1

2

2011 Business Overview
Response to the Change in Business Environment◆ Measures against Natural Disasters<Great East Japan Earthquake>
Since the Great East Japan Earthquake, NEXI has
implemented the following measures to assist the earliest
recovery of Japan’s economy.
(1) Radiation Rumor
Trade insurance payment applies to exporters who
suffer losses when a destination country limits orbans imports of their products because it is rumoredthat Japanese goods are radioactively contaminated.
NEXI disseminated information about the availabilityof insurance and provided coverage.
(2) Support for Victims
For affected small and medium-sized enterprises(SMEs) nationwide, NEXI extended application
deadlines and relieved the insurer’s administrative
burdens for all insurance products.
Besides providing information, NEXI established a special
recovery support desk to receive wide-ranging inquiries
about trade in relation to the earthquake, Many inquiries
were from companies that had no prior experience withtrade insurance. NEXI produced new explanatory materials
to make application procedures easier to understand forfirst-time customers and held seminars on earthquake
response to provide information about trade insurance andsupport measures.

<Floods in Thailand>
In October 2011, large-scale floods hit central Thailand,

submerging industrial parks, disrupting supply chains, andcausing enormous damage to local Japanese subsidiaries.
NEXI announced the following support programs as part of
the Japanese government’s measures to mitigate flood damage.
(1) Working Capital Support for Japanese Subsidiaries in Thailand
To support financing of local Japanese subsidiaries,
NEXI provided Overseas Untied Loan Insurance forworking capital loans extending beyond one year.
(2) Expanding Scope of Transactions Eligible for Coverage
NEXI expanded the scope of reinsurance coverage
between Japanese insurers in Thailand and Japanesesubsidiaries to include exports from Thailand anddomestic sales transactions within Thailand.

◆ Measures in Response to Changes

in Financial Climate
Against the backdrop of a credit crunch resulting fromthe global financial crisis and new financial regulations
such as the revised BIS capital adequacy ratio (Basel III),
some banks have become reluctant to lend, compromisingsmooth financing for businesses.
In this context, NEXI proceeded with securitization of
NEXI-insured loan usjng trustee scheme, creating anenvironment that facilitates banks providing medium-termand long-term loans.
Meanwhile, NEXI diversified financing alternatives by
underwriting insurance for regional banks’ loans tooverseas projects and by encouraging participation ofGermany’s Reconstruction Credit Institute; Kreditanstalt
für Wiederaufbau (KfW) in the insured loans.

Strengthening Relations with Financial Institutions◆ SME Support throughPartnership with Regional Banks
To support the overseas business of regional Japanese SMEs,
NEXI established in December 2011 a support network of 11
regional banks—The Hokkaido Bank, The 77 Bank, The Joyo
Bank, The Hokuriku Bank, The Bank of Kyoto, The Sensyu
Ikeda Bank, The Hiroshima Bank, The Iyo Bank, The Bank ofFukuoka, The Shinwa Bank, and The Kumamoto Family Bank.
At the conference where the network was inaugurated,
NEXI and the heads of 11 banks came together toexchange opinions and share information concerning theirefforts and issues in overseas business support.
By establishing a nationwide support system with regional

3banks that play vigorous roles in each region’s businessdevelopment, NEXI reached out to achieve an efficientand effective trade insurance system in each region.

Conference on overseas business support for regional companies◆ Fronting Service throughOverseas Japanese Insurers
NEXI promotes fronting services (arrangements in whicha local insurer’s primary insurance contract is 100% backed
by NEXI’s reinsurance) through Japanese insurancecompanies abroad. In doing so, we support overseas
Japanese subsidiaries by providing them the same level ofservice available in Japan.
So far, NEXI has promoted project support in partnership with
Mitsui Sumitomo Insurance Co., Ltd., Tokio Marine & Nichido
Fire Insurance Co., Ltd., and Sompo Japan Insurance Inc.

◆ Expanding Service Agreementswith Private Insurers
NEXI enters sales consignment and other service agreementswith private insurance companies to share information andknow-how about trade insurance products and effective
development of new customers.
NEXI signed service agreements with Hitachi Capital
Insurance Corporation and Kyoei Fire & Marine Insurance
Co.,Ltd. in April 2011 and with AIU Insurance Company
in May. NEXI had service agreements with eight non-life
insurance companies as of April 2012.

◆ Cooperation with Chambers of Commerce
NEXI signed memorandums of understanding (MOU)
with the Tokyo Chamber of Commerce and Industry inJune 2010 and with the Osaka Chamber of Commerce andIndustry in FY2011. In April, NEXI held a meeting incooperation with the Osaka Chamber to explain measuresagainst losses by radiation rumor with 560 people inattendance. Based on the MOU, NEXI hosts numerous
other events to disseminate information about trade insurance.

Strengthening Relations with Overseas Organizations◆ Reinsurance Agreements with

Asian ECAs
NEXI is promoting reinsurance agreements with export
credit agencies (ECAs) to support third-country exports
and domestic transactions of Asian subsidiaries of Japanesecompanies. The agreement enables NEXI to reinsurerisks of the Japanese subsidiary ceded from the local ECA(counterparty to the agreement). Previously, reinsurance
agreements had been signed with six countries, inchronological order: Singapore, Malaysia, Indonesia,
Thailand, Taiwan and Korea. In FY2011, NEXI enteredinto a reinsurance agreement with Hong Kong Export
Credit Insurance Corporation (HKECIC) in February 2012.
In addition, NEXI is working to expand support andimprove service by revising existing agreements. For example,
the reinsurance agreement with Taipei Export-Import
Bank of China was revised in December 2011 to incorporate
Quota Share Reinsurance, which enabled more timely
underwriting decisions compared to the previous Facultative
Reinsurance. Quota Share Reinsurance also applies to theagreement with HKECIC.

◆ MOU with SBCE of Brazil
NEXI signed an MOU with Seguradora Brasileira deCrédito à Exportação S.A. (SBCE), a Brazilian ECA, topromote cooperation in hope of concluding a reinsurance
agreement in the future. Japanese companies in Brazil
initially intended to sell in the domestic market, but theirefforts are expected to shift increasingly toward exports
throughout Latin America, North America, and Africa.

◆ Framework Agreement with Ministry of

Finance of Iraq and Trade Bank of Iraq
NEXI signed the new Framework Agreement with
Ministry of Finance of Iraq and the Trade Bank of Iraq
(TBI) in November 2011.
Under the agreement, the Ministry guarantees L/C issued
by TBI, and NEXI underwrites insurance based on the
L/C. This arrangement will support Japanese companies
seeking project contracts in Iraq, thereby advancing Iraqis’
lives and infrastructure as Iraq recovers from the war.

As a result of these efforts, reinsurance we underwrote in
Asia in FY2011 increased to JPY8.2 billion. NEXI willcontinue to expand the range of countries eligible forsupport to encourage Japanese companies' businessoverseas.
Signing ceremony with MOF of Iraq and TBI

4◆ Cooperation Agreement with

KfW of Germany
NEXI signed a Cooperation Agreement with Germany’s
Reconstruction Credit Institute; Kreditanstalt fürWiederaufbau (KfW) for the purpose of granting KfWrights to insurance claims. The agreement enables KfW toaccess to NEXI’s insurance indirectly through loan participations,which is expected to diversify financing methods for Japanese
projects. In FY2011, NEXI provided coverage for an IPP
project in Oman by means of this agreement.

◆ Bilateral Meetings
NEXI holds annual bilateral meetings with ECAs andgovernment officials of Austria, China, Germany, France,
and South Korea. During the meetings, attendees
exchange information and views about each country’s
business environment and efforts, potential country risk,
the OECD Arrangement on Officially Supported Export
Credits, and projects supported by both institutions. In
2011, NEXI started a bilateral meeting with Asuransi
Exspor Indonesia, the first export credit bilateral meetingwith an ASEAN country. Relations between NEXI and
its partner institutions are further strengthened throughthese regular meetings.

the autumn meeting was held in October in Budapest,
Hungary. Apart from the general meeting attended by all
members, three specialized committees—the Short Term
Committee, the Medium/Long-Term Committee, andthe Investment Committee—facilitate sharing experiences
and professional views to improve members’ risk management
and other activities.

◆ Training Programfor Asian ECA Professional Staff
Japan’s Ministry of Economy, Trade, and Industry invites
Asian ECA staff and government officials for a lecture
program provided by NEXI staff. The program is held
yearly to advance trade insurance systems in eachparticipating country and to improve the ECAs’ abilities
in countries and regions where trade insurance is in thedevelopmental stage.
In 2011, eight countries/regions participated in the
program. Attendees at meetings in Hong Kong, India,
Indonesia, Malaysia, Myanmar, Taiwan, Viet Nam, andBrazil (invited as a special participant) exchanged information
about their trade insurance programs, including new efforts
and challenges, and explored cooperation throughreinsurance agreements. Myanmar participated for the
first time, and Viet Nam dispatched its finance ministry
official in charge of designing a system to develop thecountry’s trade insurance system.
Through the program, NEXI supports the developmentof trade insurance support system in Asia, encouraging
Japanese companies doing business overseas and strengthening
ties with other ECAs.

Bilateral meeting with Korea (K-sure)◆ Berne Union Meetings
The Berne Union (The International Union of Credit andInvestment Insurers) is a forum where ECAs from numerous
countries, international organizations, and private insurers
exchange information about mutual issues related to export
credit insurance and investment insurance. The firstmeeting was in Berne, Switzerland, in 1934, and membershipextended to 49 institutions in April 2012. The organization’s
main activities involve biannual meetings. The 2011 spring
meeting was held in April in Taipei, Taiwan, and5

Training Program for Asian ECA Professional StuffSupporting Strategic Priority Sectors◆ Support for Exports of Packaged

Infrastructure Systems
Under the “New Growth Strategy” approved by the JapaneseCabinet in June 2010, export expansion through strong
private-public initiatives was positioned as a priority among
policies that address social infrastructure demand in Asia.
Over previous years, international collaboration anddiversity in financing have become more important asprojects grew larger and longer in duration. In December
2010, further financing support by governmental institutions,
including NEXI, was determined at the ministerial meeting
concerning exports of packaged infrastructure, and NEXI
took the following actions.
Stronger protection against foreign currency risk
（1）
NEXI provides currency-risk coverage against 18
local currencies, the dollar, and the euro, so that theamount of insurance claims paid would not be reduced
compared with the amount expected when the insurance
contracts were concluded.
In 2011, NEXI underwrote four projects based on
foreign currencies, including a geothermal power projectin New Zealand (in NZ dollars) and an offshore wind
power project in the United Kingdom (in sterling).
Higher percentage of coverage for co-financing（2）with JBICNEXI is providing up to 100% coverage against politicalrisk (previously up to 97.5%) and commercial risk
(previously up to 95%) under Overseas Untied Loan
Insurance for Japanese commercial banks engaged in
co-financing overseas projects with the Japan Bankfor International Cooperation, NEXI continues toprovide up to 100% coverage against political andcommercial risks under Buyer’s Credit Insurance.
Initially, coverage was to be provided only f rom
December 2009 until the end of March 2011. As aresult, NEXI successfully supported social infrastructuredevelopment projects in Asia, including the Hai
Phong Expressway Project in Viet Nam.

service has been used by 435 companies in 781 cases since
the program started in October 2008.
NEXI also is providing financial support for SMEs incollaboration with Shoko Chukin Bank and Japan’s three
Megabanks. Measures include a favorable loan programfor SMEs using insured export receivables as collateral andthe purchase of export receivables.
Also in December 2011, NEXI established a cooperation
network with 11 regional banks that are business partners with
SMEs. It has become much easier for SMEs to use NEXI
insurance since regional banks became involved with NEXI,◆ Efforts to Secure a Stable Supply of

Natural Resources and Energy
Securing mineral resources and energy has been an
important policy concern for Japan.
Starting with the establishment of Investment and Loan
Insurance for Natural Resources and Energy in April 2007,
NEXI has supported projects that contribute to off-take or
acquisition of interests in resources by Japanese companies.
In FY2011, NEXI provided record levels of support asmeasured by number of policies and amount of coverage,
including a liquid natural gas development project inIndonesia and development of the Caserones copper andmolybdenum project in Chile.

