ANNUAL REPORT
Nippon Export and Investment Insurance

2019

2

Annual Report FY2019

Corporate Philosophy
As the public entity responsible for trade insurance, our mission is todeliver peace of mind to our customers and contribute to the healthy
development of Japanese overseas business.

Action Guideline● Be alert to changes and meet customer needs with professionalism

and specialized expertise.
● Enhance underwriting capacity and capability while maintaining astrong risk management culture.
● Respect diversity and work as a team to allow our organization toachieve its best.

Annual Report FY20193

Message from the
Chairman
Nippon Export and Investment Insurance
Chairman and CEO

Atsuo Kuroda

I would like to express my deep appreciation for yourgenerous support and cooperation with Nippon Export andInvestment Insurance (NEXI) as we present this annual report.
As the global economy already contracted in 2019 dueto the US-China trade tensions and falling oil prices, thecoronavirus outbreak in early 2020 has brought new uncertainty. In such circumstances, NEXI’s underwriting amountin the last ﬁscal year fell below JPY 6.0 trillion for the ﬁrst time since the foundation in 2001, reﬂected by decreases inJapanese export and direct investment.
In ﬁscal year 2019, the third year since NEXI was converted into a special stock company, we set three objectives:to increase insurance customers, reform the trade and investment insurance system, and strengthen international
cooperation. It was precisely in times like this, when uncertainties over economy were growing, that we conductedbusiness with a stronger sense of mission to provide better security to Japanese companies.
In order to increase the number of clients, NEXI conducted top-level sales and strengthened cooperation withrelated organizations to raise awareness of trade and investment insurance. We also worked towards creating
an environment to encourage more customers to use Overseas Investment Insurance, by sharing risk throughreinsurance with private insurance companies.
With respect to reforming the trade and investment insurance system, NEXI launched a new insurance productcalled Loan Insurance for Green Innovation. It was intended to support projects related to sustainable environmentand climate change by providing a higher coverage rate than regular loan insurance products. Additionally, we
signed memorandums of understanding on cooperation with 13 domestic and foreign ﬁnancial institutions, aiming
to build a fund bond scheme that would attract new fund providers to meet the global demand for infrastructure
investment.
Furthermore, to strengthen international cooperation, NEXI enhanced support and network in Africa throughparticipation in the 7th Tokyo International Conference on African Development (TICAD7), where we signed MOUs
with three international organizations and held the ﬁrst side event. Also, aiming to support Japanese companies’
business expansion in third countries, we signed MOUs with governmental institutions and export credit agencies ofsuch countries as the United States and Thailand, which resulted in setting up concrete projects.
In addition to the above initiatives, NEXI announced measures against the global coronavirus pandemic in early
2020, which included covering supply chain risk by investment insurance, supporting Japanese companies’
overseas subsidiaries to procure working capital, and easing underwriting criteria for Prepayment Import Insurance
for the import of medical supplies. In this unprecedented economic crisis, we have been strengthening support tomake our customers feel more secured in conducting overseas transactions.
Some experts say that global supply chains will be transformed and globalization will come to an end in the post
coronavirus world. However, I consider globalization as inevitable for Japan whose domestic market is expected
to shrink. Given the above, NEXI continues to provide quality trade and investment insurance to meet increasingly
diverse global business needs.
This year, Japan’s trade insurance system celebrates its 70th anniversary. Appreciating all who have been involvedin supporting overseas expansion of Japanese businesses, NEXI’s executives and employees continue to contributeto the sound development of Japanese companies’ international transactions. As the public institution engaged inJapan’s trade insurance business, we remain committed to providing better security to more insurance clients under
the customer-ﬁrst principle. We appreciate your continued understanding and support for our business.

July 2020

4

Annual Report FY2019

Contents
Corporate Philosophy & Action Guideline ────────────

2

Message from the Chairman ────────────────────

4Opening Items ─────────────────────────────

670th Anniversary of Trade and Investment Insurance
NEXI’s Response to Major Crises

NEXI Review of Performance
Performance Highlights ──────────────────────── 10
Review of Performance ──────────────────────── 16
TOPICS ──────────────────────────────── 20

NEXI Activities
Main Activities ───────────────────────────── 22
International Cooperation ─────────────────────── 30
Projects Covered by NEXI Insurance ───────────────── 32
SME Exports Covered by NEXI Insurance ────────────── 38

Insurance Products
Trade and Investment Insurance ― How It Works ────────── 46
Insurance Products to Support Your Business───────────

47

Insurance Application Process ──────────────────── 54
TOPICS ──────────────────────────────── 58

About NEXI and Organizational Operation
Proﬁle of NEXI ───────────────────────────── 60
Business Plan ───────────────────────────── 62
Business Operation and Management System ─────────── 64
Organization Chart──────────────────────────

66

Access Map ────────────────────────────── 67
TOPICS ──────────────────────────────── 68

FY2019 Financial Results
FY2019 Financial Review ─────────────────────── 70
Financial Statements etc. ─────────────────────── 71

Figures in this Annual Report
In principle, figures in this report are rounded to the nearest unit. Therefore, the sum of
individual ﬁgures may deviate from the sum presented. Figures that fall below a unit as aresult of rounding are indicated as “0”; if there is no corresponding ﬁgure, “–” is indicated.
Figures in the trade and investment insurance business are on a ﬁscal period basis unlessotherwise noted.

Annual Report FY2019

5

Japan’s trade and investment insurance business celebrates
its 70th anniversary in 2020, since it was initiated withthe enactment of the Export Credit Insurance Law in 1950.
The timeline below illustrates a brief history fromthe post-WWII reconstruction period to the present.

1950s 〜 1960s
Launch of Export Insurance System as an Export Promotion Policyin the Post-WWII Reconstruction Period
Japan’s trade insurance system was initiated under the Export Credit Insurance Law (1950), which wasenacted to acquire foreign currency during the post-WWII reconstruction period by promoting Japanese
exports. The system was designed to cover losses due to failed shipment and unrecovered payment
arising from political risk. Although the system initially provided only a few insurance products and limited
coverage, in response to increasing export volume and diversified transaction types, it was developed tocover more eventualities including credit risk and additional expenditure. As various measures, such as theintroduction of Comprehensive Export Credit Insurance, led to a steady increase in the number of
insurance users, the system made a significant contribution to Japan’s export promotion.
The export insurance system was operated by the Export Insurance Division of the Ministry of International
Trade and Industry (MITI), which was the predecessor of the Ministry of Economy, Trade and Industry(METI), under a special account (i.e. independent of general national budget) in the long-term break-evenprinciple.
In the 1960s, foreign currency transfer regulations imposed by developing countries such as Indonesia
triggered multiple political risk events, which resulted in large-scale insurance events.

1950

1987

Export Credit Insurance
Law was renamed to
Trade and Investment
Insurance Act.

1970s 〜 1990s
Responding to Sophisticated Trade Structures,
International Cooperation Frameworks, and Larger Insurance Claims

Export Credit Insurance
Law was enacted.
Export Insurance Division
was established in the
Ministry of International
Trade and Industry (MITI).

As the Japanese government (the Government) gradually liberalized foreign direct investment, Overseas
Investment Insurance was introduced in 1970. Also, Buyer’s Credit Insurance was launched responding
to a shift in the form of providing credit for large machinery plant exports from long-term installment
payments to bank loans to importers.
Furthermore, as Japan’s trade structure became sophisticated, the Government took a series ofmeasures to improve the export insurance system, such as the launch of new insurance products:
Prepayment Import Insurance in the 1990s to meet demand for increasing import volume and Overseas
Untied Loan Insurance to support national interest projects. As a result, the current trade andinvestment insurance system, which consists of three pillars of export ( import ) , investment andfinancing, was established.
With Japan’s status in cross-border trade being elevated, Japan joined two major global frameworks attheir requests. One is the Berne Union a leading global association for the export credit and investment
insurance industry, and the other is the OECD Arrangement on Officially Supported Export Credits aninternational arrangement intended to avoid excessive export competition. For the same purpose, theGovernment gradually improved the reinsurance system with overseas export credit agencies.
From the 1980s to the 1990s, many large insurance claims were made due to the deterioration in the
Middle East situation such as the Iran-Iraq War. Additionally, the Asian Financial Crisis, which took placein the second half of the 1990s, discouraged private insurance companies to issue policies. In themeantime, however, the export insurance system continued to provide insurance as a public service,acting as a last resort.

Major International Events

6

Korean War

Vietnam War

Normalization of Japan-China
Diplomatic Relations

Iran-Iraq War

End of Cold War

1950

1965

1972

1980

1989

Latin American Debt Crisis

Gulf War

1982

1991

Suez Crisis

Establishmentof ASEAN

First Oil Crisis

Plaza Accord

Asian Financial Crisis

1956

1967

1973

1985

1997

Annual Report FY2019

2019

2017
NEXI formulated thecorporate philosophy andaction guideline.

2001
NEXI was converted intoa special stock company.

Nippon Export andInvestment Insurance(NEXI) was established as
an incorporated
administrative agency.

2000 onwards
Establishment of NEXI and Support for Japanese Companies’
Overseas Expansion
Nippon Export and Investment Insurance (NEXI) was established in April 2001 as an incorporated administrative
agency which was engaged in practical operations in the trade insurance business, being split from theGovernmental department that had directly run the business. The separation between operational function andpolicy-making function was intended to streamline projects undertaken by the Government, improve service
quality and transparency, and increase staff expertise. Simultaneously, a reinsurance system was establishedunder the Trade Reinsurance Special Account of the Government. These initiatives improved business agility,
which enabled the system to better meet shifting needs in trade insurance, such as regarding Japanesecompanies’ overseas business expansion and an increase in trilateral trade, both of which are accelerated byongoing globalization.
NEXI increasingly provided insurance for long-term and large-scale projects, regarding such as overseas
business expansion of infrastructure system and resource development, and was required to conduct more
complex and advanced risk assessment. Due to such changes, NEXI faced the challenges of further developing
its business agility, expertise and management decision making skills, as well as of better reflecting Government
policies to insurance undertaking and of strengthening governance by the Government.
In these circumstances, NEXI was converted into a special stock company wholly owned by the Government inApril 2017, aiming to improve management flexibility, efficiency and agility as well as to strengthen the unity with
the Government. At the same time, the reinsurance system under the Special Account of Trade Reinsurance of
the Government was abolished. NEXI made a new start as a stock company and addressed to enhance thegovernance through various measures including setting up the board of directors, audit and supervisory board
and evaluation committee.
As the only public institution in Japan’s trade investment insurance business, NEXI continues to contribute to thesound development of Japanese companies’ international transactions, in accordance with Government policies
such as overseas expansion of infrastructure systems, stable supply of natural resources and energy to Japan,
and support for SMEs’ international business. NEXI is committed to providing better security to clients bycarrying out appropriate risk management and meeting their diverse needs.

September 11
Terrorist Attacks

Anti-Japanese
Demonstrations in China

Great East Japan Earthquake

2001

2005

2011

Global Financial Crisis
2008

Iraq War,SARS Outbreak

European Debt Crisis

COVID-19 Pandemic

2003

2009

2020

Annual Report FY2019

7

NEXI’s Response to Major Crises
As the sole public operator of Japan’s trade and investment insurance system,
NEXI’ s mission is to provide security to customers and regularly contribute to thesound development of Japanese companies.
In order to achieve this goal, NEXI has made various measures against crises since
its foundation, based on the accurate grasp of economic and social conditions. It
seeks to ensure that Japanese companies maintain smooth operations in overseas
transactions even in the event of crises.

20
08

Global Financial Crisis
In order to satisfy the financing needs of Japanese companies’ overseas subsidiaries, NEXI
expanded the coverage of Overseas Untied Loan Insurance to include the subsidiaries’ one ormore years of working capital. The underwritten amount stood approximately JPY 1 trillion.
NEXI broadened the reinsurance and coinsurance network, so that it could cooperate with othercountries’ export credit agencies (ECAs) in the event of crises.

20
11Great East Japan Earthquake

20
20

Coronavirus ( COVID-19 ) Pandemic

As a measure against the reputational damage that Japan was contaminated with radiation, NEXI
covered losses incurred by Japanese exporters due to import restrictions or bans in countries
where cargo should have been shipped or business should have been conducted.

The global COVID-19 pandemic starting in early 2020 has not only claimed a large number ofvictims, but also caused enormous damage to the world’s economy, trade and investment.
In order to cover the losses that the outbreak caused to Japanese companies and to support tradeand investment, NEXI is making every possible effort based on the following six basic policies.
▶ Losses due to the COVID-19 pandemic can be covered by export, investment and loan

insurances.
▶ Cross-border supply chain risks are now covered by investment insurance. The new coverage

includes losses due to the investee’s a month or more of business suspension, even if thesuspension is caused by the investee’s parts suppliers and sales partners that have been
affected by COVID-19, regardless of which countries they are located in.
▶ New export and investment projects, as well as existing investment projects, can be covered byinsurance. The coverage includes cases in which export and investment destinations are in theregions where COVID-19 has already spread.
▶ Export and investment risks in transactions that Japanese companies’ overseas subsidiaries

made to third countries can be covered by reinsurance with other countries’ ECAs.
▶ As a response to the funding needs of Japanese companies’ overseas subsidiaries, theirprocurement of working capital can be covered by loan insurance. (The underwriting facility is
JPY 1.5 trillion)▶ In Prepayment Import Insurance, underwriting criteria for the medical supply imports made at therequest of the Government have been eased.
As of June 20208

Annual Report FY2019

NEXI Review of Performance
Performance Highlights

10

Review of Performance

16

TOPICS

20

NEXI Review of Performance

Performance Highlights
Export Trends
Japanʼs export value decreased by 6.0% year on year to approximately JPY 75.9 trillion in FY2019. This is mainly due to adecrease in exports of general machinery, transportation equipment.
Looking at the results by country and region, export to Asia decreased by 7.0% to JPY 40.9 trillion, which includes export to thePeopleʼs Republic of China with a decline of 7.2% to JPY 14.5 trillion. Exports to the U.S. and the EU also decreased by 4.7% to
JPY 14.9 trillion and by 5.1% to JPY 8.5 trillion, respectively. Meanwhile, export to the Middle East increased by 1.4% to JPY 2.3
trillion.
Japanʼs export value(Millions of Yen)

Total Export ValueFY2015FY2016FY2017FY2018FY201974,115,132

71,522,248

79,221,249

80,709,887

75,880,217

(0.7)

(3.5)

10.8

1.9

(6.0)

Year-on-Year Change (%)(Source: Trade Statistics, Ministry of Finance)

Trends of Trade and Investment Insurance Business(Billions of Yen)
300

200

100

0

−100

Outstanding Borrowings
JPY 0

−200

−300

Peak of
Insurance Claims
Paid
JPY 341.9 billion

−400

−500

Premium income

Recoveries andother income

Claims paid

Outstanding borrowings
at year-end

−600

−700

Fiscal Year

Peak of
Outstanding Borrowings
JPY 688.6 billion’81 ’82 ’83 ’84 ’85 ’86 ’87 ’88 ’89 ’90 ’91 ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 ’19

Premium
32.8 37.3 34.1 41.3 46.8 33.4 30.4 21.3 34.2 44.8 35.7 44.7 46.2 44.1 43.5 41.0 46.0 45.4 33.2 32.9 37.3 31.3 43.2 38.0 43.8 34.9 36.8 39.3 38.2 34.4 37.7 36.2 40.6 74.6 51.2 24.5 72.8 31.9 46.2
incomeRecoveries and 5.5 12.3 15.2 25.6 38.9 53.6 34.9 40.0 69.3 38.7 40.7 111.2 77.3 85.2 98.3 121.2 123.0 91.3 84.6 85.3 74.5 70.2 97.7 101.4 228.7 247.3 57.5 41.9 20.5 15.6 17.7 24.0 31.4 35.7 40.9 44.5 31.3 31.1 31.2
other income
Claims paid
Outstanding borrowings at year-end

37.6 62.7 80.5 141.5 164.3 169.0 109.5 164.8 142.7 198.6 341.9 148.2 128.0 80.6 57.1 44.4 30.2 16.7 21.6 32.4 49.9 65.1 23.0 12.9
ーーー

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

0

0

0

0

0

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

10

Annual Report FY2019

0

3.7

2.4

3.8 17.2 10.4

8.6

8.4

4.4 12.2

3.1 22.4

7.8 19.2 33.5 57.1

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

(Billions of Yen)NEXI Review of Performance

Underwritten AmountUnderwritten Amount by Insurance TypeThe underwritten amount decreased by 6.3% year on year to approximately JPY 5.9 trillion in FY2019. This is mainly due todeclining performance in Export Credit Insurance. Meanwhile, Overseas Untied Loan Insurance increased by 23.2% to JPY 0.4
trillion, and Buyer's Credit Insurance increased by 433.5% to JPY 0.2 trillion.
( FY )

6.4 0.3

0.5

0.5 0.2

2015

7.8

NEXI Activities

5.3 0.1

2016

0.4 0.2

0.4

6.3
5.9 0.1

0.6

0.4 0.2

2017

7.3
5.0 0.0

2018

0.3 0.2

0.7

6.3
4.5 0.2

0.6

0.4 0.2

2019

5.9

1

2

Export Credit
Insurance

3

Buyer’s Credit
Insurance

4

5

Overseas Investment
Insurance

6

8 (Trillions of Yen)

7

Overseas Untied
Loan Insurance

Insurance Products

0

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

Underwritten Amount by Region
Asia continued to account for the largest share with 54.5% (JPY 3.4 trillion), followed by the Europe with 12.4% (JPY 0.8 trillion).

52.5

9.5

9.9

9.7

About NEXI and
Organizational Operation( FY )

1.2
6.6 4.1 2.0

4.5

2018
54.5

12.4

8.6

8.0

5.7

5.5 3.9 0.3

2019
1.2

0

20

Asia

Europe40
CentralAmerica60

Middle East

Africa80
South
America

North
America

100 (%)
International
Oceania organizations

Rank

Country / Region

Underwritten amountComposition

Rank

Country / Region

FY2019 Financial Results

Top Ten Countries and Regions for Underwritten Amount in FY2019(Millions of Yen)

Underwritten amountComposition

1

Vietnam

508,266

14.2%

6

Belgium

324,939

9.1%

2

Indonesia

458,938

12.8%

7

Korea

321,932

9.0%

Panama3

Taiwan439,26412.2%

8(ﬂag of convenience vessel)

304,813

8.5%

4

China

428,18711.9%

9

United Arab Emirates

244,227

6.8%

5

Thailand

344,955

9.6%

10

U.S.A

213,373

5.9%

Annual Report FY2019

11

NEXI Review of Performance

Performance Highlights
Outstanding Commitment
Outstanding Commitment by Insurance TypeThe outstanding commitment decreased by 10.0% year on year to approximately JPY 12.6 trillion in FY2019.
( FY )

8.0

0.9

1.5

3.3

0.8

2015

14.5
7.4

2016

0.9

1.5

3.4

0.8

14.1
7.5

0.9

1.5

3.5

0.9

2017

14.3
7.0

2018

0.9

3.6

1.6

0.9

14.0
6.0

0.8

1.6

3.4

0.8

2019

12.6

0

1

2

3

Export Credit
Insurance

45

Buyer’s Credit
Insurance

6

7

8

Overseas Investment
Insurance

9

10

11

12

Overseas Untied
Loan Insurance

13

14

15 (Trillions of Yen)

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

Outstanding Commitment by Region
Asia accounted for the largest share with 49.2% (JPY 6.5 trillion), followed by the Middle East with 12.7% (JPY 1.7 trillion).
( FY )
47.5

13.4

6.5

12.7

6.9

2018
49.2

6.8

6.7

6.4

6.7

6.0

6.0

4.7

4.3

4.5

4.3 4.0 3.4

2019

0

20

Asia

12

Annual Report FY2019

MiddleEast

40

AfricaNorth
America60
International
Europe organizations

100 (%)

80
South
America

Oceania

CentralAmericaNEXI Review of Performance

Premium Income
Trends of Premium Income
Premium income increased by 43.5% year on year to approximately JPY 42.1 billion in FY2019.
( FY )
2015

51.5
46.5

2016
56.1

NEXI Activities

2017
29.4
2018
42.1
2019
0
10

20

30

40

50

60
(Billions of Yen)

Note: For details please see page 18.
Trade Insurance for Standing Orders
from Specific Buyers
1.0%

Premium Income by Insurance Type

Reinsurance 1.7%

Insurance Products

Overseas Untied Loan Insurance accounted forthe largest share with 36.1% (approximately JPY
15.2 billion), followed by Export Credit Insurance with23.6% (JPY 9.9 billion), and Buyer's Credit Insurancewith 21.4% (JPY 9.0 billion).

Export Bill Insurance 0.3%
Export Credit Insurance
for SMEs and AFF Sector 0.3%
Comprehensive Export Insurancewith Simplified Procedure 0.2%

Overseas Investment Insurance
15.3%

Prepayment ImportInsurance 0.0%

Buyer’s Credit Insurance
21.4%

Overseas Untied
Loan Insurance
36.1%

About NEXI and
Organizational Operation

Export Credit Insurance
23.6%

Recoveries
Trends of Recoveries
The amount of recoveries increased by 0.2% year on year to approximately JPY 31.2 billion in FY2019. Recoveries of claims
associated with political risk events, including debt rescheduling, accounted for 89% (JPY 27.7 billion). The remaining 11% (JPY 3.5
billion) was associated with commercial risk events.

FY2019 Financial Results( FY )

40.7

2015

40.9
0.2

44.1
44.5

2016
24.7

0.3

6.6

31.3

2017
30.1 1.1

31.1

2018
27.7

3.5
31.2

2019

0

20

25

30

35

40

Political Risk Event

45(Billions of Yen)

Commercial Risk Event

Annual Report FY2019

13

NEXI Review of Performance

Performance Highlights
Claims Paid
Trends of Claims Paid
Claims paid increased by 70.3% year on year to approximately JPY 57.1 billion in FY2019, due to large claims paid for both
political risk event and commercial risk event.
( FY )

18.6

3.8

2015

22.4
1.0

6.8

2016

7.8
0.2

19.0
19.2

2017
6.9

26.6
33.5

2018
36.6

20.5
57.1

2019

0

10

20

30

40

60 (Billions of Yen)

50

Political Risk Event

Commercial Risk Event

Claims Paid by Region
The Middle East accounted for the largest share with 60.2% (approximately JPY 34.3 billion).
Overall

Political Risk Event

Oceania 0.6%

Central America 7.2%

Africa 0.2%
North America
0.1%
Europe 0.1%

Commercial Risk Event

Oceania 0.6%

CentralAmerica
11.1%

North America
0.1%
Asia 0.1%

Africa0.5%
Oceania
0.8%

Central America
0.3%
Europe 0.2%
North
America 0.2%

Middle East
10.2%

Asia
10.8%

Asia
29.9%

Middle East
60.2%
South America
20.8%

14

Annual Report FY2019

Middle East
88.2%

South America
57.8%

NEXI Review of Performance

Insured Events in FY2019 ( Based on the data as of May 15, 2020 )Occurrence of Events by Risk Type – Year-on-Year Change –The reported occurrence of risk events decreased to approximately JPY 67.3 billion from the previous year. This is due to a
decline in both political and commercial risk events, in particular because of a substantial decrease in commercial risk events
despite negative factors such as Asian and Middle East buyers’ delayed payments which were also seen last year.
Meanwhile, overall claims paid significantly increased to JPY 57.1 billion. This is due to a huge surge in political risk events
that was mainly caused by economic sanctions, although commercial risk events experienced a decrease in delayed payments.
( Millions of Yen )Occurrence ofEventsClaims Paid

FY2017FY2018NEXI Activities

Risk Type

Year-on-year Change (%)

FY2019

Political Risk

5,663

36,59730,371(17.0%)

Commercial Risk

56,092

71,14836,884(48.2%)

Total

61,755

107,745

67,255(37.6%)

Political Risk

214

6,923

36,578428.4%

Commercial Risk

19,02926,573

20,474(23.0%)

Total

19,24333,49757,052

70.3%＊The amount of occurrence of events does not match with that of claims paid, since there are some cases where debts are fully paid after the notice ofoccurrence of losses was submitted, resulting that claims are not made or they will be made in the next fiscal year.

Insurance Products

Occurrence of Events and Claims Paid ( FY2017-FY2019 )Political Risk Event( Millions of Yen )

5,663

2017

36,597
6,923
30,371

2019

36,57819,02971,1482018

26,57336,8842019

5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000

20,4740

10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000

Claims Paid

Occurrence of Events

About NEXI and
Organizational Operation0( Millions of Yen )56,092

2017

214

2018

Commercial Risk Event

Claims Paid

Occurrence of Events

Occurrence of Events by Region
Approximately 90% of political risk events occurred in Asia and the Middle East, and the remaining 10% occurred in North,Central and South Americas and Africa.

Occurrence of Events by Region ( FY2019 )

30,000( Millions of Yen )Commercial Risk Event( Millions of Yen )25,00027,14020,68625,00020,00020,00015,00011,27515,00010,00010,000
5,000

2,518
0

0

dle

Asia

FY2019 Financial Results

Political Risk Event

id
&M

t
Eas
th

Nor

3,934

5,000
394

rica
icas
ope
Eur l Amer h Ame
t
a
u
r
So
ent
&C

0

frica

ania

A

319

559

373
0

Oce

dle

Asia

id
&M

t
Eas
th

Nor

rica
icas
ope
Eur l Amer h Ame
t
a
u
r
So
ent
&C

frica

A

56

ania

Oce

Annual Report FY2019

15

NEXI Review of Performance

Review of Performance
Underwritten AmountUnderwritten Amount by Insurance TypeType of Insurance(Millions of Yen)FY2015FY2016FY2017FY2018FY2019

Export Credit Insurance

6,438,129

5,344,820

5,915,423

5,030,034

4,526,832

76.7(10.0)One year or less

3,304,188

2,745,229

3,093,390

2,908,306

2,810,763

47.6

(3.4)

More than one year

3,133,941

2,599,591

2,822,033

2,121,728

1,716,069

29.1(19.1)

Trade Insurance for Standing
Orders from Specific Buyers

5,463

5,308

8,115

7,443

10,9070.2

46.5

Export Credit Insurance for SMEs
and AFF Sector

9,290

9,640

8,449

9,812

13,6560.2

39.2

Comprehensive Export Insurancewith Simplified Procedure

40,956

47,106

51,96358,024

51,207

0.9(11.7)

Export Bill Insurance

13,25812,255

11,82313,023

12,358

0.2

(5.1)

454

98

981

214

2,844

0.0

1229.3

Overseas Investment Insurance

503,508

401,538

641,568

712,045

601,782

10.2(15.5)

Buyerʼs Credit Insurance

256,135

61,898138,372

37,083

197,823

3.4

433.5

Overseas Untied Loan Insurance

454,643366,722422,123

342,565

422,132

7.2

23.2

Reinsurance

93,42685,297

115,971

86,21962,313

1.1(27.7)

7,815,262

6,334,680

7,314,788

6,296,462

5,901,854

100.0

(6.3)

Prepayment Import Insurance

Total

Composition(%)

Year-on-Year
Change (%)(Note 1) The underwritten amount is based on the amount as determined at the policy issue date. The total amount is based on the actual underwritten amountcalculated by using the exchange rate on the conclusion date of the contract, not on the insured amount of policies for foreign currency risk. (The same
applies to the table below.)(Note 2) In accordance with the BU rules, Export Credit Insurance for capital goods is classified into transactions with more than one year. (The same applies
hereafter.)(Note 3) The floating interest coverage case is calculated based on the interest rate at the time of the conclusion of the contract. (The same applies to the tablebelow.)

Underwritten Amount by Region(Millions of Yen)

RegionFY2015FY2016FY2017FY2018FY2019Asia

4,103,595

3,711,316

3,878,278

3,517,050

3,422,851

54.5

(2.7)

Middle East

1,311,427

571,306

696,610

661,380

500,303

8.0(24.4)

Europe743,348578,369

699,293

638,012780,216

12.4

22.3

North America

383,047

250,236

303,599

274,361

245,916

3.9(10.4)

Central America

789,353

723,744703,342

647,942538,946

8.6(16.8)South America

377,503251,170

438,422442,875

345,257

5.5(22.0)

Africa317,625

373,657

590,893304,254355,564

5.7

16.9

Oceania

137,866

119,886

100,603

81,52772,864

1.2(10.6)

International organizations

293,575

177,508445,278

134,460

16,221

0.3(87.9)

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 (whenguaranteed, country or international organization of the guarantor).
(Note 2) Since the amount is recorded twice as the country of destination and as the country of payment, the total amount does not match with that of underwritten
amount by insurance type.
(Note 3) The amount is classified into 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.)

16

Annual Report FY2019

Outstanding Commitment by Insurance TypeType of Insurance(Millions of Yen)FY2015FY2016FY2017FY2018FY2019

Export Credit Insurance

7,988,439

7,446,773

7,538,669

6,994,430

5,968,467

47.4(14.7)One year or less

3,056,828

2,649,163

2,497,946

2,417,727

2,291,738

18.2

(5.2)

More than one year

4,931,611

4,797,610

5,040,723

4,576,703

3,676,729

29.2(19.7)

Trade Insurance for Standing
Orders from Specific Buyers

9,375

7,313

9,868

11,383

13,211

0.1

16.1

Export Credit Insurance for SMEs
and AFF Sector

3,161

3,028

2,817

3,817

4,491

0.0

17.6

Comprehensive Export Insurancewith Simplified Procedure

10,531

11,87913,003

16,415

10,8740.1(33.8)

Export Bill Insurance

2,851

3,283

3,556

3,224

3,831

0.0

18.8

301

0

979

208

2,298

0.0

1002.7

1,457,399

1,460,533

1,528,398

1,596,806

1,602,810

12.7

0.4

923,292922,836

866,474

923,657

831,832

6.6

(9.9)

3,348,179

3,439,069

3,549,807

3,608,086

3,365,701

26.7

(6.7)

740,210821,174

827,116

830,151

783,808

6.2

(5.6)

14,483,737

14,115,888

14,340,688

13,988,179

12,587,322

100.0(10.0)

Overseas Investment Insurance

Overseas Untied Loan Insurance
Reinsurance
Total

Year-on-Year
Change (%)

Insurance Products

Buyerʼs Credit Insurance

Composition(%)

NEXI Activities

Prepayment Import Insurance

NEXI Review of Performance

Outstanding Commitment (As of fiscal year end)

(Note 1) In principle, the foreign currency denominated insurance contract is calculated based on the exchange rate at the end of each fiscal year. (The same applies
to the table below.)(Note 2) The floating interest coverage case is calculated based on the interest rate at the end of each fiscal year. (The same applies to the table below.)

About NEXI and
Organizational Operation

Outstanding Commitment by Region(Millions of Yen)

RegionFY2015FY2016FY2017FY2018FY2019Asia

6,768,579

6,941,039

6,896,936

6,926,035

6,463,037

49.2

(6.7)

Middle East

2,413,796

2,198,618

2,050,197

1,945,372

1,673,822

12.7(14.0)

Europe1,368,305

1,105,592

1,070,642

930,638

885,666

6.7

(4.8)

North America

981,989

912,846

977,828

984,054886,348

6.7

(9.9)

Central America

687,931755,757

769,735

653,945444,834

3.4(32.0)South America

925,309

767,445695,229685,649

565,177

4.3(17.6)

Africa680,693751,177965,515

952,503911,884

6.9

(4.3)

Oceania

747,300

725,637

654,853624,052

520,348

4.0(16.6)

International organizations

243,752

282,677

1,084,413

868,089

787,432

6.0

(9.3)

Composition(%)

Year-on-Year
Change (%)

FY2019 Financial Results(Note 1) Classification used to compute the above amount: Pre-shipment: Country of the shipment consignee; Post-shipment: Country of the payer (whenguaranteed, country or international organization of the guarantor).
(Note 2) Since the amount is recorded twice as the country of destination and as the country of payment, the total amount does not match with that of underwritten
amount by insurance type.
(Note 3) The amount is classified into international organizations instead of regions when guaranteed by an international organization.

Annual Report FY201917

NEXI Review of Performance

Review of Performance
Premium Income
Premium Income by Insurance TypeType of Insurance

FY2015

Export Credit Insurance
One year or lessMore than one year
Trade Insurance for Standing
Orders from Specific Buyers
Export Credit Insurance for SMEs
and AFF Sector
Comprehensive Export Insurancewith Simplified Procedure
Export Bill Insurance
Prepayment Import Insurance
Overseas Investment Insurance
Buyerʼs Credit Insurance
Overseas Untied Loan Insurance
Reinsurance
Total(Millions of Yen)FY2016FY2017FY2018FY2019Composition (%) Year-on-Year Change (%)(17.5)
23.6
(7.7)
11.9
(25.5)
11.7

13,8585,081
8,777

14,8385,240
9,598

14,2136,600
7,613

12,032
5,441
6,591

9,932
5,022
4,909

194

166

340

259

433

1.0

67.1

83

85

72

84

125

0.3

49.4

99

105

116

127

102

0.2

(19.7)

131
3
5,802
13,03015,231
3,038
51,469

109
0
5,264
3,378
22,044526
46,516

120
3
6,102
6,326
26,2202,603
56,117

130
3
6,188
1,424
7,018
2,098
29,362

130
17
6,454
9,009
15,227697
42,127

0.3
0.0
15.3
21.4
36.1
1.7
100.0

0.0
562.1
4.3
532.5
117.0
(66.8)
43.5(Note) The premium income is recorded at the start of the insurer’s obligation period, unlike the underwritten amount based on the policy issue date. Therefore, thepremium income and underwritten amount may be recorded in different fiscal years.

Insurance Claims Paid
Claims Paid by Insurance Type and Risk
Type of Insurance(Millions of Yen)FY2015FY2016FY2017FY2018

Political Commercial
Risk
Risk

Political Commercial
Risk
Risk

Political Commercial
Risk
Risk

Political Commercial
Risk
Risk

Export Credit Insurance
21,926 18,571 3,355 3,499 1,000
Trade Insurance for Standing Orders
221
0
221
0
0
from Specific Buyers
Export Credit Insurance for SMEs
2
0
2
136
0
and AFF Sector
Comprehensive Export Insurance
0
0
0
13
0
with Simplified Procedure
Export Bill Insurance
0
0
0
31
0
Prepayment Import Insurance
0
0
0
0
0
Overseas Investment Insurance
0
0
0
0
0
Buyerʼs Credit Insurance
0
0
0
114
0
Overseas Untied Loan Insurance00
0 1,047
0
Reinsurance
245
0
245 2,943
0
Total
22,395 18,571 3,824 7,782 1,000

2,499 4,205

FY2019
Political Commercial Composition Year-on-Year
(%)
Risk
Risk
Change (%)

114 4,091 18,082 2,175 15,907 43,996 36,344 7,652

Asia
Middle East
EuropeNorth America
Central America
South America
AfricaOceania
Total

18

Annual Report FY2019

143.3

0

13

0

13

0

0

0

0

0

0

0.0

−

136

193

0

193

78

0

78

150

0

150

0.3

91.8

13

3

0

3

0

0

0

6

0

6

0.0

−

0
0
10
0
10
35
0
35
0
0
0
0
0
0
0
0
100
0 2,941 2,941
0
234
234
0
0
0 1,807 1,807
0
117
0
117
0 13,839 9,253
0 9,253 11,760
0 11,7600891 1,325
0 1,325755
0755
214 19,029 33,497 6,923 26,573 57,052 36,578 20,474

0.1
0.0
0.4
0.2
20.6
1.3
100.0

240.6
−
(92.0)(93.5)
27.1(43.0)
70.3

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

Claims Paid by Region
Region77.1(Millions of Yen)FY2015FY2016FY2017FY2018

Political Commercial
Risk
Risk

Political Commercial
Risk
Risk

Political Commercial
Risk
Risk

Political Commercial
Risk
Risk

1,059
0 1,059 3,662
0 3,662 4,385
1,472
0 1,472
872
29
843
287
24
20
4
245
0
245
542
0
0
0
503
0
503
25
980
0
980
0
0
0
0
18,584 18,551
33 1,384
320 1,064 13,940
276
0
276
884
652
233
65
0
0
0
232
0
232
0
22,395 18,571 3,824 7,782 1,000 6,782 19,243

112 4,273 12,477
2
286 5,6460542 1,115
0
25
187
0
0
40
100 13,840 11,090
0
65 2,941000
214 19,029 33,497

FY2019
Political Commercial Composition Year-on-Year
(%)
Risk
Risk
Change (%)

0 12,477 6,154
32 6,121
2,103 3,543 34,348 32,259 2,090
1 1,114
43
0
43
71
116
75
32
43
0
40 4,114 4,053
61
1,807 9,283 11,841
0 11,841
2,941
0
106
0
106
0
0
371
202
169
6,923 26,573 57,052 36,578 20,474(50.7)
10.8
60.2
508.3
(96.1)
0.1(59.8)
0.1
7.2 10,137.8
20.8
6.8(96.4)
0.2
0.6
−
100.0
70.3

Recoveries by Risk
Type of Risk

(Millions of Yen)FY2015

Political Risk

FY2016FY2017FY2018FY2019Composition (%) Year-on-Year Change (%)

40,66744,141

24,69630,06827,730

88.9

(7.8)

201

327

6,575

1,052

3,467

11.1

229.4

40,86744,46831,271

31,121

31,197100.0

0.2

Commercial Risk
Total

(Millions of Yen)FY2015FY2016FY2017FY2018FY2019Composition (%) Year-on-Year Change (%)

Asia

9,039

5,895

1,995

2,368

3,628

11.6

53.2

Middle East

11,528

11,953

17,374

11,461

11,930

38.2

4.1

572

594

713

683

771

2.5

12.8

1

4

6

81

33

0.1

(59.4)

EuropeNorth America

1,519

1,534

1,472

1,701

38

0.1

(97.7)South America

10,771

20,337

9,024

14,193

14,21145.6

0.1

Africa

7,437

4,152

657

629

586

1.9

(6.8)

0

0

29

4

0

0.0

(100.0)40,86744,46831,271

31,121

31,197

100.0

0.2

Total

Insurance Products

Central America

Oceania

NEXI Activities

Recoveries by Region
RegionNEXI Review of Performance

Recoveries

Recoveries in FY2019
About NEXI and
Organizational Operation

Recoveries by Risk TypeThe total recovery amount in FY2019 slightly increased by 0.2% year-on-year to approximately JPY 31.2 billion from JPY 31.1 billion.
Looking at the results by risk type, the recovery amount related to political risk events, including those involving Paris Clubdebt rescheduling, declined by 7.8% to JPY 27.7 billion. Meanwhile, that of commercial risk events surged by 229.4% to JPY
3.5 billion.

FY2019 Financial Results

Recoveries by Region
South America accounted for the largest portion of total recoveries with 45.6% at JPY 14.2 billion. The amount includes JPY
13.8 billion in the Argentine Republic (primarily Paris Club recoveries) and JPY 0.3 billion in the Republic of Chile (commercial
risk-related recoveries).
The Middle East came second with 38.2% at JPY 11.9 billion, including JPY 9.2 billion in the Republic of Iraq and JPY 1.6
billion in the Kingdom of Saudi Arabia (commercial risk-related recoveries).
Asia ranked third with 11.6% at JPY 3.6 billion, including JPY 2.1 billion in the Republic of Indonesia and JPY 1.2 billion in the
People’s Republic of China (commercial risk-related recoveries).
The remaining recoveries are as follows: Europe with JPY 0.8 billion (including JPY 0.6 billion in the Republic of Serbia and
JPY 0.1 billion in Bosnia and Herzegovina), Africa with JPY 0.6 billion (including JPY 0.5 billion in the Arab Republic of Egypt),
and North and Central Americas with JPY 0.1 billion (including JPY 0.02 billion in the Republic of Cuba).

Annual Report FY201919

TOPICS

What made you consider the use of trade and investment insurance?

Case

Case

1

2

I am thinking ofI am thinking of making

launching business

new investment and/orwith new buyers.

obtaining financing.

Case

Case

3

4

The amount of export

I am thinking of exportingtransactions with existingproducts with a longcustomers is increasing.

pre-shipment period and/or
difficulty in resale.

Case

Case

5

6

The payment method has

I would like to hedge risk inchanged from payment up front

transactions related to specificto post-shipment remittance.

countries with country risks.

Trade and investment insurance is useful when you are faced with new business conditions.

20

Annual Report FY2019

NEXI Activities
Main Activities

22

International Cooperation

30

Projects Covered by NEXI Insurance

32

SME Exports Covered by NEXI Insurance

38

NEXI Activities

Main Activities
Support for Strategic Priority Sectors
Promoting Overseas Infrastructure Projects
Based on its “Infrastructure System Export Strategy”( approved at the Ministerial Meeting on Strategy relating
Infrastructure Export and Economic Cooperation ) and“Partnership for Quality Infrastructure”, the Japanese
government aims to contribute to international society
by increasing overseas orders for Japanese companies’
infrastructure systems and supporting exports of their quality
systems.
In FY 2019, NEXI provided Overseas Investment Insurance
to support Thilawa Area Port Terminal Operation Project in
the Republic of the Union of Myanmar, and while for Standard
Gauge Railway Project in the United Republic of Tanzania, forwhich Japanese railroad rail will be delivered, has decided tooffer reinsurance.
In June 2019, a memorandum of understanding ( MOU )was concluded between NEXI and 13 private financial
institutions to concretize cooperation on the utilization of

infrastructure funds and project bonds. The MOU intends tobuild a framework between NEXI and financial institutions towork together in laying the groundwork for structuring theutilization of infrastructure funds and project bonds, basedon the recognition of the need for attracting funding not only
from conventional investors such as commercial banks, butalso from new financial actors, including institutional investors,
amid growing demands for infrastructure projects under everchanging financing environment, while smooth financial flows
are needed.
Also, today the world community needs to respond to
global environmental issues and various social problems, as
exemplified by the Sustainable Development Goals (SDGs)
adopted by all United Nations Member States in 2015. We will
work to achieve those goals through our various supports forJapanese companies’ infrastructure development overseas.

Business Initiatives in Natural Resources and Energy Fields
Securing a stable supply of energy and mineral resources isa key policy challenge for Japan. Regarding liquefied naturalgas ( LNG ) projects, we therefore handles our insurance
business in accordance with the policies set by the Agency
for Natural Resources and Energy of the Ministry of Economy,
Trade and Industry. We are working to provide greater support
to the realization of LNG projects by extending the scope of
relevant insurance policy; Investment and Loan Insurance
for Natural Resources and Energy, and presented this new
initiative at the LNG Producer-Consumer Conference held in
September 2019. In the same year, we provided investment
insurance for Arctic LNG 2 Project in the Russian Federation,
which will contribute to establishing a LNG value chain in Asia
because natural gas produced will be delivered mainly to Asia
and Europe via the Northern Sea Route.

In addition, based on the recognition of the importanceof stable supply of affordable energy amid growing energy
demand in the world centering on Asia, we have offeredinsurance for Natural Gas-Fired Power Project in Myanmar andGas-fired Combined-cycle Power Plant Project in the United
Arab Emirates. These projects can be considered as proactive
initiatives that are in line with the SDG 7:“Ensure access toaffordable, reliable, sustainable and modern energy for all.”At the same time, we positively supports renewable energy
projects contributing to decarbonize energy systems byoffering insurance for Offshore Wind Power Project in Taiwan.
NEXI will continue to extend support for the energy andnatural resources fields, while meeting the needs of the project
country.

Launch of Loan Insurance for Green Innovation
In July 2019, to further promote financing for businessprojects relating to environmental preservation and climatechange measures, NEXI newly launched ”Loan Insurance
for Green Innovation,” offering an increased commercial risk
coverage rate of 97.5%, a higher rate than that of existing loan
insurance.
Specifically, this insurance is applicable to renewable energy
and energy efficiency projects, as well as projects utilizing
new technologies that contribute to global environmental
preservation, in which Japanese companies ( exporter orinvestor) and banks are involved in while actively disclosing

22

Annual Report FY2019

information on environmental preservation and climate change.
In May 2019, assenting to the recommendations of the Task
Force on Climate-related Financial Disclosures (TCFD), which
was established by the Financial Stability Board (FSB), NEXI
has joined the TCFD consortium, a discussion platform set
up for promoting better climate-related ﬁnancial disclosures.
As a public institution, we will enhance continuous support
to private-sector efforts and initiatives in environmental
preservation and climate change measures ( including theabove-mentioned active disclosure of information).

NEXI Review of Performance

Promoting Business Collaboration in Third Countries
Conclusion of Reinsurance Agreement and MOU with EXIM Thailand
increasing. This new reinsurance agreement is expected tocontribute to encourage Thailand-based Japanese companies’
exports to third countries, and investments and financing
for collaborative projects launched by both countries, while
supporting the economic development of relevant countries.

NEXI Activities
Insurance Products

In July 2019, NEXI signed a reinsurance agreement with the
Export-Import Bank of Thailand (EXIM Thailand), the export
credit agency of the Kingdom of Thailand. Following thereinsurance agreement completed between the two parties
in 2009, to share risk on short-term insurance (for a period ofless than two years), this new agreement is about mediumand long-term insurance (for a period of two or more years),
this agreement supports overseas projects jointly conductedby Japanese and Thai companies, and makes it possible for
NEXI to provide reinsurance to EXIM Thailand for a portion of
investments and loans extended by Japanese companies.
Also, in February 2020, a memorandum of understanding(MOU) was concluded between the pair to enhance mutual
cooperation for further promoting the use of the reinsurance
scheme developed for Japanese and Thai companies. The
two entities provided a joint seminar to introduce the contentsof the scheme.
In recent years, along with the ongoing economic
development of Thailand, export volume of Japanesecompanies based in Thailand, and investments made by Thaicompanies in other countries centering on Asia have been

( Signing ceremony )Conclusion of Reinsurance Agreement with EKF
that contribute to environmental preservation. The cooperation
with EKF who has expertise in the field is consistent with thecurrent global trend toward creating a sustainable society byfocusing on both the environmental protection and economic
growth. Moreover, as EKF is strengthening its finance function
for mid- and long-term projects in Africa, greater cooperation
between the two entities for projects encompassing Japanese
corporate participants including their subsidiaries can be
expected.
By actively utilizing One-Stop-Shop reinsurance scheme
formalized under the agreement, we will provide support
in terms of export credit to enhance industrial cooperation
between Japan and Denmark.

About NEXI and
Organizational Operation

In August 2019, NEXI completed a one-stop-shop
reinsurance agreement with Eksport Kredit Fonden ( EKF ) ,Denmark’s export credit agency.
This reinsurance agreement is to promote mutual
cooperation between the pair in relation to reinsurance
underwriting/ceding for mid- and long-term projects. Under
the agreement, NEXI and EKF will cooperate in terms ofreinsurance, to provide more comprehensive support toboth Japanese and Danish corporations for their exporttransactions.
EFK has been engaged in financing for many wind power
projects, while NEXI is strengthening support for renewableenergy projects as well as those introducing new technologies

FY2019 Financial Results

Conclusion of MOU with SUEK, Russian Coal Producer
In June 2019, NEXI and the Joint Stock Company Siberian
Coal Energy Company (SUEK), the largest coal producer andexporter in the Russian Federation, signed an MOU.
This MOU aims to create a general framework forexchanging information, which allows both parties tomutually benefit from each other’s know-how and expertise

accumulated through years of experience, and to identify
potential business projects to be implemented together withJapanese companies, as a way of effectively promoting
business opportunities between SUEK and Japanesecompanies. It is also expected to strengthen Japan–Russia
relations.

Annual Report FY201923

NEXI Activities

Main Activities
Conclusion of MOU with Credendo and Reinsurance Agreement with
Credendo-Ingosstrakh Credit Insurance
In October 2019, NEXI and Credendo, the export credit
agency of Belgium, concluded an MOU to establish aframework for mutual cooperation in the field of trade,investments and loans, in order to effectively support projects
implemented by both Japanese and Belgian corporations in
the two countries or third countries.
In November 2019, NEXI also completed a reinsurance
agreement with Credendo-Ingosstrakh Credit Insurance, LLC, acredit insurance company, in which Credendo has a 67% stake,and Ingosstrakh, one of the major Russian non-life insurers,
has a 33% stake. The agreement supports reinsurance
underwriting by NEXI for Japanese companies’ transactions in
Russia, for which Credendo-Ingosstrakh Credit Insurance has
provided trade credit insurance. The agreement is expected toreduce risks associated with business transactions conductedby Japanese companies based in Russia.

( Signing ceremony )Enhanced Cooperation with US EXIMBANK through Reinsurance Underwriting
In November 2019, NEXI entered into a reinsurance
agreement with the Export-Import Bank of the United States( US EXIMBANK ) , the export credit agency of the UnitedStates, in order to enlarge the scope of mutual cooperationin reinsurance underwriting. The signing ceremony was heldin Bangkok in the presence of U.S. Secretary of Commerce
Wilbur Ross, Chargé d’Affaires ad interim at the U.S. Embassy
Joseph M. Young, U.S. Under Secretary of State Keith Krach,and Special Adviser to the Ministry of Economy, Trade andIndustry Tatsuya Terazawa.
Although NEXI and US EXIMBANK concluded a reinsurance
agreement in 2004, it was limited to reinsurance underwritingfrom NEXI side for US EXIMBANNK. The revised agreement
makes it possible for US EXIMBANK to provide reinsurance
to NEXI, and to allow the both parties to offer morecomprehensive support for export transactions conductedby both Japanese and U.S. companies. The new reinsurance

agreement is expected to create a closer relationship between
the two countries.

( Signing ceremony )Conclusion of MOU with MEHIBIn December 2019, NEXI signed a MOU with the Hungarian
Export Credit Insurance Private Limited Company (MEHIB), theexport credit agency in Hungary. It was signed by Hungarian
Minister of Foreign Affairs and Trade Peter Szijjarto and NEXICEO Atsuo Kuroda at the signing ceremony held at the Prime
Minister’s official residence on December 6, in the presenceof Japanese Prime Minister Shinzo Abe and Hungarian Prime
Minister Viktor Orban.
This MOU aims to create a framework for NEXI -MEHIB
cooperation for promoting economic and trade partnership
between both countries, through various efforts including
information exchange on politics, economy, and financial
market information of both countries and neighboring
countries.

24

Annual Report FY2019( Signing ceremony )NEXI Review of PerformanceStrengthening Support for Africa
Conclusion of MOU with IsBD, ICIEC, and ATI
with IsBD, ICIEC, and ATI, who can provide financial support for
deposits for project funding, which should be arranged by thegovernment of the project country.
Also, NEXI and the three institutions have agreed to establish
consulting counters called “Japan Desk” for Japanese
corporate clients, with designated staff trained by NEXI in tradeand investment insurance systems.
We will continue to actively promote Japan’s exports andinvestments to Africa, and to support Japanese companies’
overseas business expansion by enhancing cooperation withinternational financial institutions and governmental financialorganizations in other countries and regions.

NEXI Activities
Insurance Products

In conjunction with the 7th Tokyo International Conferenceon African Development (TICAD7) held in August 2019, NEXI
concluded an MOU with three financial institutions respectively,
including the Islamic Development Bank ( IsBD ) , Islamic
Corporation for the Insurance of Investment and Export Credit(ICIEC), and the African Trade Insurance Agency (ATI). The
signing ceremony was held on August 27 at the Ministry of
Economy, Trade and Industry with the presence of the Ministerof Economy, Trade and Industry Hiroshige Seko.
These MOUs aim to enhance partnership between NEXI
and IsBD, ICIEC, and ATI, which possess a wealth of support
experience and achievements in business operation in
Africa, and a powerful network with the African governments
and government agencies, in order to build a cooperative
system facilitating further Japanese companies’ trades andinvestments into Africa.
Africa has huge demand for infrastructure, and there is agreat potential for Japanese companies to participate in future
projects. However, expanding business in to Africa is a difficult
hurdle for many Japanese companies compared to Asia. In suchcircumstances, and in light of the request from private companies
for strengthening insurance function through cooperation withinternational financial institutions, made at the TICAD7 PublicPrivate Roundtable Meeting in March 2019, NEXI has decided tocreate a business environment facilitating Japanese companies’
financing project development by cultivating close partnerships( Signing ceremony )About NEXI and
Organizational Operation

Holding TICAD7 Side Event

FY2019 Financial Results

NEXI held a side event at TICAD7, under the theme of “Using
trade and investment insurance to expand business into Africa– new efforts by NEXI and international financial organizations
for risk reduction.”
At the side event, representatives of IsBD, ICIEC, ATI,
and NEXI appeared on a stage and gave a presentation
about future business opportunities, points to remember forbusiness in Africa, ideas how international financial institutions
can be utilized, and potentials for cooperation with NEXI, tocompanies willing to conduct export transaction to Africa
or operate business in Africa. Representatives of eachorganization provided a brief overview of their organizationand its functions, and expressed their expectations regarding
the MOU. At the end of the event, many question were
exchanged between attendees, showing their strong interestin the initiatives implemented under the MOU. The event
attracted the participation of nearly 200 people, from various
corporations and organizations.

( Side event )Annual Report FY201925

NEXI Activities

Main Activities
Holding Africa Workshop
In February 2020, we invited staff of three organizations
with which NEXI has concluded MOUs, as well as thoseof development organizations and export credit agencies
in Africa, to a workshop held at NEXI. The objective of thisworkshop was to promote deeper mutual understandingof each organization’s products, systems, and businesspractices. We exchanged opinions regarding case studies
introduced by each organization.
Also, NEXI held sessions providing business information andindividual meetings with the visiting organizations for Japanesecompanies, in order to help building relationship between them.

( Workshop )Strengthening Partnerships with Overseas Organizations
Participation in Berne Union Meetings
The Berne Union, also known as the International Union ofCredit and Investment Insurers, is an international association
for the global export credit and investment industry. The
members include government-backed official export credit
agencies, multilateral financial institutions, and private credit
insurers from across the globe. They discussed shared issues
related to export credit insurance and investment insurance,from their respective standpoints as experts. Since the ﬁrst

meeting held in 1934 in Berne, Swiss Confederation, its
membership has grown to a total of 84 as of April 2019.
In 2019, The Berne Union organized the spring meetingin April in the Republic of Singapore, and the fall meeting in
October in Hyderabad, India. NEXI attended both meetingsand exchanged opinions with other members on various topics
including export credits.

Hosting RCG CEO Meeting
In January 2020, NEXI hosted the annual CEO meeting ofRegional Cooperation Group (RCG) consisting of export credit
agencies (ECAs) in Asia and the Pacific region, in Tokyo.
The meeting was held under the theme of “cooperation
among ECAs in third countries,” and participants confirmed
mutual role and cooperation in tapping into new markets such
as Africa. In addition, the participating agencies reaffirmedthat the parties will work together to achieve the United
Nations’ Sustainable Development Goal 7: “Ensure access toaffordable, reliable, sustainable and modern energy for all”,
amid the accelerating shift of the global economy’s center
toward Asia.
As outcome of this meeting, a joint statement on the abovementioned topics has been adopted.

26

Annual Report FY2019( RCG meeting )NEXI held bilateral meetings with ECAs and government
officials from People's Republic of China, Federal Republicof Germany, French Republic, and Republic of Austria, toexchange honest opinions on a wide range of topics including
the global financial situation, each country’s challenges and

NEXI Review of Performance

Bilateral Meetings
efforts being made. Through this type of discussions held
once a year, we are enhancing a collaborative relationship withrelated organizations, while confirming trends of trade andinvestment insurance in relevant countries.

NEXI Activities

Support for Global Operation of Japanese SMEs
NEXI’s Business Support System Enhanced for SMEs

3,500
3,364

Amount of Policies

136.6

92.9

96.4

110
2,400
1,933

100

98.1

90

1,758

80

84.5

60
50

1,007

900

1,000

40
666

0

70

433
285
0

5.6

2011

26.4
12.7
96
17
2.4
0.6
2012
2013

686
43.1

67.3

418

188

243

4.8

8.7

2014

2015

29.9

30

About NEXI and
Organizational Operation

1,500

500

1,599

1,486

Amount of Policies ( JPY 100 million )Number of Policies Sold through Introduction
by NEXI Business Partners

2,000

130
120

Number of Policies Sold
2,500

150
140

Amount of Policies Sold through Introduction
by NEXI Business partners

3,000

Insurance Products

each year, marking around 40 % increase in FY2019, in both
“number of policies sold” and “amount of policies,” from theprevious year, which resulted in over 3,000 policies at theamount exceeding JPY 13.0 billion.
We will continue to actively support Japanese SMEs in theirglobal operation while fully utilizing the network, and offer
better insurance products and services to provide even greater
help for them.

Number of Policies Sold

Since its launch made with 11 regional banks in 2011 to
widely publicize the use of export credit insurance, NEXI’s
support network for Japanese SMEs overseas businessdevelopment has grown to include 111 members from all
47 prefectures including regional banks, shinkin banks, andorganizations in the agriculture, forestry, and ﬁsheries (AFF)
industries. Through our partnership with these business tie-up
partners, we have provided support for Japanese SMEs andcompanies engaged in AFF sector in their creating safe, worryfree environment in overseas business expansion.
In January 2020, NEXI made a major revision to theoutsourcing agreement signed with the partners, in order torelax the existing requirements on premium discount applicablefor the insurance subscribers with Export Credit Insurance
for SMEs and AFF Sector, who have been introduced to us
by partner banks or organizations, and clarify the business
scheme rules in NEXI insurance introduction to potential
clients. Thanks to the network, the number of our clients is
steadily increasing through detailed consultation services
at customer sites, accompanying with specialist staff frombusiness tie-up partners.
With such efforts, the number of Export Credit Insurance
policies sold for SMEs and AFF Sector continues to rise

20

44.5

10

16.1

0
2016

2017

2018

2019 (FY)( Sales of Export Credit Insurance for SMEs and AFF Sector by Year )FY2019 Financial Results

Annual Report FY201927

NEXI Activities

Main Activities
Reinsurance Agreements Signed with Japanese Insurers to Share Risk on Overseas
Investment Insurance
We have concluded a reinsurance agreement with Tokio
Marine & Nichido Fire Insurance Co., Ltd., (Tokio Marine &Nichido), and Mitsui Sumitomo Insurance Co., Ltd. (Mitsui
Sumitomo Insurance) respectively, to share risk on overseas
investment insurance.
Previously, cooperation between private non-life insurancecompanies and us had been limited to reinsurance
underwriting by NEXI for trade credit insurance provided bysuch insurers to cover exports by Japanese companies.
However, the Cabinet Ordinance for Partial Revision of theTrade Insurance Law came into effect in July 2019, aiming toextensively supporting the overseas expansion of JapaneseSMEs. This has allowed private non-life insurance companies

to sell overseas investment insurance by themselves with thesupport of NEXI reinsurance. Based on the above-mentioned
agreements, Tokio Marine & