This insurance contract was entered into in September
2017.

NEXI’s Business

When starting new business with overseas buyers in thePhilippines, Hakuzo Medical Corporation (Hakuzo Medical ), a
manufacturer and vendor of sanitary materials, decided to use
NEXI’s Export Credit Insurance for SMEs and AFF Sector to
reduce concerns about the buyer’s non-payment risk.
Hakuzo Medical, whose headquarters are located in Osaka city,
undertakes production by reflecting the ideas of frontline workers
in the field of medicine and nursing and gives shape to theirneeds. The company has been highly regarded both in Japanand overseas for not only its quality sanitary materials (bandages,
gauze, absorbent cotton, etc.) but also high value added products(medical devices, products to prevent hospital infections, etc.).
The Hyakujushi Bank, Ltd. (Hyakujushi Bank)＊ advised its client
Hakuzo Medical to consider using NEXI’s insurance to effectively
reduce risks. This was the first insurance contract underwritten by
NEXI via Hyakujushi Bank.
Hakuzo Medical plans to further expand its overseas businessby using NEXI’s insurance.

About NEXI

Sanitary Material Exports( Photograph courtesy of Hakuzo Medical Corporation )＊ Hyakujushi Bank: Business tie-up with NEXI launched in February 2016.

Medical Needle Exports
FY2017 Review of Performance◦Annual insured amount: about JPY 8 million◦The first contract was entered into in May 2017.

FY2017 Financial Results

Unisis Corporation (Unisis), a manufacturer of specialty needles,
made use of Export Credit Insurance for SMEs and AFF Sector
for the first time when it exported medical needles to Republic ofTunisia.
Founded in 1978 as a trading company handling miscellaneous
medical goods, Unisis has continued to expand business byproviding quality medical devices as a dedicated manufacturerof disposable anesthesia needles and other special needles.
Proud of providing “Made in Japan” products, the company has
exported its products overseas since its founding, mainly to the
U.S. and Europe. Unisis then started to deal with a distributor in
Tunisia by working with North Pacific Bank Ltd.,＊ which prompted
Unisis to use NEXI’s Export Credit Insurance for SMEs and AFF
Sector.
Unisis plans to continue to aggressively expand sales tooverseas markets by making use of NEXI’s insurance.
＊ North Pacific Bank Ltd.: business tie-up with NEXI launched in February 2014.

( Photograph courtesy of Unisis Corporation )Annual Report FY2017

61

FY2017 Review of Performance

FY2017 Underwritten Projects ( SMEs related )Industry

Non-Woven Fabric ExportsOZU CORPORATION ( OZU ) , which is located in Chuo-ku,
Tokyo, made use of Export Credit Insurance for SMEs and AFF
Sector to reduce risks related to the export of non-woven fabrics
to People's Republic of China.
Founded in 1653 ( during the rule of the fourth shogun
Tokugawa Ietsuna) as a Japanese paper wholesaler, OZU has
expanded its business, now centering on the production and saleof paper and non-woven fabrics.
For this large amount transaction with China, the buyer, who
was a new customer for OZU, requested deferred payment
instead of normal advance payment. This prompted OZU toconsider making use of NEXI’s insurance. NEXI’s insurance as ahedge against non-payment risk enabled OZU to comply with thebuyer’s request for deferred payment. This is a good example of
NEXI’s insurance supporting contract negotiations.
By using its own overseas offices and local subsidiaries, thecompany will continue to actively convey the usefulness and highquality of OZU brand products and cater to new orders fromoverseas.

◦This insurance contract was entered into in August 2017.

( Photograph courtesy of OZU CORPORATION )Pellet Exports
JEPLAN, INC. ( JEPLAN ) has created a business from the“circular flow” of all things in response to consumers’ desire tocontribute to the environment. In exporting its recycled PET resin
pellets to Asia, the company recently decided to use Export Credit
Insurance for SMEs and AFF Sector to manage the risk related to
payment collection from overseas buyers.
The “circular flow” that JEPLAN envisions refers to promoting
a more thorough circulation by not only manufacturing new
products using chemical-recycling technology, but also bygenerating a profit, paying taxes, and investing in the technology
development and human resource training as a going concern.
The export of the pellets is one part of that circular flow. First,
consumers bring clothing that they no longer use to department
stores, brand shops, and other stores that participate in JEPLAN’s
recycling program. Chemical recycling technology is used tomake recycled pellets from the used clothes. The pellets arethen exported to Asia to be used to make polyester fiber, which
is processed into fabric for new clothing. JEPLAN used NEXI’s
insurance when exporting the pellets to Asian companies.
NEXI’s insurance is used to support JEPLAN’s efforts topromote “circular economy.”

62

Annual Report FY2017◦Export amount to be covered by the insurance: about JPY
60 million◦This insurance contract was entered into in September andOctober 2017.

( Photograph courtesy of JEPLAN, INC. )Walnut Furniture Exports◦Export amount to be covered by the insurance: About JPY
4.50 million◦This insurance contract was entered into in August 2017.

NEXI’s Business＊ Tamashima Shinkin Bank: Business tie-up with NEXI launched in October
2015.

About NEXIAKASE Mokko Co., Ltd. (AKASE Mokko) made use of Export
Credit Insurance for SMEs and AFF Sector when exporting its
walnut furniture to Republic of Korea. Tamashima Shinkin Bank＊
recommended its client AKASE Mokko to use NEXI’s insurance.
This was the first insurance contract underwritten by NEXI via
Tamashima Shinkin Bank.
Founded in 1961, AKASE Mokko is now expanding its brandnationwide, focusing on offering furniture designed internallyand built in Japan. When the company started to consider new
business with a Korea-based buyer, it was concerned about
payment collection risk as the buyer requested payment after
shipment. Tamashima Shinkin Bank advised the company to use
NEXI’s insurance in a timely manner. With a good reputation on
its flagship brand of solid natural walnut furniture MASTERWAL,AKASE Mokko will continue to strengthen its overseas businessby using NEXI’s insurance for deferred-payment export contracts.

( Photograph courtesy of AKASE Mokko Co., Ltd. )Electrolyzer Exports

FY2017 Financial Results◦Export amount to be covered by the insurance: about JPY
150 million◦This insurance contract was entered into in June 2017.

FY2017 Review of Performance

De Nora Permelec Ltd. ( De Nora Permelec ) , a generalmanufacturer of metal electrodes and related products, made useof Export Credit Insurance (Specific) at the suggestion of its peer
company. The insurance was used for exports of electrolyzers to
China.
Established in 1969 as Permelec Electrode Ltd. and thentransformed into a wholly owned subsidiary of the Italy-based De
Nora Group in 2010, the company has played a development role
within the group, continuing to pursue technological innovation for
the whole group. The company’s DSE electrode® technology has
been applied to various technologies, including those related toreducing energy use and lessening the environmental burden.
De Nora Permelec is moving forward with its overseas
expansion as a company that contributes to the environment andsociety as a “green company.”( Photograph courtesy of De Nora Permelec Ltd. )Annual Report FY2017

63

FY2017 Review of Performance

FY2017 Underwritten Projects ( SMEs related )Industry

Greenhouse Material Exports
Hokkaido General Trading Co., Ltd. (Hokkaido General Trading),
a local general trading company, is exporting greenhousematerials for a massive vegetable factory construction project
being undertaken in Yakutsk of the Sakha Republic, located in the
Russian Far East. The company is using Export Credit Insurance(Specific) to cover country risk.
Located in the heart of the Sakha Republic, Yakutsk is a city
built on permafrost. To meet the local demand for vegetables
during winter, the city entirely relies on imports. In the springof 2016, a project to construct greenhouses was launched,using technology fostered in the cold climates of Hokkaido. The
project is undertaken by Hokkaido General Trading, which wasestablished with the cooperation of Hokkaido’s leading companies
in 2015 to provide one-stop support system for overseas
business of local companies.
For the materials export for this greenhouse project, Hokkaido
General Trading made use of NEXI’s insurance, which wasrecommended by The Hokkaido Bank, Ltd.(Hokkaido Bank),＊ oneof its investors.
As for payment, Almazergien bank, a local government-affiliatedbank, will issue an L/C, and Hokkaido Bank will purchase it. NEXI
covers the collection risk in this payment scheme that has neverbeen tried before.

◦Exports amount covered by the insurance: about JPY 120
million◦This insurance contract was entered into in August 2017.

( Photograph courtesy of Hokkaido General Trading Co., Ltd. )＊ Hokkaido Bank: business tie-up with NEXI launched in April 2011.

Car Production Line Conveyance Equipment Exports
Mishima Kosan Co., Ltd. (Mishima Kosan), with headquarters
located in Kitakyushu, used Export Credit Insurance for SMEs and
AFF Sector to reduce non-payment risk associated with exportof production line conveyance equipment to a U.S. based car
manufacturer.
What Mishima Kosan was concerned about in this exporttransaction was a usance period (grace period for payment)
desired by the overseas buyer. Then THE NISHI-NIPPON CITY
BANK, LTD.＊ recommended the use of NEXI’s insurance.
With strengths in the fields of continuous casting equipment(75% domestic market share), car production line engineeringand mechatronics engineering, Mishima Kosan has supported the
production of numerous manufacturers including steel material,cars, and TV displays through its engineering development skills,
which have won 228 patents.
In addition to domestic operations, the company actively
conducts business overseas through its group companies inHong Kong, Shanghai, and Russian Federation. Mishima Kosan
plans to continue to expand its overseas business by making use
of NEXI’s insurance to respond to various payment conditions.
＊ Nishi-Nippon City Bank: Business tie-up with NEXI launched in January 2013.

64

Annual Report FY2017◦This insurance contract was entered into in April 2017.

( Photograph courtesy of Mishima Kosan Co., Ltd. )FY2017 Financial Results
FY2017 Financial Review

66

Financial Statements etc.

67

FY2017 Financial Results

FY2017 Financial Review
Overview of Financial Statements(Millions of Yen)

1st Fiscal Year ( FY2017 )Ordinary income
Underwriting income( Net premium written )67,33151,50051,386

Subrogation income

10,211

Investment income

5,609

Other ordinary income

11

Ordinary expenses

68,931

Underwriting expenses

61,538( Net claims paid )19,256( Acquisition of receivables subrogated by paying claims )( 5,230 )( Provision for unearned premium )13,053( Provision for contingency reserve )34,876

Subrogation expenses

680

Investment expenses

798

Operating and administrative expenses
Other ordinary expenses
Ordinary loss
Extraordinary income

5,912
3( 1,600 )1,600

Income before income taxes−

Total income taxes

10

Net profit ( loss )( 10 )

Total assets

1,709,378

Net assets

794,895

Profit and Losses
NEXI’s underwritten amount in FY2017, the total amount of
insurance contracts underwritten during the fiscal year (the same
applies below), rose by 15.2% year-on-year to JPY 7.3 trillion.
This is due to expansion of international trade and production,
moderate recovery in the global economy bolstered by resilient
domestic demand and an increase in Japan's export.
Premium income, the total amount of premium of original
insurance written and premium received for reinsurance (the same
applies below), was approximately JPY 56.1 billion.

66

Annual Report FY2017

Net premium written totaled JPY 51.39 billion; subrogation
income, primarily consisting of recoveries, JPY 10.21 billion; andinvestment income JPY 5.61 billion. Meanwhile, due to largecommercial risk events, net claims paid was JPY 19.26 billion,
subrogation expenses JPY 680 million, investment expenses JPY
800 million, and operating and administrative expenses JPY 5.91
billion. As a result, provision for contingency reserve of JPY 34.88
billion was recorded.

FY2017 Financial Results

Financial Statements etc.
Balance Sheet ( As of March 31, 2018 )Account Title

Account Title

Amount( Liabilities )Cash and bank deposits

1,251,904

Bank deposits

1,251,904

Securities(Millions of Yen)

Amount( Assets )Reserves for insurance contract
Reserves for outstanding commitments

899,614899,614362,438

Unearned premium

165,811Government bonds

345,938

Contingency reserve733,803

Municipal bonds

11,500

Corporate bonds

5,000

Income tax payables

107

79,415

Deposits received

10,200

Tangible fixed assets

843

Unearned income

516

Buildings

394

Accrued amount payable

Equipment and fixtures

446

Other liabilities

298

Other tangible fixed assets

4

Privision for bonuses

108

Receivables subrogated by paying claims

Other liabilities

14,262

3,276

Provision for bonuses of directors

9

Software

1,626

Provision for retirement allowance

482

Software in progress

1,649

Provision for retirement allowance of directors

11,406

Total liabilities

Accrued premium

7,472( Net assets )Accounts receivable805

Accrued income

2,406
485

Other assets

237

Deferred tax assets

97

1,709,378

914,483

Capital169,352

Capital surplus

625,553

Legal capital surplus
Retained earnings
Other retained earnings
Retained earnings brought forward

Total assets

7625,553( 10 )( 10 )( 10 )

Total shareholders' equity

794,895

Total net assets

794,895

Total liabilities and net assets

FY2017 Review of Performance

Deposits

NEXI’s Business

3,141

Intangible fixed assets

Other assets

About NEXI(Millions of Yen)

1,709,378

FY2017 Financial Results

Annual Report FY2017

67

FY2017 Financial Results

Financial Statements etc.

Notes.
1 Important accounting principles are as follows.
( 1 ) S tandard and method of valuation of securities: Held-tomaturity securities are measured at amortized cost based on
the straight-line method.
( 2 ) Depreciation of tangible fixed assets is calculated using thestraight-line method.
( 3 ) Depreciation of intangible fixed assets is calculated using thestraight-line method. Software for internal use is depreciatedbased on the straight-line method over the period of internaluse ( five years ) .
( 4 ) Foreign-currency receivables and payables are converted
into Japanese yen at fiscal year-end exchange rates, andconversion adjustments are recorded as profit or loss.
( 5 ) Provision for bonuses is recognized based on the amountestimated to be paid to employees.
( 6 ) Provision for bonuses of directors is recognized based on theamount estimated to be paid to directors.
( 7 ) Provision for retirement allowance is accrued at the amountrequired to pay. The obligations and expenses of retirement
allowance are calculated based on the simplified method
whereby the amount required to pay for voluntary resignations
is regarded as the obligations of retirement allowance.
( 8 ) Provision for retirement allowance of directors is accrued at
the amount required to pay in accordance with the internal
rules.
( 9 ) Contingency reserve is accrued to pay large insurance claims
due to political risks or other reasons, as stipulated in Article
22 of the Trade Insurance and Investment Act.
( 10 ) C onsumption tax and local consumption taxes areaccounted for using tax-exclusive method.

2 Significant components of deferred tax assets include
the disallowance of provision for bonus, provision
for retirement allowance and unpaid business tax,
while the main component of deferred tax liabilities isretirement benefits liabilities translation adjustments.
 inancial instruments
3F( 1 ) Statusa. Policy on financial instruments
NEXI is engaged in the trade and investment insurance
business. Some surpluses are invested in securities tostrengthen NEXI’s financial base. The securities held by NEXI
include government, municipal, and government-backed
bonds.
b. Financial instruments and risk
Receivables subrogated by paying insurance claims are
exposed to debtor countries’ or debtors’ credit risk. Securities
are exposed to interest rate and market fluctuation risks.

68

Annual Report FY2017

c. Risk management for financial instruments[1] Country risk management
In concluding insurance contracts ( that could cause theacquisition of receivables subrogated by paying insurance
claims ) , NEXI’s Country Risk Analysis Group conducts risk
assessments by gathering information through the Berne
Union and OECD as well as researching and evaluating
country risk.
[2] Credit risk management
For the management of credit risk of an export contract
counterparty ( overseas buyer ) , the Credit Administration
Group conducts credit check and assessment of overseas
buyers.
[3] Market risk management
Regarding market risk, such as interest rate and pricefluctuation associated with investments in securities, NEXI’s
fund management plans are discussed by the Board of
Directors and the Corporate Governance Department
perceives, administrates and reports the implementation
status to the Board of Directors.
d. Supplementary explanation regarding fair value of financial
instruments
Fair value of financial instruments is based on quoted
market price. If the market price is not available, fair value isbased on reasonably assessed value. Market value of financial
instruments is measured based on certain assumptions andmight differ if measured based on different assumptions.
( 2 ) Fair value of financial instruments
The table below describes the carrying amount on thebalance sheet, fair value and difference as of the end of the
fiscal year. Financial instruments considered extremely difficult
to calculate their fair value are not included. ( Ref. Note 2 )( Millions of Yen )Carrying
amountFair value

Difference

1,241,712

1,241,712−

362,438

412,294

49,856362,438

412,294

49,856

Receivables subrogated by paying claims

79,41579,415−

Allowance for uncollectible receivables＊

−

−

−

79,41579,415

−

7,472

7,472

−

1,691,038

1,740,894

49,856(5) Deposits received

8

8

−

Liabilities

8

8

−

(1) Cash and bank deposits(2) Securities
Held-to-maturity securities(3) Receivables subrogated by paying claims(Net)(4) Accrued premium
Assets＊ Allowance for uncollectible receivables associated with receivables
subrogated by paying claims is deducted.

( Millions of Yen )Note 1. Items pertaining to calculation of fair value
measurement of financial services and securities( 2 ) Securities
Fair value of securities is based on the quoted market
value or value quoted by financial institutions. The differences
between carrying amount and fair value by type of held-tomaturity securities are as follows.
( Millions of Yen )Carrying
amountFair value

Difference

Fair value >Carrying amountGovernment andmunicipal bonds

330,534

381,390

50,856

Fair value ≤Carrying amountGovernment andmunicipal bonds

31,90430,904( 1,000 )362,438

412,294

49,856Total( 3 ) Receivables subrogated by paying claims
Fair value of receivables subrogated by paying claims
is equal to the carrying value at the fiscal year end lessallowance for uncollectible receivables, since it approximatesthis net carrying amount.
( 4 ) Accrued premium and ( 5 ) Deposits received
The carrying amount is deemed as the fair value sincethese are settled in a short period of time.
Note 2. F inancial instruments considered difficult to calculate
fair market values are as follows.
( Millions of Yen )Cash and bank deposits

10,192

Deposits received

10,192

Note 3. Expected payment and redemption amount of money
claims and securities with maturity after the fiscal
year end

−

−

−

−

−

10,192

16,500−12,30078,900247,500−−

14,702

34,537

16,788

6,189

−

−

7,197

Securities
Held-to-maturity
securities
Receivables
subrogated bypaying claims＊2
Accrued premium
Total

7,472

−

−

−

−

−

−

1,280,387

34,53729,08885,089247,500−

17,389Note 1. For cash and bank deposits, the amount of reserves in the above fundare classified as undetermined. Receivables subrogated by paying
claims that are in arrears are classified as undetermined. Receivables
subrogated by paying commercial risk claims are classified asundetermined because they do not exist at maturity.
Note 2. The amount of receivables subrogated by paying claims is the expected
recoverable amount.

4 The amount of accumulated depreciation on tangible
fixed assets is JPY 145 million.
5 The breakdown of reserves for outstanding commitments
at the end of the fiscal year is as follows.
Reserves for outstanding commitments

Provision for unearned premium( before deducting reinsurance reserve )JPY 170,089 million

Reinsurance reserve for the above

JPY 4,278 million

Net ( a )JPY 165,811 million

Provision of other outstanding commitment reserves ( b )JPY 733,803 million

Total ( a + b )JPY 899,614 million

6 Net assets per common share is JPY 52,993.03.
Total net assets, which net assets per share is based on, is
JPY 794,895 million, and the full amount is available for commonshares. The number of common shares at the end of the current
fiscal year is 15 million.

7 Receivables subrogated by paying political risk claims,
receivables subrogated by paying commercial risk claims,
expected receivables subrogated by paying politicalrisk claims, expected receivables subrogated by paying
political risk claims, transferred claims, and their total are
as follows.
Receivables subrogated by paying political risk claims

JPY 72,873 million

Receivables subrogated by paying commercial risk claims

JPY 6,543 million

Expected receivables subrogated by paying political risk claims－

Expected receivables subrogated by paying commercial risk claims－

Transferred claims

－

Total

FY2017 Financial Results

Cash and bank deposits are reserves held in an account at
Banco Nacional de Cuba that the government of Cuba opened
under the name of “NEXI” ( hereinafter referred to as “the Fund” )according to an agreement reached by the Japanese and Cuban
governments.
As for deposits received, withdrawals from the Fund is restricted
for use in Cuban Peso only and for the purpose of domestic
development projects in Cuba approved by both Japan andCuba. Users of the account are to repay NEXI the yen equivalentof the amount withdrawn from the account, which will be deemed
as a partial collection of the political risk claims.
It is extremely difficult to measure their fair value because it is
impossible to rationally forecast future payments. Therefore, they
are not included in ( 1 ) cash and bank deposits and ( 5 ) deposits
received.

1,241,712

FY2017 Review of Performance

Carrying amount

Cash and bankdeposits

More than More than More than More than More Undeter1 year to 3 3 years to 5 years to 10 years to than 20 mined＊1years
5 years
10 years 20 years
years

NEXI’s BusinessType of securities

1 year of
less

About NEXI

( 1 ) Cash and bank deposits
The carrying amount is deemed as the fair value sincethese are settled in a short period of time.

JPY 79,415 million

8 Amounts are rounded off to the nearest integer unit.

Annual Report FY2017

69

FY2017 Financial Results

Financial Statements etc.

Statement of Income (April 1, 2017–March 31, 2018)(Millions of Yen)

Account Title
Ordinary income
Underwriting income
Net premium written
Other underwriting income

67,33151,50051,386114

Subrogation income

10,211

Investment income

5,609Interest and dividend income
Other ordinary income
Ordinary expenses

5,609
11
68,931

Underwriting expenses

61,538Net claims paid

19,256

Acquisition of receivables subrogated by paying claims( 5,230 )Commission fees

( 591 )

Provision for outstanding commitments reserves

47,929Provision for unearned premium

13,053

Provision for contingency reserve

34,876

Foreign exchange loss
Other underwriting expenses
Subrogation expenses
Investment expenses
Foreign exchange loss
Operating and administrative expenses
Other ordinary expenses
Other ordinary expenses
Ordinary loss
Extraordinary income
Income from government grants
Income before income taxes

70

Amount

175
0
680
798
798
5,912
3
3
( 1,600 )
1,600
1,600
−

Income taxes-current

107

Income taxes-deferred( 97 )

Total income taxes

10

Net profit ( loss )( 10 )

Annual Report FY2017

( Subrogation expenses )Notes.
( 1 ) Breakdown of net premium written is as follows.
Premium written

JPY 56,117 million

Reinsurance premium paid

( JPY 4,731 million )Total

JPY 51,386 million

JPY 559 million

Total

JPY 680 million

Type

EntityJPY 19,256 million
Ministry
Major
ofshareholders Finance( JPY 591 million )Total( JPY 591 million )( 4 ) Breakdown of provision for outstanding commitments reserves( figures in parentheses are reversals of provision ) is as follows.
Provision for unearned premium ( before deducting
outstanding commitments reserves for reinsurance )JPY 17,071 million

Provision for outstanding commitments reserves forreinsurance related to the above

JPY 4,019 million

Net ( a )JPY 13,053 million

Provision for other outstanding commitment reserves ( b )JPY 34,876 million

Total ( a + b )JPY 47,929 million

JPY 38 million
JPY 5,571 million–
JPY 5,609 million( 6 ) Breakdown of subrogation income and subrogation expenses
is as follows.

1,600

－

－

Condition of transactions and the policy for deciding the conditions oftransactions, etc.
Note 1. The grants are provided to partially compensate for the impact that debt
deduction for heavily indebted poor countries (HIPCs), etc. has on the
trade and investment insurance business.
Note 2. The figure does not include consumption tax, etc.

3 Government grant income recorded as extraordinary
income refers to grants provided by the government
to partially compensate for the impact that debt
deduction for HIPCs and others has on the trade andinvestment insurance business.
4 Net loss per share is JPY 0.69.
Net loss for the current fiscal year, which net loss per shareis based on, is JPY 10 million, and the full amount of the loss isrelated to common shares.
The average number of common shares during the fiscal year
was 15 million.
The diluted net loss per share is not given since there are no
dilutive shares.

FY2017 Review of Performance( 5 ) Breakdown of interest and dividend income is as follows.

Trade and
Directlyfrominvestment Income
heldgovernment
insurance
100% administration
grants1

NEXI’s BusinessCommission for outward reinsurance

Total

Foreign exchange loss ( subrogation expenses, etc. )–JPY 0 million

Other interest and dividends

JPY 7 million( Millions of Yen )Commission for agencies and others

Interest and dividends from securities

Recovery expenses ( inward reinsurance )Ratio of
Balancevoting Relation with Transactions Amount of Account at end
rights,partytransactions2 titleof fiscaletc.
period( 3 ) Breakdown of commission fees is as follows.

Interest from bank deposits

JPY 92 million

JPY 19,256 million

Reinsurance claims recovered
Total

Debt recovery expenses ( underwritten )2 Business with related parties is as follows.

( 2 ) Breakdown of net claims paid is as follows
Insurance claims paid

JPY 22 million

About NEXI

1

Bad debt loss ( commercial risk claims )5 Amounts are rounded off to the nearest integer unit.

Subrogation income
JPY 18 million

Interest from receivables subrogated by paying
political risk claims

JPY 4,370 million

Recoveries of receivables subrogated by paying
commercial risk claims

JPY 5,090 million

Interest from receivables subrogated by paying
commercial risk claims

JPY 1 million

Recoveries of transferred claims

JPY 170 million

Recoveries received

JPY 501 million

Recoveries from overseas reinsurance received

JPY 22 million

OthersJPY 39 million

Total

FY2017 Financial Results

Recoveries of receivables subrogated by paying
political risk claims

JPY 10,211 million

Annual Report FY2017

71

FY2017 Financial Results

Financial Statements etc.

Statement of Changes in Net Assets (April 1, 2017–March 31, 2018)(Millions of Yen)

Shareholders' Equity
Capital surplus
CapitalBalance at the beginning of
the year

Retained earnings

Legal capitalsurplus

Total Capital
Surplus625,553625,553

169,352

Other retained
earnings
Retained earnings
brought forward−

Total retained
earnings

Total
shareholders'equityTotal net
assets−794,906

794,906

Changes during the year
Issuance of new shares

−

−

−

−

Dividends of surplus

−

−

−

−

Net profit ( loss )−( 10 )( 10 )( 10 )Net change in items
other than shareholders'equity during the year

−

−

−

−

−

−

−

( 10 )( 10 )( 10 )( 10 )

169,352

625,553625,553( 10 )( 10 )

794,895

794,895

Total change during the year
Balance at the end of theyear

Notes.
1 Type and total number of issued shares and treasury
shares(Thousands of Shares)

Number ofshares at the
beginning of
the year

Increase in
number ofshares during
the year

Decrease in
number ofshares during
the year

Number ofshares at theend of theyear

Commonshares

15,000−−15,000Total

15,000−−15,000Issued shares

Note: NEXI holds no treasury shares.

2 Stock acquisition rights and treasury stock acquisitionrightsThere are no applicable matters.

3 Dividends
There are no applicable matters.

72

Annual Report FY2017( 10 )

Statement of Cash Flows (April 1, 2017–March 31, 2018)
About NEXI(Millions of Yen)

Account Title

AmountCash flows from operating activities
Premium received

68,714( 19,248 )Premium paid
Income from recovery of receivables subrogated by paying claims

32,899Payment of recovered receivables subrogated by paying claims( 6,196 )Payment of operating and administrative expenses( 5,420 )325

Subtotal

71,075Interest and dividends received

10,449Net cash provided by ( used in ) operating activities

81,524

NEXI’s Business

OthersCash flows from investing activities
Redemption and sales of securities

10,000Total for asset management activities

10,000[ Total for operating and asset management activities ][ 91,524 ]Purchase of tangible fixed assets( 166 )

Purchase of intangible fixed assets( 1,707 )Others43

Net cash provided by ( used in ) investing activities

8,169

Cash flows from financing activities
1,600

Net cash provided by ( used in ) financing activities

1,600

Effect of exchange rate changes on cash and cash equivalents( 1,102 )Net increase ( decrease ) in cash and cash equivalents

90,192

Cash and cash equivalents at the beginning of the year

1,151,521

Cash and cash equivalents at the end of the year

1,241,712

Notes.

2 Cash and cash equivalents in the statement of cash
flows comprise cash on hand, deposits that can bewithdrawn at any time, and short-term investments thatare readily convertible into cash and bear only minor
risks with respect to fluctuation of value with theirredemption deadline arriving within about three months
from the acquisition date.

3 A reconciliation of the balance of cash and cash
equivalents at the end of the current fiscal year to theamount of cash and bank deposits as presented in thebalance sheet is as follows.
(Millions of Yen)At the end of the current fiscal year
Cash and bank deposits

1,251,904

Other bank deposits＊( 10,192 )Cash and cash equivalents at the end of the year

1,241,712

FY2017 Financial Results

1 The Statement of Cash Flows to be submitted to the
Minister of Trade, Economy and Industry under theprovisions of Article 20 of the Trade and Investment
Insurance Act is prepared in accordance withaccounting principles generally accepted in Japanand ordinance on terminology, forms and preparation
methods of financial statements.

FY2017 Review of Performance

Income from government grants received＊ O ther bank deposits are not included in the scope of cash and cash
equivalents for the following reason. Under a debt relief agreement between
the governments of Japan and Cuba, the Cuban government opened an
account at Banco Nacional de Cuba under the name of “NEXI.” Withdrawals
from the account are restricted to use for development projects for Cuba
approved by both governments and to be made in Cuban Peso. Users of theaccount are to pay the equivalent amount to withdrawals in Japanese yen to
NEXI.

4 Amounts are rounded off to the nearest unit.

Annual Report FY2017

73

FY2017 Financial Results

Financial Statements etc.

Account Titles Used by NEXI
Balance Sheet
Account title

Description

Receivables subrogated bypaying claims

Total assets of receivables subrogated by paying political risk claims, receivables subrogated by paying commercial risk claims,
expected receivables subrogated by paying political risk claims, expected receivables subrogated by paying commercial risk
claims and transferred claims, out of the rights acquired as stipulated in Article 42 of the Trade and Investment Insurance Act

Accrued premium

Accrued premium associated with insurance applications

Accrued income

Total accrued interest from securities and receivables subrogated by paying claims (receivables subrogated by paying political risk
claims) at the end of the fiscal year

Outstanding claims reserves

The amount needed to pay claims that are already made but not yet recorded as expense and that are not yet made but theoccurrence of events is already notified about (excluding notification of the delay in the performance of obligations)

Unearned premium

For premium written, the amount equivalent to liability for the remaining period of coverage period stipulated in the insurance
contract, etc. at the end of the fiscal year

Contingency reserve

Amount to prepare for possible future risks in order to fulfill obligations based on insurance contracts, etc.

Statement of Income
Account Item

74

Description

Net premium written

Premium of original insurance written adjusted by reinsurance premium, with premium received for reinsurance added andpremium paid for reinsurance deducted

Subrogation income (expenses)

Amount including income from recovery on subrogated receivables, interest income, foreign exchange profit or loss, and bad debt
loss

Investment income (expenses)

Amount including interest of financial assets such as bank deposits and securities, investment income such as dividends, foreignexchange profit or loss, and gain or loss on sale

Net claims paid

Amount calculated by deducting reinsurance claims recovered from paid insurance claims.

Acquisition of receivables
subrogated by paying claims

Appraised value of acquired receivables subrogated by paying claims (excluding transferred claims) at the time of recognition

Commission fees

Commission for outward reinsurance, agencies and others

Income from Government grants

Grants related to debt forgiveness deemed necessary to fulfill international obligations under Article 36 of the Trade andInvestment Insurance Act.

Annual Report FY2017

Nippon Export and Investment Insurance
https://www.nexi.go.jp

Inquiries
Corporate Planning and International Relations Group
Corporate Planning and Policy Office
Phone : +81-(0)3-3512-7665 Fax : +81-(0)3-3512-7688
E-mail : info@nexi.go.jp

Head Office
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