◆ Support for Aircraft Sector
NEXI is supporting exports of aircraft parts produced bya Japanese heavy industries through reinsurance to US
EXIMBANK. In FY2011, NEXI provided reinsurance
for 29 Boeing aircraft destined for 11 airlines and leasing
companies. NEXI is also actively supporting efforts
to acquire orders for Japan-made small passenger planes;
Mitsubishi Regional Jet (MRJ).

◆ Supporting International

Development of SMEs
NEXI supports SMEs’ international business development
through Export Credit Insurance. The product wasestablished in April 2005, and in FY2011 286 cases
were underwritten.
The program to provide free buyer credit information to
SME customers continued in FY2011. This free information
6◆ Support for the Marine Transport Sector
Since the 2008 financial crisis, financing has remained
challenging for the marine transport sector. NEXI
continue to support exportst by Japanese shipbuilders withan excellent reputation for high and eco-friendly technology.
In FY2011, NEXI provided Buyer's Credit Insurance forthe first large cruise export project awarded to a Japanese
shipbuilder in 11 years.

◆ Support for the Agricultural Sector
NEXI continues to strengthen support for investments
and loans for overseas agricultural business and to promote
export of agricultural products to ensure food security andfoster growth industries in Japan. In April 2011, NEXI
signed a cooperative agreement with the Kyoei Fire andMarine Insurance Company, Limited to support andpromote export of Japanese agricultural products.

◆ Support for Overseas Activities ofConstruction Industry
In recent years, decisions by Dispute Adjudication Board(DAB) have started to be used as an efficient way todissolve disputes in overseas construction projects. In July

2011, NEXI started to accept DAB decisions as aconfirmation of insured events in cases where a NEXIinsured contract meets a specified requirements—for
example, both parties of the contract have accepted the
DAB decision as contractually binding. By accepting DAB
decisions as a standard, NEXI could assess insurance
claims more quickly.
NEXI is also holding trade insurance seminars forconstruction companies and industrial organizations in theconstruction sector in cooperation with the Ministry ofLand, Infrastructure, Transport, and Tourism.

◆ Support for Japanese business in

Emerging Markets
NEXI is supporting investments and other businessactivities by Japanese companies in risky emerging markets.
NEXI has resumed underwriting medium-to-long-term
projects guaranteed by the government of Myanmar. Aftera hiatus of eight years, in January 2012, NEXI establisheda two-year, USD500 million credit line for projects in
Myanmar. NEXI and Japanese companies visited Myanmar
in March 2012 to exchange views with government officials
on the use of trade insurance. Also in February 2012, NEXI
provided coverage for a project in South Sudan as the first
ECA in the OECD member countries.

Toward an Environmentally Sustainable Society◆ Trade and Investment Insurance forPreventing Global Warming
Trade and Investment Insurance for Preventing Global
Warming was created in 2008 to support transfer andexport of Japanese energy conservation and renewableenergy technologies and equipment that contribute to
reduction of greenhouse gas emissions. The insurance
offers 100% coverage for political risk.
In FY2011, NEXI underwrote projects including an
offshore wind power project in the United Kingdom.

Offshore wind power project in the UK

7◆ Guidelines on Environmental andSocial Consideration
To fulfill its responsibility to the environment, NEXI
conducts appropriate environmental reviews by establishing
Guidelines on Environmental and Social Consideration in
Trade Insurance. These guidelines are based on the OECD
Council Recommendation on Common Approaches tothe Environment and Officially Supported Export Credits.
NEXI will continue to assure that projects underwritten
receive adequate environmental and social consideration by
project companies.

NEXI Seminars◆ Seminars on Trade Insurance◆ Seminars on Debt Recovery

NEXI regularly holds seminars on trade insurance services
to enhance customers’ understanding of trade insurance andto promote effective use of our services. Seminars coveressential information about the trade insurance system,
credit control, claims payment, debt recovery, and specificproducts. In FY2011, seminars were held in Osaka in Julyand in Tokyo and Nagoya in August, attended by as manyas 454 participants.

NEXI regularly holds seminars to provide practicalinformation about recovering overseas debts. Guest lecturers
with extensive experience in debt recovery are invited frominternational law firms or from overseas debt servicing
agencies with which NEXI is a partner. In FY2011, sevenlecturers were invited from two partner servicers and two
law firms to discuss economic trends and recovery processes
in northeast Asia, North America, Europe, and emerging
economies.
The seminar was held in January 2011 in Tokyo, co-hosted
by Japan Foreign Trade Council. A record 218 people
attended, mostly from insurance user companies as well as
regional banks and construction companies.

Trade insurance seminar

Strengthening Organization towards New NEXI
Under a policy titled “Basic Policy on the Review of System
and Organization of Incorporated Administrative Agencies(Cabinet Decision in January 2012), it has been decided that
NEX I will be transformed from an incorporated
administrative agency into a special company wholly ownedby the government. Also, in accordance with the Cabinet
Decision titled “Basic Policy on the Special AccountReform,” the Special Account for Trade Reinsurance will beabolished by the end of fiscal year 2015, and its funds willbe transferred to the new NEXI.
The purposes of such reforms are to strengthen relationships
with the government, but also to provide greater accounting
clarity and transparency and to improve management
flexibility by unifying the trade insurance accounting
system. Specific procedures for the transfer will be

discussed, including government guarantees for insurance
claims obligations, budget control, system and organization.
Related bills will be submitted to the ordinary Diet session
in 2013.
The reform will be implemented on the premise thatcompetitiveness of Japanese companies and convenience ofJapan’s trade insurance system should not be impaired. As
a new special company, NEXI will continue to underwrite
insurance backed by the credibility of the Japanese
government and to address Japanese policy issues as anorganization committed to implementing Japanese policies.
NEXI will begin to prepare for a smooth transition to a neworganization by establishing and strengthening businesssystems for risk management, insurance claim assessment,
and internal control and compliance.

8

2011 Performance Highlights
Economic Trends
Japanese exports decreased by 3.7% to JPY65.3 trillion compared to the precious fiscal year.
Exports to Asia, China, EU and North America decreased by 5.4%, 6.9%, 3.6% and 0.8% respectively.

(Japan's exports)

Total Exports
Year-on-year change (%)(Millions of yen)

FY2007

FY2008FY2009FY2010FY2011

85,113,381

71,145,593

59,007,879

67,788,838

65,281,412

9.9(16.4)(17.1)

14.9

(3.7)

(Source: Trade Statistics, Ministry of Finance)

Trends of the Trade and Investment Insurance Program

9Underwritten AmountUnderwritten AmountThe total underwritten amount in FY2011 decreased by 0.5% to JPY8.5 trillion compared to the previous fiscal year.

Underwritten Amount by Insurance TypeIn line with the decrease in exports, Export Credit
Insurance decreased by 2.7% to JPY7.1 trillion fromthe previous fiscal year.

Underwritten Amount by Region
Coverage for Asian transactions was the largest at JPY4.4
trillion or 47.9% of the total amount followed by Central
America at JPY1.1 trillion or 11.9%. A large part of thetransactions with Central America are export of ships
registered in Panama.

Top Ten Countries and Regions ofUnderwritten Amount in FY2011(Millions of yen)

Underwritten amount Composition

Order

Country/Region Underwritten amount Composition

Order

Country/Region

1(flag of convenience vessel)

Panama848,577

9.9

6

Taiwan384,058

4.5

2

Korea

704,804

8.3

7

Qatar

365,354

4.3

3

Indonesia

692,373

8.1

8

Malaysia

325,928

3.8

4

China

675,567

7.9

9

Brazil268,397

3.1

5

Thailand

469,603

5.5

10

India

240,2022.8

10

Outstanding Commitment
Outstanding Commitment
Total outstanding commitment at the end of FY2011 increased by 3.0% to JPY12.2 trillion compared to the previous fiscal year.

Outstanding Commitment by Insurance TypeThe outstanding commitment for Export Credit Insurance
was the largest at JPY8.1 trillion or 66.1% of the total
amount. The second largest was Overseas Untied Loan
Insurance at JPY2.1 trillion or 17.4%.

Outstanding Commitment by Region
The outstanding commitment for Asia was the largest at
JPY5.2 trillion or 40.9% of the total amount followed by
the Middle East at JPY1.9 trillion or 15.0%.

11

Premium Income
Premium Income
Premium income in FY2011 decreased by 16.0% from the previous fiscal year to JPY33.4 billion.

Premium Income by Insurance TypeThe premium income for Export Credit Insurance was
the largest at JPY14 billion or 42.2% of the total amountfollowed by Overseas Untied Loan Insurance at JPY10
billion or 30.2%. As foreign direct investment by
Japanese companies increased, premium income forOverseas Investment Insurance increased by 22.5% to
JPY3.2 billion compared to the previous fiscal year.

12Insurance Claims Paid
Insurance Claims Paid
Claims paid in FY2011 decreased by 2.5% to JPY8.4 billion compared to the previous fiscal year.

Insurance Claims Paid by Region
Amount of claims paid for Asian transactions was the largest at JPY5.6 billion or 67.3% of the total amount. This ismainly due to credit events concerning exports for Korea.

Political/Commercial Risk

Political Risk

Commercial Risk

Top Five Countries / Regions in Terms of Insurance Claims Paid
(Millions of yen)

13

Order

Country / Region

Total

1

Korea

5,624

0

5,624

2

Ukraine

1,165

0

1,165

3

Argentina

951

951

0

4

Libya

309

309

0

5

Cuba

77

77

0

Political Risk

Commercial Risk

Insured Events in 2011 (Based on the data as of the end of May 2012)● Insured Events by Risk Year-on-Year Change
Commercial risk events increased for three consecutive years due to global financial and economic crises. In FY2011,
however, the figure decreased significantly by 91.5% from the previous fiscal year. However, political risk events
remained at about the same level as the previous two years, with an increase of 0.5%.
Claims payment for commercial risk events in FY2011 increased by 52.5% due to payment for a large pre-shipment insured
event that occurred in FY2010. Claims payment for political risk events decreased by 66.2% despite payments for insured
events in South America and Africa. As a result, claims payment has remained almost unchanged for three fiscal years.
(Millions of yen)Type of Risks

FY2010FY2011Year-on-Year Change (％)

Occurrenceof
EventsCommercial Risk Events
Political Risk Events
Total

46,872
11,28358,154

3,974
11,333
15,307(91.5)
0.5(73.7)

Claims Paid

Commercial Risk Events
Political Risk Events
Total

4,603
3,972
8,574

7,017
1,342
8,359

52.5
(66.2)(2.5)

Note：The number of insured events is based on Notice of Occurrence of Insured Risk and Notice of Occurrence of Losses received during the fiscal year.

［Changes in Amount of Insured Events and Claims Paid（From FY2009 - FY2011）］● Occurrence of Insured Events by Region
In FY2011, 90% of political risk events occurred in Asia (including the Middle East) and South America. Comparedwith the previous fiscal year, the figure in Asia slightly increased, North and Central America sharply decreased, andSouth America increased by 70%. Major causes of the events were “restriction of currency exchanges” due to foreign
currency quota (South America) and “other events in Japan” (Middle East).
Commercial risk events occurred mainly in Asia and Europe. The Asian figure decreased significantly, 95%,
from the previous fiscal year, which had seen an increase of 45%.

［Amount of Insured Events by Region (FY2011)］

14

Recoveries
Recoveries
The amount of recoveries in FY2011 was JPY17.7 billion, which was an increase of 13.0% compared to the previous fiscal
year.

Recoveries by Risk
Recoveries of claims incurred by political events proceeded
successfully through rescheduling, resulting in the recovery of
JPY17 billion or 98.1% of total recoveries.

15

Confirming Environmental and Social Considerations● Environmental and Social Considerationsin Trade Insurance(１) Environmental and Social Considerations in Trade Insurance

NEXI confirms whether appropriate environmental andsocial considerations are being addressed in projects that
may be covered by NEXI’s insurance, in accordance with the“Guidelines on Environmental and Social Considerations inTrade Insurance” (established on April 1, 2001). Specifically,
projects are screened based on the screening forms submitted
by insurance applicants and then classified into three categories—
A, B, or C—in descending order of impact level. The
environmental impact of the projects is examined based on
the classification results. For example, on-site visits are
conducted for “Category A” projects.
In addition, NEXI has adopted a system of “Objection
Procedures” and, accordingly, appointed an examiner who works
under the direct control of the Chairman and CEO. However,
he is independent of the section in charge of the underwriting
business to ensure compliance with the Guidelines.

(２) Implementation results in FY2011

The number of projects screened in FY2011 was slightly lower than the previous fiscal year. However, NEXI continued toreceive a great number of large-scale project inquiries, and made great efforts to implement accurate examinations of each,

including site visits.

［Number of Screenings Conducted］［Percentage of Screening in FY2011］ ［Percentage of Screening in FY2011 by Region］

16

Review of Performance
Underwritten AmountUnderwritten Amount by Insurance Type(Millions of yen)Type of Insuranc

FY2007

FY2008FY2009FY2010FY2011

Export Credit Insurance

9,084,734

8,344,955

6,231,455

7,308,903

7,110,487

83.3

(2.7)

One year or less

4,174,931

3,679,428

2,747,597

3,498,241

3,321,146

38.9

(5.1)

More than one year

4,909,803

4,665,528

3,483,858

3,810,662

3,789,341

44.4

(0.6)

Buyer’s Credit Insurance

83,62641,33591,382

239,764

343,996

4.0

43.5

Export Bill Insurance

29,17825,886

19,98620,19916,5490.2(18.1)

Export Bond Insurance

0

0

0

0

0

0.0

－

Prepayment ImportInsurance
Overseas Investment
Insurance
Overseas Untied Loan
Insurance

889

345

107

0

254

0.0

－

155,228

281,717

213,193219,229440,367

5.2

100.9

101,905

984,806

1,606,754

741,082549,068

6.4(25.9)

Trade Insurance for Standing
Orders from Specific Buyer

7,405

5,928

9,653

11,761

10,311

0.1(12.3)

Export Credit Insurance
for SMEs

370

444

646

624

567

0.0

(9.2)

Comprehensive Export lnsurancewith Simplified Procedure

－

－

－

1,392

14,3400.2

930

57,71041,552

25,88539,99851,8340.6

29.6

9,521,044

9,726,968

8,199,062

8,582,951

8,537,772

100.0

(0.5)

Reinsurance
Total

Composition Year-on-year change(%)(%)(Note 1) The total is based on the actual underwritten amount calculated by applying the exchange rate of the date of contract, not based on methods forresponding to the exchange rate.
(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 the credit period is one year or shorter. (The same applies hereafter)

Underwritten Amount by Region(Millions of yen)

Region

FY2007

FY2008FY2009FY2010FY2011

Asia

4,817,700

4,437,621

3,604,106

4,506,009

4,381,676

47.9

(2.8)

Middle East

1,343,178

1,220,586

793,380

711,115

947,276

10.4

33.2

Europe1,227,274

1,284,625

987,617965,790895,278

9.8

(7.3)

North America

634,598

617,350

842,520

302,121261,0132.9(13.6)

Central America

976,957

1,147,354

1,029,527

1,065,227

1,086,265

11.9

2.0

South America

484,212844,275

363,382

601,494

825,6279.0

37.3

Africa640,785

739,050

526,435

469,999479,742

5.2

2.1

Oceania

228,385

251,302463,329

580,589

148,645

1.6(74.4)

International
Organizations

66,10058,023

106,123

160,254

116,006

1.3(27.6)

Composition Year-on-year change(%)(%)(Note 1) Classification used to compute the above amount:Pre-shipment: Country of the shipment consignee
Post-shipment: Country of the payer (or country of the guarantor when guaranteed)(Note 2) The amount includes transactions that are doubly computed, i.e. for both pre-shipment (country of the consignee) and post-shipment (country of the payer).
(Note 3) The amount is classified in 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.)17

Outstanding Commitment (As of fiscal year end)

Outstanding Commitment by Insurance Type(Millions of yen)Type of Insuranc

FY2007

FY2008FY2009FY2010FY2011

Export Credit Insurance

9,452,265

9,336,297

7,959,765

8,184,301

8,099,696

66.1

(1.0)

One year or less

2,296,544

2,396,838

2,022,794

2,601,992

2,337,812

19.1(10.2)

More than one year

7,155,721

6,939,458

5,936,971

5,582,309

5,761,884

47.0

3.2

Buyer’s Credit Insurance

658,789

524,937

500,438

577,707832,267

6.8

44.1

7,849

6,373

4,992

5,137

3,323

0.0

(35.3)

Export Bond Insurance

0

0

0

0

0

0.0

－

Prepayment ImportInsurance
Overseas Investment
Insurance
Overseas Untied Loan
Insurance

589

345

107

0

0

0.0

－

666,499

809,504

790,936

776,508

944,798

7.7

21.7

820,981

1,247,619

2,030,689

2,155,666

2,129,124

17.4

(1.2)

Trade Insurance for Standing
Orders from Specific Buyer

8,514

10,554

11,952

16,22615,1470.1(6.7)

Export Credit Insurance
for SMEs

67

83

161

168

145

0.0

(14.0)

Comprehensive Export lnsurancewith Simplified Procedure

－

－

－

1,332

5,830

0.0

338

91,129124,769

147,313

174,558

219,207

1.8

25.6

11,706,683

12,060,482

11,446,354

11,891,603

12,249,536

100.0

3.0

Export Bill Insurance

Reinsurance
Total

Composition Year-on-year change(%)(%)(Note 1) The total is based on the exchange rate of each fiscal year-end.

Outstanding Commitment by Region(Millions of yen)

Region

FY2007

FY2008FY2009FY2010FY2011

Asia

5,033,273

4,852,423

4,305,435

4,826,289

5,223,394

40.9

8.2

Middle East

3,391,304

3,228,462

2,531,022

2,096,943

1,919,569

15.0

(8.5)

Europe961,229

1,133,428

1,237,234

1,361,156

1,563,996

12.3

14.9

North America

485,556

616,611

869,422840,569

651,853

5.1(22.5)

Central America

674,646

681,062735,762754,325

698,215

5.5

(7.4)

South America

581,118

788,489

750,377

675,266

824,239

6.5

22.1

Africa564,374

796,105

903,281864,959

890,361

7.0

2.9

Oceania

177,410249,099

349,574

744,995

774,131

6.1

3.9

International
Organizations

159,662

95,667

158,757

227,419

218,854

1.7

(3.8)

Composition Year-on-year change(%)(%)(Note 1) Classification used to compute the above amount:Pre-shipment: Country of the shipment consignee
Post-shipment: Country of the payer (or country of the guarantor when guaranteed)(Note 2) The amount includes transactions that are doubly computed, i.e., for both pre-shipment (country of the consignee) and post-shipment (country of the payer).
(Note 3) The amount is classified in International Organizations instead of regions when guaranteed by an international Organization.

18

Premium Income
Premium Income by Insurance Type(Millions of yen)Type of Insuranc

FY2007

FY2008FY2009FY2011FY2010Composition (%) Year-on-year change (%)

23,977

17,70813,59615,157

14,074

42.2

(7.1)

One year or less

7,315

4,786

3,866

5,754

5,462

16.4

(5.1)

More than one year

(8.4)

Export Credit Insurance

16,662

12,922

9,730

9,403

8,611

25.8

Buyer’s Credit Insurance

739

1,422

1,155

6,869

3,953

11.8

(42.5)

Export Bill Insurance

245

221

184

185

146

0.4

(21.2)

Export Bond Insurance

0

0

0

0

0

0.0

－

Prepayment Import Insurance

4

3

1

0

0

0.0

－

Overseas Investment Insurance

2,145

2,669

2,956

2,595

3,177

9.5

22.5

Overseas Untied Loan Insurance

7,334

14,592

21,425

13,477

10,06530.2(25.3)

Trade Insurance for Standing Orders fromSpecific Buyer

194

196

283

399

391

1.2

(1.9)

4

5

6

6

6

0.0

(4.4)

Export Credit Insurance for SMEs

－

－

－

6

38

0.1

485

1,527

953

597

1,064

1,528

4.6

43.7

36,171

37,76940,20339,75733,378100.0(16.0)

Comprehensive Export lnsurance with
Simplified Procedure

Reinsurance
Total

Insurance Claims Paid
Insurance Claims Paid by Insurance Type and by Risk
(Millions of yen)Type of
Insuranc

FY2007

FY2008FY2009FY2010

Political Commercial

Political Commercial

Political Commercial

Political Commercial

1,229 17,124

FY2011Year-on-year
Political Commercial Composition(%)
change (%)

Export Credit Insurance

3,667

2,438

Buyer’s Credit Insurance

0

0

0

0

16,858

266

9,591

3,268

6,323

7,346

3,972

3,375

7,157

1,342

5,815

85.6

(2.6)

0

0

97

0

97

1,209

0

1,209

1,165

0

1,165

13.9

(3.6)

Export Bill Insurance

66

0

66

Export Bond Insurance

0

0

0

31

0

31

187

0

187

16

0

16

34

0

34

0.4

112.7

0

0

0

0

0

0

0

0

0

0

0

0

0.0

Prepayment ImportInsurance
Overseas Investment
Insurance
Overseas Untied
Loan Insurance
Trade Insurance for Standing
Orders from Specific Buyer
Export Credit
Insurance for SMEs

0

0

－

0

0

0

0

0

0

0

0

0

0

0

0

0

0.0

0

－

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0.0

－

57

57

0

0

0

0

0

0

0

0

0

0

0

0

0

0.0

－

2

0

2

4

0

4

429

0

429

1

0

1

0

0

0

0.0

－

6

0

6

0

0

0

0

0

0

2

0

2

3

0

Comprehensive Export lnsurancewith Simplified Procedure

－

－

－

－

－

－

－

－

－

0

0

0

0

0

3

0.0

19

0

0.0

Reinsurance

0

0

0

0

0

0

137

0

137

0

0

0

0

0

0

0.0

－
－

Total

3,800

2,495

1,305 17,159

16,858301 10,441

3,268

7,173

8,574

3,972

4,603

8,359

1,342

7,017

100.0

(2.5)

Insurance Claims Paid (By Region)(Millions of yen)

Region

FY2008FY2009FY2010FY2011

Political Commercial

Political Commercial

Political Commercial

Political Commercial

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

631

0

631

235

0

235

5,971

0

5,971

48

0

48

5,624

0

5,624

67.3

11,716.8

0

0

0

0

0

0

237

0

237

1,075

11

1,064

5

5

0

0.1

(99.5)

Europe

517

0

517

7

0

7

150

0

150

1,249

0

1,249

1,262

0

1,262

15.1

1.0

North America

94

44

49

23

13

9

38

35

3

2,119

0

2,119

0

0

0

0.0

(100.0)(97.1)

Asia
Middle East

Central America

90

0

90

15,547

15,497

50

2,680

2,677

3

2,974

2,851

123

88

77

10

1.0

South America

2,396

2,393

3

1,347

1,347

0

1,207

556

651

1,084

1,084

0

974

951

23

11.6

(10.2)

57

57

0

0

0

0

0

0

0

26

26

0

407

309

99

4.9

1,454.5

Africa19

FY2007

Oceania

15

0

15

1

0

1

158

0

158

0

0

0

0

0

0

0.0

0.0

Total

3,800

2,495

1,305

17,15916,858301

10,441

3,268

7,173

8,574

3,972

4,603

8,359

1,342

7,017

100.0

(2.5)

Recoveries
Recoveries by Risk
(Millions of yen)Type of
Risks

FY2007

FY2008FY2009FY2010FY2011

Composition (%)

Year-on-year change (%)

Political Risk

54,28440,393

17,451

14,327

17,33098.1

21.0

Commercial
Risk

3,181

1,462

3,064

1,313

338

1.9

(74.3)

Total

57,46541,855

20,515

15,64017,668

100.0

13.0

Recoveries by Region(Millions of yen)

Region

FY2007

FY2008FY2009FY2010FY2011

Composition (%)

Year-on-year change (%)

Asia

7,451

6,354

8,397

5,523

5,673

32.1

2.7

Middle East

2,520

1,404

1,342

1,357

3,510

19.9

158.7

Europe31,96725,349

2,515

1,028

814

4.6

(20.8)

North America

0

1

0

778

1

0.0

(99.8)

Central America

2,483

480

571

193

510

2.9

164.4

South America

6,882

2,230

1,705

1,155

1,176

6.7

1.9

Africa

6,160

6,037

5,985

5,608

5,970

33.8

6.5

3

1

0

0

14

0.1

−

57,46541,855

20,515

15,64017,668

100.0

13.0

Oceania
Total● Recoveries in FY2011◉Recoveries by Risk

Recoveries for FY2011 were JPY17.6 billion, an increase by JPY2 billion (13.0%) from JPY15.6 billion of the previous
fiscal year.
In a breakdown by type of risk, recoveries for commercial risk event accounted for JPY0.3 billion or 1.9% of the total
recoveries, and the remaining 98.1% or JPY17.3 billion was comprised recoveries for political risk events via rescheduling.
The four countries with largest recoveries accounted for 78% of the total recoveries: JPY5.8 billion from Egypt ( JPY5.5
billion in the previous fiscal year), JPY4.5 billion from Indonesia (previously JPY4.1 billion), JPY1.2 billion from
Jordan (previously was same), and JPY0.9 billion from Myanmar (previously JPY1 billion).

◉Recoveries by Region

Recoveries from Africa were the largest, at JPY5.9 billion or 33.8%, of total recoveries, increasing by 6.5% comparedto the previous fiscal year. From Egypt, JPY5.8 billion was recovered, from Gabon JPY70 million recovered, and from
Kenya JPY20 million recovered.
Recoveries from Asia were the second largest, at JPY5.6 billion, increasing by 2.7% from the previous fiscal year andcomprising 32.1% of total recoveries. Recoveries by country include JPY4.5 billion from Indonesia, JPY0.9 billion
from Myanmar, and JPY70 million from Pakistan.
Recoveries from the Middle East were JPY3.5 billion ( JPY2.1 billion from Iraq, JPY1.2 billion from Jordan, JPY70
million from the United Arab Emirates), South America JPY1.1 billion ( JPY0.7 billion from Argentina, JPY0.3
billion from Ecuador), Europe JPY0.8 billion ( JPY0.4 billion from Serbia, JPY0.2 billion from Poland), and North
and Central America JPY0.5 billion ( JPY0.4 billion from Dominican Republic, JPY60 million from Antigua andBarbuda).

20

Asia

Underwritten Projects
Asia

Indonesia/Donggi-Senoro LNG Project
Mitsubishi Corporation has decided to operate LNG production and sales businesses in Indonesia’s Central Sulawesi
Province and invest in the project company PT Donggi-Senoro LNG. In addition, Mitsubishi will provide a loan to its
investment partner PT Medco LNG Indonesia (Medco LNG).
To back Mitsubishi’s investment and lending, NEXI provided Investment and Loan Insurance for Natural Resources andEnergy.
Starting in late 2014, approximately 200 million tons of
LNG per year will be produced. The LNG will be off-taken
by Chubu Electric Power Co., Inc., Kyushu Electric Power
Co., Inc., and Korea Gas Corporation. This arrangement
will contribute to secure stable supply of resources forJapan. This is the first time a Japanese company will lead an
LNG project as the largest equity holder. The experience
will provide knowledge of LNG business characteristics
and methods, thereby increasing future opportunities forJapanese companies.
The insurance contract was entered into in April 2011.

Photograph courtesy / Mitsubishi Corporation

Asia

Vietnam/Hanoi - Hai Phong Expressway ProjectHai Phong is the only international port in northern Vietnam, accounting for over 80% of the trade in the region
including Hanoi and Hai Phong. These two major cities are connected by National Highway 5 (NH5), but due to rapid economic
growth, NH5 traffic has increased and traffic jam has become a regular feature, causing serious accidents. To improve thissituation, Vietnam has decided to build a new toll expressway (the Hanoi-Hai Phong Expressway) connecting the two cities.
In this project, Citibank Japan, Sumitomo Mitsui Banking Corporation, Sumitomo Trust & Banking Co. (current Sumitomo
Mitsui Trust Bank) and Bank of Tokyo-Mitsubishi UFJ（collectively, Banks）provide loans of USD 270 million to
the Vietnam Development Bank (VDB), which then will
lend the loans to a project company to construct the 3rd and8th sections of the Hanoi-Hai Phong Expressway. NEXI
provided Overseas Untied Loan Insurance for the loans
extended by Banks.
More than 200 Japanese enterprises are located among thenumerous industrial complexes along the Hanoi-Hai Phong
Expressway, which is expected to contribute toward improving
the safety and the efficiency of logistics in the area, and theinvestment environment for Japanese companies.
The insurance contract was entered into in May 2012.
Photograph courtesy / The Vietnam Development Bank

21

Asia

Thailand / Working Capital Support for Japanese Consumer
Financing Company in Thailand
Since early October 2011, severe flooding in the central and adjacent areas of Thailand has submerged industrial parks anddisrupted supply chains, causing enormous damage to Japanese subsidiaries. As part of the Japanese government’s flood damage
mitigation measures, NEXI has announced a program to help Japanese subsidiaries finance working capital needs exceeding one year
AEON Thana Sinsap (Thailand) Public Co., Ltd. (AEONTS), the Thai subsidiary of the Japanese company AEON CREDITSERVICE CO., LTD.— offers consumer financing services in Thailand, including credit card and loan services. To comply
with the Bank of Thailand’s request to ease the terms ofcredit payments for flood victims, AEONTS sought toacquire more stable financing, taking accounts of global
economic uncertainty. In response, Japanese banks
including Mizuho Corporate Bank, Ltd. as the mandated
lead arranger extended syndicated loan of USD 130
million to AEONTS. NEXI provided Overseas Untied
Loan Insurance for the loan.
This is NEXI’s first venture in supporting working capitalfinancing for Japanese subsidiaries in Thailand in relation
to the flood damages. NEXI continues its support in thehope of aiding the earliest recovery of Thailand’s economy.

AfricaThe insurance contract was entered into in March 2012.

Photograph courtesy / Mizuho Corporate Bank, Ltd. Bangkok Branch

AfricaSudan & South Sudan/Tobacco Factory Acquisition ProjectThrough its Netherlands subsidiary, Japan Tobacco Inc. (JT) acquired Haggar Cigarette & Tobacco Factory Ltd. (HCTF),
a tobacco manufacturer in the Republic of the Sudan and the Republic of South Sudan. HCTF manufactures and sells
cigarettes in both countries. In the Republic of Sudan, it has a market share exceeding 80% and a total sales volume of over 4.5
billion cigarettes in 2010.
JT invested about USD 450 million to acquire HCTF, and NEXI provided Overseas Investment Insurance for part of thatinvestment. Under a special insurance contract with JT,
NEXI will indemnify loss for each subsidiary in the caseof an insured event.
This is the first investment project for NEXI to support
in Sudan following its 20-year civil war and the first timean OECD member country has provided trade insurance
for a project in South Sudan after its independence. The
project will help the Japanese company expand business inAfrica. It also will contribute to the economic developmentof Sudan and South Sudan.
The insurance contract was entered into in December
2011.
Photograph courtesy / Japan Tobacco Inc.

22

Middle East

Middle East

Oman / Sur Gas-fired IPP Project

Marubeni Corporation and Chubu Electric Power Co., Inc. will build and operate a 2,000MW gas-fired power plant in Sur,
Oman, in collaboration with a Qatari shareholding company and a private Omani company. After the commercial operation,
electricity will be sold to Oman Power and Water Procurement Company under a power purchase agreement.

Mizuho Corporate Bank, Bank of Tokyo-Mitsubishi UFJ, Standard Chartered Bank Tokyo Branch, Sumitomo Mitsui
Banking Corporation and Sumitomo Trust & Banking Co. (current Sumitomo Mitsui Trust Bank) extended loans ofapproximately USD 183 million to the project company,
Phoenix Power Company SAOC. NEXI provided
Overseas Untied Loan Insurance for the loan.
This is the first IPP project in the Middle East for which
NEXI has provided Overseas Untied Loan Insurance.
Pursuant to the cooperation agreement with NEXI,
Germany’s KfW is for the first time indirectly participatingin NEXI’s facility as a participating lender. This projectwill contribute to address Oman’s rapidly increasing
demand for electricity and expand business opportunities
in the Middle East for Japanese companies.
The insurance contract was entered into in November 2011.
Photograph courtesy / Phoenix Power Company SAOC

Middle East

Qatar/Barzan Natural Gas Processing Project
Qatar Petroleum and ExxonMobil will build an onshore gas processing plant in Ras Laffan Industrial City, Qatar, to refine
natural gas extracted from Qatar’s North Field offshore gas field. The refined gas will be sold mainly for domestic supply in
Qatar.
JGC Corporation was awarded the construction contract for the onshore gas processing plant. A syndicated loan of USD 600
million was created to fund the purchase of plant facilities, with Sumitomo Mitsui Banking Corporation as the leadingarranger. NEXI provided Buyer’s Credit Insurance for the
loan.
This project supports Japanese companies exporting plant
equipment and promotes their business expansion. It also
is expected to contribute to Qatar’s economic development
by responding to the demand for electricity, which will
increase as the country’s economy experiences a strong
growth.
The insurance contract was entered into in January 2012.

Photograph courtesy / RasGas

23

South America

South America

Chile/Caserones Copper and Molybdenum Deposit Development
Project
Pan Pacific Copper Co., Ltd. (PPC) —a joint venture of JX Nippon Mining & Metals Corporation and Mitsui Mining &Smelting Co., Ltd.— and Mitsui & Co., Ltd. (Mitsui) have undertaken development of the Caserones Copper andMolybdenum Deposit in central Chile, in which PPC and Mitsui together hold a 100% interest.
Bank of Tokyo-Mitsubishi UFJ, Mizuho Corporate Bank, Sumitomo Mitsui Banking Corporation, and the Hongkong andShanghai Banking Corporation Tokyo Branch providedloans of USD 330 million for the project. NEXI provided
Investment and Loan Insurance for Natural Resources
and Energy for the loan.
PPC and Mitsui will purchase all of the project’s copper
concentrate production, estimated at about 150,000 tons
a year, equivalent to about 11.5% of Japan’s annual importof copper concentrates. This arrangement will contributeto secure stable supply of resources for Japan. As the mineis operated by Japanese companies, it will also help
maintain and improve mining technology and develop
human resources in mining sector of Japan.
The insurance contract was entered into in August 2011.

Photograph
写真提供： courtesy / Pan Pacific Copper Co., Ltd.

South America

Chile/Sierra Gorda Copper Mine Project
Sumitomo Metal Mining Co., Ltd. and Sumitomo Corporation have undertaken development of the Sierra Gorda coppermine, which is jointly owned with a Canadian company.
Sumitomo Mitsui Banking Corporation, Mizuho Corporate Bank, Bank of Tokyo-Mitsubishi UFJ, and Sumitomo Trust& Banking Co. (current Sumitomo Mitsui Trust Bank) provided loans of USD 300 million for the project. NEXI provided
Investment and Loan Insurance for Natural Resources and Energy for the loan.
Sumitomo Metal Mining and Sumitomo Corporation
own 45% of the project interests. This project will produce
220,000 tons of copper concentrate per year, and 50%of the production will be off-taken by Sumitomo Metal
Mining. This arrangement will contribute to secure stablesupply of resources for Japan.
The insurance contract was entered into in March 2012

Photograph
写真提供： courtesy / Sierra Gorda SCM

24

North America & Europe

North America & Europe

US and UK/Cruise Ship Export for Carnival Corporation
Carnival Corporation & plc, the largest global cruise company, has decided to purchase two 125,000-ton cruise ships to bebuilt by Mitsubishi Heavy Industries (MHI) for the group’s German brand, AIDA Cruises.
NEXI provided Buyer’s Credit Insurance for a loan extended for this project by Mizuho Corporate Bank.
MHI was the first Japanese company in 11 years to win
an export contract involving cruise ships. The new ships
will be provided with Mitsubishi Air Lubrication System,
which reduces friction between water and the vessel's hullwith a layer of air bubbles thereby reducing the ship’s fuelconsumption. The system, adopted for cruise ships for the
first time in the world, is expected to increase the ship’s
fuel efficiency by approximately 7%. This MHI’s unique
technology enhances the ship’s competitive edge in terms ofenergy efficiency.
* This is the largest ship export project in NEXI’s history.
NEXI continues to support export of highly efficient andenvironmentally friendly ships from Japanese companies.
The insurance contract was entered into in December 2011.

Photograph courtesy / Mitsubishi Heavy Industries

North America & Europe

Greece/Bulk Carrier Export ProjectThrough its three Marshall Islands subsidiaries, Safe Bulkers, Inc. (SB), a Greece-based shipping company , purchased from
Itochu Corporation three Post-Panamax* bulk carriers made by Japanese shipbuilders.
Citibank Japan and Japan Bank for International Corporation together extended loans of approximately USD 122 million to
the three group companies under a guarantee by SB. NEXI provided Buyer’s Credit Insurance for Citibank’s portion of theloan.
A Post-Panamax bulk carrier is a large-scale vessel
developed in anticipation of the expansion of the Panama
Canal. It can efficiently carry dry cargo such as iron ore andgrains in large quantities. This project supports the exportof Japanese ships that offer low environmental impact andhigh fuel efficiency. NEXI continues to support exports ofJapanese ships reputed for their technology.
* Post-Panamax vessels are larger than ships that presently
can transit the Panama Canal.
The insurance contract was entered into in June 2011.
写真提供：

25

North America & Europe

Tatarstan, Russia/Fertilizer Plant Project
Mitsubishi Heavy Industries, Ltd. and Sojitz Corporation have undertaken a project from the Russian Republic of Tatarstan
to build a new fertilizer plant in Mendeleevsk, about 1,000 kilometers east of Moscow.
The plant will produce ammonia, urea, and methanol from Tatarstan’s abundant natural gas reserves. Some of the production
will be supplied to an existing nearby plant to produce ammonium nitrate fertilizer for sale to Russian farmers.
NEXI provided Export Credit Insurance for the plant equipment and NEXI also provided Buyer’s Credit Insurance for aloan extended for the project by Sumitomo Mitsui
Banking Corporation, The Bank of Tokyo-Mitsubishi
UFJ, Ltd., and Mizuho Corporate Bank, Ltd. via Russia’s
Bank for Development and Foreign Economic Affairs(Vnesheconombank).
Tatarstan is focusing on the development of agriculture
and other industries by utilizing its rich natural resources,
including natural gas. This project will contribute to meetthe increasing demand for fertilizers essential for
agricultural advancement.
The Export Credit Insurance contract was entered into in
July 2011.
The Buyer’s Credit Insurance contract was entered into in
September 2011.

Rendering of the finished plant

Reinsurance Project
China / Boeing exports to Air China
Based on the reinsurance agreement concluded with the Export-Import Bank of the United States, NEXI provided reinsurance
for Boeing’s export of B777 aircraft to Air China. Established in 1988, Air China is the national flag carrier of China and has been
growing markedly in recent years.
NEXI has supported export of136 Boeing aircraft to 26
airlines and leasing companies since the signing of thereinsurance agreement in 2004.
Japanese companies play a major role in international joint
aircraft projects through their involvement in development
and manufacturing of Boeing aircraft, including the supplyof engine parts.
NEXI will continue to support exports by Japan’s aerospaceindustry through the reinsurance program for Boeing.
The insurance contract was entered into in July 2011.

Photograph courtesy / Boeing

26

Renewable Energy Project
New Zealand/Export Project for Te Mihi Geothermal Power Station
Geothermal power generation uses renewable energy resources such as hot water and water vapor primarily generated during
volcanic activity. Geothermal power has been developed extensively during recent years as it emits less carbon dioxide and isunaffected by weather or climate. New Zealand has been especially active in introducing geothermal power generation by
utilizing its volcanic landforms that provide a stable thermal source.
Contact Energy Limited, the second largest electric power utility in New Zealand, decided to construct the Te Mihi
geothermal power station in the Taupo Volcanic Zone on New Zealand’s North Island, one of the world’s major volcanic
zones. Toshiba Corporation won a contract to supply geothermal turbines, generators, and condensers, and Australia and New
Zealand Banking Group Tokyo Branch provided Contact
Energy Ltd., with loans of NZD 105 million to purchaseToshiba’s equipment. NEXI provided Buyer’s Credit Insurance
coverage for the loan.
It was the f irst time that NEXI provided coverage for ageothermal power generation project and under wrote a
medium- to long-term project in New Zealand. In addition,
following the extension of currencies eligible for foreign exchange
risk coverage, which had previously been limited to the US dollar
and euro, NEXI provided the coverage for NZD denominatedloan for the first time. NEXI continues to support Japanese
exports in the renewable energy sector.
The insurance contract was entered into in November 2011.

Vietnam/Nam Na 3 Hydropower Project
Nam Na 3 Hydropower Project which is to be built in the La Chau Province of Vietnam is one of the priority hydropower
projects approved by the Government of Vietnam under its 6th Power Development Master Plan. The 78MW Nam Na 3hydropower station will be built on the Nam Na River by Hung Hai Construction Co., Ltd, a Vietnamese construction
company, and the entire electricity output will be sold to the Vietnam Electricity for further distribution in the northern regionof Vietnam, including Hanoi.
Group of lenders consisting of BNP Paribas Tokyo Branch, Aozora Bank, Shizuoka Bank, and Nishi-Nippon City Bank
provided JPY 7.1 billion financing for the project based on theOverseas Untied Loan Insurance provided by NEXI. This is thefirst time for Aozora Bank, Shizuoka Bank, and Nishi-Nippon
City Bank to become the beneficiaries of NEXI’s Overseas
United Loan Insurance program.
During FY2011, NEXI has underwritten or provided preliminarily
approvals to underwrite insurance coverage for three other hydropower
projects in Vietnam. It is anticipated that the construction of thesehydropower stations will be beneficial to Japanese companies operatingin Vietnam in securing stable supply of power. NEXI will continue tostrengthen cooperation with financial institutions, including Japaneseregional banks, to further promote infrastructure development in Asia.
The insurance contract was entered into in April 2012.

27

Photograph courtesy / BNP ParibasUK / Gunfleet Sands I & II Offshore Wind Power Projects
Marubeni Corporation has obtained a 49.9% stake in the Gunfleet Sands I & II Offshore Wind Power Projects, wholly
invested by Danish state electricity and gas company DONG Energy A/S (DONG), via MC GFS Investment Company
Limited (MC GFS), Marubeni’s subsidiary established to acquire the stakes. MC GFS will purchase the generated power,
which will be sold together with Renewable Obligation Certificates and Levy Exemption Certificates. Compared with the saleof power generated by fossil fuels, more earnings can be obtained.
Mizuho Corporate Bank and Sumitomo Mitsui Banking Corporation extended loans of GBP 158 million for the project.
NEXI provided Trade and Investment Insurance for Preventing Global Warming for the loan.
It was the first time that NEXI provided coverage for a wind power project. Following the extension of currencies eligible forforeign exchange risk coverage, which had previously been limited to the US dollar and euro, NEXI provided the coverage for
GBP denominated loan. In addition, NEXI provided coverage against a change in wind conditions and in the Renewable
Obligation regime in UK.
This is the first time a Japanese company has made a full-scale investment in a commercially operated offshore wind power
station. Through this investment, the Japanese company expects to acquire knowledge and operational technology in theoffshore wind power business that has global growth potential.
* Renewable Obligation Certificates
The Renewable Obligation Certificate is issued to a generator of renewable energy by a government agency based on its electricity
output. In the UK, every electricity retailer is required to buy a Renewable Obligation Certificate on a specified percentage of its
retail sales. A generator of renewable energy can earn income
by selling the certificate to an electricity retailer.
* Levy Exemption Certificates
A government agency issues Levy Exemption Certificates togenerators of renewable energy based on their electricity
output. In the UK, all except the household and transportation
sectors (i.e., industry, commerce, agriculture, and the public
sector) pay a Climate Change Levy on the use of energy. The
Levy Exemption Certificate is evidence of electricity supply
produced from renewable sources that is exempt from the levy.
A generator of renewable energy can earn income by sellingthe certificate to those who need to pay the levy.
The insurance contract was entered into in March 2012.
Photograph courtesy / DONG Energy A/S

28

2011 Financial Results
Fiscal Year 2011 in Review
On June 21, 2012, the Incorporated Administrative Agency Nippon Export and Investment Insurance (NEXI) submitted
financial statements and other financial information for FY2011 ending March 31, 2012 (its 11th year of operation) to the
Minister of Economy, Trade, and Industry.

Overview of Financial Statements
Financial highlights of NEXI’s business (Year end: March 31)

Ordinary profit (loss)
Ordinary income(Millions of yen)

3rd
H15FY

7rd
(FY2007)(FY2008)(FY2009)(FY2010)(FY2011)

931

1,273

1,899

5,724

5,777

9,006

9,436

12,706

13,306

17,286

17,111

16,240

8rd

9rd

10rd

11rd

(Underwriting income)

9,253

9,616

10,051

12,504

11,084

10,538(reference) Premium of original insurance written

44783

34,64436,816

39,606

38,69331,849

9,253

9,615

10,051

10,784

11,075

8,972

－

－

－

1,713

－

1,562

(Investment income)

23

2,978

3,153

4,409

5,869

5,503

(Foreign exchange gain)

－

－

－

198

－

31

Ordinary expenses

8,505

11,433

11,408

11,562

11,334

7,234(Underwriting expenses)

3,674

1,136

3,774

4,431

4,184

1,394

Net premium written
Reversal of outstanding claims provision(reference) Insurance claims paid

3,800

17,15910,441

8,574

8,359

Net claims paid

402

103

1,582

976

749

741

Provision for outstanding claims reserves

76

511

2,198

－

1,768

－

Provision for outstanding commitments reserves

3,327

625

912

3,012

2,409

690

45

2,236

77

－

76

－

(Operating and administrative expenses)

4,705

7,985

7,543

7,116

7,075

5,840

Extraordinary profit (loss)

17,112(84,981)(3,360)11,00915,83017,599Net profit (loss)

18,043(83,709)(1,461)

16,733

21,607

26,605(Foreign exchange loss)

Total assets

302,164

305,703

315,683

339,262

371,754

Net worth

266,814265,359

282,092

303,699

330,304(Note) Extraordinary profits (losses) includes valuation of profits or losses related to government-invested assets.

Profits and Losses
The middle of FY2011 experienced an appreciation of yen and a decrease in Japanese exports, which shrank 3.7%, in marked
contrast to the previous year’s double-digit growth. In this context, the decrease of revenue from Export Credit Insurance
outweighed the increase of revenue from other products, such as Overseas Investment Insurance and Buyer’s Credit Insurance.
Net premium written was JPY9 billion, which was a 19% decrease from the previous fiscal year. Continued from last year,
NEXI conducted the exchange of securities for super long-term government bonds with a higher interest rate, which
contributed to generating an investment income of JPY5.5 billion. The amount of total ordinary income was JPY16.2 billion.
On the other hand, due to commercial and political events in Libya, net claims paid amounted to JPY741 million.
However, ordinary expenses decreased by 36%, JPY7.2 billion, due to amortization of software and other cost reductions.
As a result, ordinary profit was JPY9 billion.
Extraordinary profit, which includes valuation gains from receivables acquired by subrogation that are successfully
recovered according to rescheduling agreement, was JPY17.6 billion.
As a result, net profit for the fiscal year was JPY26.6 billion.
29

Financial Statements

Balance Sheet (As of March 31, 2012)(Millions of yen)Account item

AmountAccount item

(Assets)

Amount(Liabilities)

Cash and cash equivalents

10,441

Outstanding claims reserves

1,331

Securities

277,182

Reserves for outstanding commitments

20,207

Receivables subrogated by paying claims

242,280

Amount due to the reinsurer

7,120

Accrued income

1,843

Deposits received

Accrued premium

6,470

Advance insurance premium

3,023

Reinsurance credit

5,438

Accrued amount payable

8,902

Buildings(Note 2)Equipment and fixtures

113(Note 3)

1,224

Accounts receivable

172

Deposits

406

Software685

Other assets

58

Allowance for uncollectible receivables(174,558)

169

Accrued bonuses

109

Reserves for retirement allowance

319

Other liabilities

270

Total liabilities

41,450(Net Worth)
CapitalGovernment investment
Capital surplus (Note 4)

104,352
140,658

Retained earnings

Total assets

371,754

Second term period reserve fund carried forward

20,349Surplus reserves

38,340

Unappropriated retained earnings

26,605(of which profit for the current year)

26,605

Total retained earnings

85,294

Total net worth

330,304

Total liabilities and net worth

371,754(Notes)
1. Amounts between 1 million yen and 0.5 million yen were rounded up to 1 million yen. Amounts less than 0.5 million yen were omitted.
2. Accumulated depreciation on buildings is JPY187 million.
3. Accumulated depreciation on equipment and fixtures is JPY491 million.
4. The breakdown of capital surplus is as follows:(Millions of yen)

Valuation difference of receivables subrogated by paying claims

45,386

Valuation difference of rescheduled claims

49,225

Valuation difference of commercial risk subrogated receivables(3,838)Valuation difference of capitalized amount

95,271(Net)

140,658

30

Statement of Income (April 1, 2011–March 31, 2012)(Millions of yen)Account title

Amount16,240Ordinary income
Underwriting income
Net premium written

10,538(Note 2)

8,972

Reversal of outstanding claims provision

1,562

Interest income on receivables subrogated by paying claims

4

Investment income

5,503

Income from interest

2Interest on securities

5,083

Gain on sales of securities

418

Foreign exchange gain

31

Others169

Other ordinary income

169

7,234

Ordinary expenses
Underwriting expenses

1,394

Net claims paid (Note 3)

741

Estimated amount of insurance claims recovery(Note 4)

(37)

Provision for outstanding commitments reserves

690

Operating and administrative expenses

5,840

9,006
20,006

Ordinary profit
Extraordinary income
Profit relating to in-kind contribution of receivables acquired by government subrogation (Note 5)

4,290

Reversal of provision for uncollectible receivables relating to in-kind contribution of receivables acquired by government subrogation

15,704
11

Other extraordinary income
Extraordinary loss

2,407

Losses relating to in-kind contribution of receivables acquired by government subrogation(Note 5)

2,392

Other extraordinary loss

15

26,605

Net profit(Notes)
1. Amounts between 1and 0.5 million yen were rounded up to 1 million
yen. Amounts less than 0.5 million yen were omitted.
2. The breakdown of net premium written is
Premium of original insurance written
Refund of premium paid for reinsurance
Premium received for reinsurance
Premium paid for reinsurance(Net)

31,8491,073
1,528(25,479)
8,972

3. The breakdown of net claims paid is
Insurance claims paid
Reinsurance claims recovered
Reinsurance claims to be recovered(Net)

5. The profits and losses related to assets invested by the government
were entered as extraordinary income and loss.		
(1) Breakdown of profits related to assets invested by the government
Interest income(Total)

4,290
4,290

(2) Breakdown of losses related to assets invested by the government
Foreign exchange loss
Interest paid to the insured from recoveries(Total)

116
2,275
2,392

8,359
(7,618)(0)741

4. The breakdown of the estimated amount of insurance claims recovery is(1)Capitalized and evaluated amount of subrogated receivables in connection with rescheduling agreements
1) Bad debt loss
2) Reversal of provision for uncollectible receivables(2)Capitalized and evaluated amount of subrogated receivables in relation to commercial risk claims paid
1) Commercial-risk subrogated receivables
2) Difference of estimated value between the current year and the previous year concerning subrogated receivables capitalized in line with the outstanding claims provision
3) Bad debt loss
4) Reversal of provision for uncollectible receivables(Total)

31

0
(4)
(138)
116
1
(11)
(37)

Statement of Cash Flows (April 1, 2011–March 31, 2012)(Millions of yen)

Ⅰ . Cash flows from operating activities
Premium received

37,544

Reinsurance premium paid

(27,174)

Insurance claims paid

(8,359)

Reinsurance claims received

2,404

Income from recovery of receivables subrogated by paying claims

19,690

Payment of recovered receivables subrogated by paying claims(18,284)

Income from recovery of receivables subrogated to the government

8,709

Payment of recovered receivables subrogated to the government(8,546)

Personnel expenses(1,418)Other operating expenses(3,594)

Others349

Subtotal

1,322Interests received

8,914
－

Interests paid

Net cash provided by operating activities

10,236

Ⅱ．Cash flows from investing in activities
Payment into time deposits(389)

Withdrawal of time deposits

379

Purchase of securities(61,165)

Redemption and sales of securities

48,914Purchase of fixed assets(46)

Reversal of deposits

72

Payment of deposits(0)

Net cash (used in) provided by investing activities(12,235)

Ⅲ．Cash flows from financing activities

Net cash (used in) providaed by financing activities－

Ⅳ．Foreign exchange difference related to cash and cash equivalents

37

Ⅴ．Net increase (decrease) in cash and cash equivalents(1,962)

Ⅵ．Cash and cash equivalents at the beginning of the current year

12,403

Ⅶ．Cash and cash equivalents at the end of the current year

10,441(Notes)
1. Amounts between 1 million yen and 0.5 million yen were rounded up to 1 million yen. Amounts less than 0.5 million yen
were omitted.
2. The breakdown of cash at the end of the current year by title of balance sheet is(Millions of yen)

Cash and cash equivalents
Balance of cash at the end of the current year

10,441

Total 10,44132NotesI. Important Accounting Principles
1. Application of revised accounting standards for incorporated
administrative agencies,
Beginning from the fiscal year ending March 31, 2012, NEXI’s financial
statements are being prepared under the revised accounting standards forincorporated administrative agencies.

2. Accounting procedures for depreciation(1) Depreciation of tangible fixed assets
Depreciation of tangible fixed assets is calculated by adopting a straight-line
depreciation method. Useful life and residual values are calculated based on
the same methods and standards stipulated in the Corporation Tax Act.
(2) Amortization of intangible fixed assets
Amortization of trademark rights have been calculated using a straight-line
depreciation method that fixes its residual value at \0, in accordancewith the estimated useful life stipulated in the Corporation Tax Act.
Amortization of computer software being used in-house is calculated bya straight-line depreciation method that views the usability period (14years) as estimated useful life and sets its residual value at \0.

3. Calculation basis of reserves for retirement allowances and estimates
To prepare for retirement allowance payments to board members andemployees, a reserve is provided based on 100% of the amount of retirement
allowances required by the rules for payment of retirement allowances toboard members and by those that apply to employees, respectively. In
accordance with the statement of administrative services costs, estimatedincreases in retirement allowances with no reserves set aside are computedby deducting “retirement allowance estimates at the end of the previous
fiscal year for those who resigned” from the amount arrived at by deducting“the retirement allowance estimate at the end of the previous fiscal year”
from the“ retirement allowance estimate at the end of the current fiscal year”
for all employees at the end of the current fiscal year.

4. Calculation of reserves for outstanding commitments, outstanding
claims reserves, receivables subrogated by paying claims, and allowances
for uncollectible receivables
Reserves for outstanding commitments, outstanding claims reserves,receivables subrogated by paying claims, and the allowances for uncollectible
receivables are dealt by calculating the respective amounts in accordancewith the following ordinance: “Concerning the calculation methods
ordained by the Ministry of Economy, Trade, and Industry, pursuant to thearticles of the ministerial ordinance with regard to the finance and accountingof the Incorporated Administrative Agency Nippon Export and Investment
Insurance” (2001.03.27 Trade No.2).

5. Calculation of accrued bonuses
Accrued bonuses for board members and employees are provided basedon the amount remaining in the fiscal year according to the rules forremuneration of board members and employees, respectively.

6. Valuation standards and methods for securities(1) Held-to-maturity securities are valued at amortized cost (using a straight-line method).
(2) Other securities without market value are stated at cost using the movingaverage cost method.

7. Valuation of foreign-currency receivables and payables
Foreign-currency receivables and payables are converted into Japanese
yen at fiscal year-end exchange rates.

8. Calculation of opportunity costs in the statement of administrative services costs
Interest rates for the calculation of opportunity costs relating to investments by thegovernment at t The yield of 10-year government bonds (0.985%) has been applied.

9. Accounting procedure for consumption tax
Consumption tax accounting is based on the “tax included” method.

10. Decommissioning liabilities
Restoration liabilities under the office lease have not been recorded as
decommissioning liabilities because it is impossible to make a fair andreasonable estimate of them due to the unspecified lease period being unandthe lack of a present plan to vacate the currently leased office.

11. Changes to accounting principles
Calculation of receivables subrogated by paying claims
Receivables subrogated by paying claims, accrued income, and amounts
equivalent to the interest to be paid to the insured following the recovery ofreceivables subrogated by paying claims, which were recorded as net amountof receivables subrogated by paying claims, are recorded as receivables
subrogated by paying claims, accrued income, and accrued amounts payable,
respectively, in accordance with changes in calculation of the receivables
subrogated by paying claims stipulated in Article 3, Paragraph 1, Item 1 ofthe ordinance “Concerning the calculation methods specified by the Ministryof Economy, Trade, and Industry, pursuant to the articles of the ministerial
ordinance with regard to the finance and accounting of the Incorporated
Administrative Agency Nippon Export and Investment Insurance” (2001/03/27
Trade No.2). As a result of the changes, the amounts of receivables
subrogated by paying claims, accrued income, and accrued amounts payable
have increased by JPY8,067 million, JPY758 million, and JPY8,825 million,
respectively, compared to the amounts before the calculation changes.

II. Financial Instruments
1. Financial instruments
a. Management of financial instruments held by NEXI

33

NEXI is engaged in the trade and investment insurance business.
Recoveries of receivables subrogated by paying claims are invested insecurities to strengthen 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.
c. Financial instruments and risk management(1) Country risk management
In concluding insurance contracts (that could cause the acquisition ofreceivables 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. Concluded contracts are monitored by the Monitoring
Committee for continued risk management.
(2) Credit risk management
For the management of credit risk of an export contract counterparty(overseas buyer), NEXI’s
Credit Administration Group conducts a credit check and assessmentof overseas buyers.
(3) Market risk management
Market risk, such as interest rate and price fluctuation associated withinvestment in securities, is managed by the Fund Operation Meetingthat discusses NEXI’s investment policies and checks investment
statuses. In addition, NEXI’s Accounting Group, the secretary of theFund Operation Meeting, monitors the bond market and liquidity risks.
d. Supplementary explanation regarding fair value of financial instruments
Fair value of financial instruments is based on quoted market price. If themarket price is not available, fair value is based on reasonably assessedvalue. Fair value of financial instruments is measured based on certain
assumptions, and might differ if measured based on different
assumptions.

2. Fair value of financial instruments
The carrying amounts, fair value, and differences on the balance sheet asof the end of the fiscal year 2010 are(Millions of yen)

Carrying
amount10,441

Fair
Differencesvalue
10,441－

277,182

293,447

16,265

Receivables subrogated by paying claims 242,280
Allowance for uncollectible receivables(*) (174,558)(Net)
67,722(4) Accrued premium
6,470(5) Reinsurance credit
5,438
Assets367,252(6) Amount due to the reinsurer
7,120
Liabilitie
7,120

67,722
6,470
5,438
383,518
7,120
7,120

－
－
－
16,265－－(1) Cash and cash equivalents(2) Securities
Held-to-maturity securities(3) Receivables subrogated by paying claims(*) Allowance for uncollectible receivables associated with receivables
subrogated by paying claims is deducted.
(Note1) Fair value measurement of financial instruments and securities(1) Cash and cash equivalents
Fair value of deposits with no stated maturity is equal to carrying value,
since it approximates the carrying value.
(2) Securities
Fair value of securities is based on the quoted market value or value
quoted by financial institutions. Carrying amount, fair value, anddifferences of held-to-maturity securities (in accordance with the accounting
standards for incorporated administrative agencies and notes) are(Millions of yen)Type ofsecurities
Fair value>
Government andCarrying amount municipal bonds
Fair value>
Government andCarrying amount municipal bonds
Total

Carrying
amountFair
value

Differences

262,133

278,406

16,272

15,04815,041(7)

277,182

293,447

16,265The aggregate sales price of held-to-maturity securities sold during thebusiness year is JPY13,997 million. The aggregate gain on sale is JPY418
million. These securities, which were purchased before the previous
medium term, were sold for the reinvestment into higher yielding securities
in response to the changing interest-rate environment. Therefore, they
continue to be classified as held-to-maturity securities in accordance withthe provision of Note 23 (2) of the accounting standards for incorporated
administrative agencies.
(3) Receivables subrogated by paying claims
Regarding receivables subrogated by paying claims, allowances foruncollectible receivables are recorded pursuant to the ordinance “Concerning
the calculation methods specified by the Ministry of Economy, Trade, andIndustry, pursuant to the articles of the ministerial ordinance with regard tothe finance and accounting of the Incorporated Administrative Agency Nippon
Export and Investment Insurance” (2001/03/27 Trade No.2).
( i ) Allowances for uncollectible receivables associated with receivables subrogatedby paying political risk claims are calculated using a ratio that is based on
the valuation by the global financial market regarding repayment prospectsof each debtor country or by using a given ratio.
(ii) Allowances for uncollectible receivables associated with receivables
subrogated by paying commercial risk claims are calculated in two different
ways. For receivables from debtors that are actually or nearly bankrupt,
allowances are calculated by deducting foreclosure estimates andestimated amounts recoverable under a payment guarantee. For
receivables from other debtors, allowances are obtained by calculating
loss estimates based on the present value of estimated future cash flowor estimated amounts recoverable by foreclosure or under a payment
guarantee. Fair value of receivables subrogated by paying claims is equal
to the carrying value at the fiscal year end less allowances for uncollectible
receivables, since it approximates this net carrying value.
(4) Accrued premium, (5) Reinsurance credit, and (6) Amount due to the reinsurer
Fair values of accrued premiums are equal to the carrying value, since itapproximates the carrying value as they are settled in a short period of time.
(Note2) Expected payment and redemption amount of money claims andsecurities with maturity after the fiscal year end(Millions of yen)More More
More
More
More
Undeterthan
than
than
1 year thanmined
1 year 3 years 5 years 10 years thanor less through through through through 20(*)
3 years 5 years 10 years 20 years years

Securities−
20,000
Held-to-aturity 11,000
Securities
Receivables
subrogated by 13,951 21,565 20,803
paying claims
Total
24,951 21,565 40,803

44,000201,500−−

41,35048,255−96,35685,350249,755−

96,356(*) The receivables subrogated by paying claims that are in arrears are classified
as “Undetermined.”

III. Account Titles Used by NEXI
(1) Balance sheet
Account title

description

Receivables subrogatedby paying claims

Total assets of receivables subrogated by NEXI’s paying claims and the estimated amounts of potential subrogated receivables(recorded as assets with outstanding claims reserves being reported).

Accrued income

Total accrued interest on time deposits, securities, and receivables subrogated by paying claims (receivables subrogated by paying
political risk claims) as of the end of the fiscal year.
For receivables subrogated by paying political risk claims, accrued interest is included ifshould the receivables are deemed collectible.

Accrued premium

Accrued insurance premiums incurred associated with insurance applications.

Reinsurance credit

Amounts receivable from the government, such as reinsurance claims.

Outstanding
claims reserves

Amounts considered necessary under future insurance contracts to cover incurred losses or losses recognized as having been
incurred at the end of the fiscal year, recorded based on the ordinance “Concerning the calculation methods ordained by the
Ministry of Economy, Trade, and Industry, pursuant to the articles of the ministerial ordinance with regard to the finance andaccounting of the Incorporated Administrative Agency Nippon Export and Investment Insurance” (2001/03/27 Trade No.2).

Reserves foroutstanding
commitments

Amounts reserved to prepare for possible future claim payments under insurance and reinsurance contracts are recorded
based on the ordinance“Concerning the calculation methods ordained by the Ministry of Economy, Trade, and Industry, pursuant to the articles of theministerial ordinance with regard to the finance and accounting of the Incorporated Administrative Agency Nippon Export andInvestment Insurance” (2001/03/27 Trade No.2).

Amount due to the reinsurer

Amount payable to the government (reinsurer) such as reinsurance premium.

Allowance foruncollectible receivables

Amount of receivables subrogated by paying claims after deduction of recoveries should be paid to the insured.

Advance insurance premium

Insurance premium received with NEXI’s obligation beginning from the next fiscal year or later.

Capital surplus

The valuation difference of an in-kind contribution of receivables acquired by government subrogation.
○ Valuation difference of receivables subrogated by paying claims
Valuation difference of receivables acquired by subrogation and contributed in-kind by the government (excluding accrued
income) was included in capital surplus (for the fiscal years ending March 2003, 2004, and 2005), in accordance with an
ordinance concerning a partial revision of the Ordinance of Finance and Accounting (Ministry of Economy, Trade, and Industry
Ordinance No. 49 of March 31, 2003).
○ Valuation difference associated with capitalization
Since the fiscal year ending March 2006 (FY2005), receivables acquired by subrogation and contributed in-kind by thegovernment that were capitalized and evaluated for the first time are included in the capital surplus, in accordance with an
ordinance concerning a partial revision of the Ordinance of Finance and Accounting (Ministry of Economy, Trade, and Industry
Ordinance No. 100 of October 28, 2005).

(2) Statement of income
Account title

description

Net premium written

Amounts calculated by deducting paid reinsurance premiums from premiums written. Premiums written
include premiums received from foreign ECAs.

Reversal of outstanding claims provision
Net claims paid

Reversal of outstanding claims provision for the current fiscal year.
Amounts calculated by deducting reinsurance claims recovered from paid insurance claims. Paid insurance
include claims paid to foreign ECAs.

Estimated amount of insurance claims recovery

Valuation gains or losses of receivables subrogated by paying insurance claims.

Provision for outstanding commitments reserves

Provision for outstanding commitments reserves for the current fiscal year.

Extraordinary income

Interest income and reversal of provisions for uncollectible receivables relating to assets invested by thegovernment (receivables subrogated by paying claims).

Extraordinary losses

Foreign exchange losses relating to government-invested assets (receivables subrogated by paying claims).

VI. Other Accounting Information Necessary to Understand NEXIs Current Situation
In accordance with the “Basic Policy on the Review of System and Organization of Incorporated Administrative Agency” (Cabinet Decision dated January 20, 2012) and “Basic
Policy on the Special Account Reform” (Cabinet Decision dated January 24, 2012), the Special Account for Trade Reinsurance will be abolished by the end of FY2015 following thelegal revision, and its funds transferred to NEXI will be established as a new special company wholly owned by the government.

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Fourth-Term Objectives
NEXI has set its medium-term objectives for the fourth term of FY2012 to FY2015 and will implement measures andpolicies based on these objectives.
According to the decisions made at the cabinet meeting of January 2012, and based on the “Strategy for Rebirth ofJapan,” NEXI will transition into a special company aimed at achieving greater effectiveness and f lexibility ofmanagement, allowing us to integrate more closely with the government's policy direction. Post transition, NEXI will
be required to improve and expand the trade insurance business, as well as reinforce the operating framework of theinsurance approval process and risk management, in order to strengthen the competitiveness of Japanese companies andenhance customer convenience.
Considering that trade insurance is financed by premiums from customers without recourse to government subsidy, we
will need to achieve a truly efficient and effective management style based on the cost-benefit relationship between theinsurance business’s income and its operating and personnel costs. During the implementation of the objectives, preparations
for a smooth transition to the new organizational format will be undertaken.
If the transition to the new organizational format takes place before the end of the fourth term, the implementation
period for the objectives shall be up to the day before the transition.

1 Measures to improve the quality of NEXI’s services and other operations
１

２

３

Product Improvement
Our actions will be in response to the Japanese trade and industry policy while proactively addressing customer needs in the changing
business environment. Our products will aim at providing high quality services equivalent with other countries to secure theinternational competitiveness of Japanese companies.

Improvement of services
By adopting a “customer perspective” at all times, every effort will be put into improving services and building relationships of trustwith our customers.

System streamlining reinforcing risk management and ensuring fair operation
We will streamline the system by developing human resources to reinforce management of risks and claims assessment, as well asinternal controls and compliance.

４

Emphasizing strategic priority policy issues
In light of our role as the public institution responsible for developing Japan’s overseas trade, the requirements of the state policy on
trade, industry, and natural resources and energy must be considered. As such, we will take initiatives to address the policy issues set
forth in the medium-term objectives and expand the scope of underwriting in the relevant areas both qualitatively and quantitatively.
We will accordingly promote products and structures [Remark 3] aimed at increasing the underwriting in these areas.

５

Smooth entry of private insurers into the market
It is our continuous endeavor to improve the diversity of our products in order to provide variety to our customers, as well as
establish an environment resulting in an increase in the business opportunities for private insurers.

35

2 Improvement in Business Efficiency
１

Promotion of efficient business operations
NEXI’s trade insurance system is being operated independently, without subsidy from the government, with its sole source of revenue
being the insurance premiums received from insurance users. Therefore, when making disbursements, we will be thoroughly costconscious and fully consider cost-effectiveness in order to improve the efficiency of our business operations.
(1) In accordance with the medium-term objectives, we will make necessary improvements toward more advanced risk analysis and assessment, along with improving

publicity activities. At the same time, necessary action to improve operational efficiency through measures such as rationalization of the operating process, enhancementof staff abilities, and promotion of outsourcing will be undertaken. Also, when necessary, the structure of the organization and personnel assignments will be revised
according to the workload. Necessary steps will be undertaken to increase cost-effectiveness in all areas, including personnel expenses, by carefully evaluating theappropriateness of each expenditure, by using cheaper sourcing, and by efficient usage of the operating expenses.
(2) Based on the incorporated administrative agency reform, we will take into account the government employees’ pay scales and curb our overall personnel expenditures.
By revising ability-based benefits and other benefits while maintaining necessary staff expertise in areas such as international financing, we will appropriately
decrease the Laspeyres Index.
(3) In principle, NEXI’s entrance into new procurement contracts will be based on competitive procurement processes such as competitive tendering. Non-competitive
bidding or application will be avoided as much as possible, and will try to steadily implement reforms based on a “program for reviewing no-bid contracts.”(4) We will undertake the promotion of the efficiency of operations through consignment of some office work and business operations to private financial institutions, etc.

２

Efficient development and smooth operation of the information system
In response to organizational reform toward a new company setup, we aim at adapting our information system to new accounting/ tax
systems, a new contingency plan, and new product development and marketing. Monitoring of credit management to ensure that it will
not be adversely affected by the abolishment of the special account related to the government’s reinsurance will be undertaken. We aimat the realization of efficient operations and improved services through prompt maintenance and upgradation of the fourth-term
information system. In order to measure our progress, we will report the tangible results of the fourth-term information system andattempt to bring the fourth-term maintenance cost lower than the third term.

3 Improvement in composition of finances
１

Financial base reinforcement ofIn order to continuously and stably offer our customers “assured peace of mind,” we ensure the maintenance of a sound financial foundation.
In concrete terms, we will improve the efficiency of business operations and hold down expenditures by thorough risk management. In
addition, we will set up an appropriate insurance premium charge system and reinforce appropriate management and recovery of debts
incurred by insured risks in order to secure a steady revenue stream.

２

Reinforcement of credit management and debt recovery
We will strengthen our recovery capacity through meticulous management of credit data, close coordination with relevant governmentalorganizations, cultivating staff expertise, and utilizing servicers. Further, we will strive to prevent the occurrence of insured risk and to
alleviate any loss by swiftly implementing necessary measures in cooperation with customers and relevant governmental organizations.

3

Clear and transparent standards for setting and reserving premiums
In accordance with the decision to abolish the trade reinsurance special account and to reform incorporated administrative agencies, wewill work toward reviewing our accounting rules and operations. By developing clearer and more transparent standards for setting andreserving premiums, we will ensure added transparency in accounting.

4 Responding to the new system based on the administrative reform

We will ensure a smooth transition to the new setup as a company wholly owned by the government and lacking the trade reinsurance
special account. This will include a quick implementation of necessary measures such as strengthened risk management and internal controls.

5 Fostering personnel with high degree of expertise

As an expert organization providing quality services that meet customers’ needs, we will implement an improved personnel system and raise the expertiselevel of our staff through a more comprehensive in-service training system and place a high priority on the development of expertise. We will also
continue to recruit staff members with expertise in fields such as international financing, the legal system, country risks, business finance, and trade.

36

Customer Service Charter
Ⅰ NEXI Spirit
Our mission is to assist customers to conduct international（1）business with a sense of reassurance by reducing incidental
business risks. To this end, we take time to ascertain ourcustomers’ situations so that we can meet their needs precisely
and provide efficient and high-quality services, thereby enhancing
customer satisfaction and establishing mutual trust.
By implementing our customer-first policy, we will continue to:（2）
ⅰ Improve the quality of service,
ⅱ Broaden the range of risk coverage,ⅲ Promote efficient operations, andⅳ Increase management transparency.

Ⅱ NEXI’s Pledge to Customers
We are committed to:Providing insurance products that make our customers（1）
feel secure and protected when conducting overseas
transactions
Providing advice to our customers from the preliminary（2）stage of planning
Promptly responding to inquiries and acting in the（3）interests of our customers
Meeting our customers’ demands and business needs（4）
Promptly completing assessment and payment of（5）
insurance claims, andPromptly allocating recoveries（6）

Providing insurance products that make our customers feel（1）
secure and protected when conducting overseas transactions
ⅰ If you suspect that your international transactions, including
exports, foreign investments, or overseas loans, may incurrisk, please visit our website (http://www.nexi.go.jp) and
go to the insurance product section, or contact NEXI’s
Customer Relations Office.
ⅱ Our staff can be dispatched to your office at your request to
provide further information on our insurance products that
support and protect your international business. Please feel
free to contact us.
Providing advice to our customers from the preliminary stage（2）of planningIf you plan to initiate international transactions, such as exports
or overseas investments, NEXI is ready to serve you. We will
be pleased to talk with you at an early stage of your project’s
formation and propose the most appropriate insurance products
to minimize any risk involved.
Promptly responding to inquiries and acting in the interests of（3）
our customers
ⅰIf you have any questions about insurance products , pleasecall or email our Customer Relations Office or the relevantgroup in charge.
ⅱOur premium calculator is available on the NEXI
website to estimate your insurance premium. If you
give us information on your planned transaction, thegroup in charge can generally estimate the premiumon the same day of your inquiry, or on the following
business day at the latest. (For medium or long-term

37

non-L/G transactions, however, we will respond within
five business days.) If the group in charge finds it difficult to
respond to your inquiry within the specified time limits, it willpromptly notify you to that effect along with the reason forthe delay and the expected date of response.
ⅲ Should the group in charge find any inadequacy in a
pre-application form, insurance application form, or otherform that you have submitted (other than environmentrelated forms), we will notify you within five businessdays of our receipt at the latest.
ⅳ If you have any questions about NEXI’s insurance systemwith regard to a specific project, please inform the group in
charge or the Customer Relations Office. We will respondwithin five business days at the latest. Should we find
it difficult to respond within the stated period, we willpromptly notify you to that effect with the reason for thedelay and the expected date of response.
Meeting our customers’ demands and business needs（4）ⅰ We would be very appreciative if you could give us sufficient
time when consulting with us, as our assessment may takelonger than expected. If it becomes necessary to accelerate
procedures (for example, because an export contract isproceeding more rapidly than anticipated), please inform us.
ⅱ Your business needs are always important to us and we will
do our utmost to meet your accelerated deadline. If we find it
difficult to meet the new deadline, we will immediately informyou of how long it will take to complete the necessary procedures.
Promptly completing the assessment and payment of insurance claims（5）ⅰ As soon as we receive an insurance claim form, we willassess the details in light of the insurance policy provisions
to determine the amount of the claim to be paid. We willthen make a payment within the stipulated time. Thisis generally within two months of receipt of the claim;
however, in a situation where more time is required forassessment, this rule does not apply. For an application for
insurance claims, we may request that you execute theobligations of notification and of loss prevention and reductionthat are stipulated in such documents as insurance policy
provisions. In addition, we may also request that you submit
all necessary documents stipulated in the insurance policy
provisions and other regulations within a specified time.
ⅱ In the event that an inadequacy is found in a submitted
claim form or other document in light of insurance policy
provisions or other regulations, we will notify you no later
than three business days after receiving the document.
ⅲ We would appreciate your understanding and cooperation,
including early submission of documents necessary forassessment, so that we may pay claims within the period
stipulated in the insurance policy provisions or other regulations.
Promptly
allocating recoveries（6）
When
all or part of a subrogated claim is recovered, we willⅰ
promptly allocate the recovery in accordance with insurance
policy provisions and other contracts.
ⅱ In allocating a recovery in accordance with a Paris Club debt
rescheduling program or other program, we will in principle
complete procedures of remittance to your accounts by thebusiness day following the confirmation of receipt of the fullamount in NEXI’s account.

Ⅲ Information

Ⅳ Your Comments and Complaints

A range of information is available on our website(http://www.nexi.go.jp) and in our annual report.
The website was renovated in April 2011 to realize
better usability and accessibility based on requests
from our customers.

Enhancing customer satisfaction is our constantaim. If you experience difficulty with any procedureor have a complaint about our services, please do
not hesitate to contact us. Your problem will be
addressed promptly.

Please visit our website for comprehensive information on our（1）
insurance products and services.
The NEXI website includes the following information
ⅰ Recent developments (including changes in systems, coverage
conditions, and recent underwritten projects)
ⅱ Description of our insurance products (pamphlets areavailable)ⅲ Terms of coverage by country/regionⅳ Insurance application proceduresⅴ Insured events and subsequent proceduresⅵ Premium calculatorⅶ Downloadable application forms
ⅷ Rules concerning trade insurance (including insurance
policy provisions for all of NEXI’s insurance products)
ⅸ Environmental considerations
ⅹ Procurement informationⅺ Web magazine “e-NEXI”
ⅻ WEB service

We will do whatever is necessary to resolve any problem you（1）
may encounter. Please provide us with the details of the
problem and what you wish to be done. We will immediately
find the source of the problem and resolve it.

Our annual report (in Japanese and English) offers the results（2）
of our trade insurance business and our financial statements.
Other publications are also available, including the NEXI
corporate brochure and leaflets on our insurance products(though there is a limited supply of these). Please feel free tocall the General Management and Public Relations Group(Phone: 81-(0)3-3512-7655) or the Customer Relations Office.

If you have any complaints about our services or our handling（2）of your project, please inform the Customer Relations Office.
ⅰ For any complaints about our services, please provide thedetails to the Customer Relations Office in writing or via
email. The Customer Relations Office will examine yourproblem and inform you of how it will be dealt with. If it isdifficult for us to take immediate action, we will provide thereason for the difficulty and how we intend to proceedⅱ If you have any complaint about our handling of a specificproject, please provide the details to the Customer Relations
Office in writing or via email. The Customer Relations
Office will review the details and provide the results of its
review without delay. If immediate action cannot be taken,
the Customer Relations Officer will inform you of thereason and when the problem will be resolved.

（3）For inquiries regarding our website, annual report, and anyother public relations matters, please contact the General
Management and Public Relations Group. (Phone: 81-(0)33512-7655)

38

Profile of NEXI

From the left:Keiji Wada（Vice Chairman）,Takashi Suzuki（Chairman and CEO）,
and Fuminori Inagaki（Vice Chairman）
Members of the Board and the Audit Board
Chairman and CEO................... Takashi Suzuki
Vice Chairman........................... Keiji Wada
Vice Chairman........................... Fuminori Inagaki...... Takeshi Oiwa
Corporate Auditor（Full Time）
Corporate Auditor（Part Time）...... Takashi Imai
Takeshi Oiwa
Takashi Imai
（Corporate Auditor） （Corporate Auditor）

39

Name

Incorporated Administrative Agency, Nippon Export and Investment Insurance ("NEXI")

Date of
Establishment

April 1, 2001

Acts

Act on General Rules for Incorporated Administrative Agency
Trade and Investment Insurance Act

PurposeTo efficiently and effectively conduct insurance business of covering risks whicharise in foreign transactions and which are not covered by commercial insurance.

Competent
Minister

The Minister of Economy, Trade and Industry

Capital

JPY104.4 billion (Fully contributed by the Japanese Government)(Unchanged from the previous year)

Number of
Full-time
Employees

139 (As of April 1, 2012)

Scope ofBusiness

1. To conduct trade and investment insurance business operations complying with the regulationsof Chapter 3 of the Trade and Investment Insurance Act.
2. To conduct business which is incidental to the business stated in 1.
3. To underwrite reinsurance under the insurance obligations of international institutions, foreign
governments, or international companies that conduct insurance business（including
reinsurance） which indemnifies losses similar to the losses covered by trade and investment
insurance.
4. To entrust reinsurance for the insurance obligation of NEXI under the Trade and Investment
Insurance Act to international institutions, foreign governments, or international companies
that conduct insurance business （including reinsurance） which indemnifies losses similar tothe losses covered by trade insurance as well as the reinsurance with the Government complying
with the regulations of Chapter 4 of the Trade and Investment Insurance Act.

Brief History

Jul.1999
Enactment of Act on General Rules for Incorporated Administrative Agency
Dec.1999
Enactment of the Act which partly amended the Trade and Investment Insurance Act
Apr.2001
Establishment of Nippon Export and Investment Insurance(For reference)The Trade and Investment Insurance Act was enacted in March 1950 and thereafter
trade and investment insurance was managed by the Ministry of Economy, Trade and Industry（former Ministry of International Trade and Industry） until the end of March 2001.

OfficeHead office
Chiyoda First Building, East Wing 3rd Floor, 3-8-1 Nishikanda, Chiyoda-ku, Tokyo 101-8359,
Japan
Phone: 81-(0) 3-3512-7650
Fax: 81-(0) 3-3512-7660
Osaka Branch
Aioi Nissay Dowa Insurance Yodoyabashi Building 8th Floor,
3-1-22 Kitahama,Chuo-ku,Osaka City,
Osaka 541-0041,Japan
Phone: 81-(0) 6-6233-4019
Fax: 81-(0) 6-6233-4001
Overseas Offices
NEXI Paris, NEXI New York, and NEXI Singapore （See page 42.）

Main Insurance
Products

Export Credit Insurance / Buyer's Credit Insurance / Trade Insurance for Standing Orders fromSpecific Buyer / Export Credit Insurance for SMEs / Intellectual Property License Insurance /Overseas Untied Loan Insurance / Overseas Investment Insurance / Export Bill Insurance /Prepayment Import Insurance / Investment and Loan Insurance for Natural Resources andEnergy / Trade and Investment Insurance for Preventing Global Warming / Comprehensive
Export Insurance with Simplified Procedure

URL

http://www.nexi.go.jp

40Organization Chart (as of July,2012)41

Contact Information

42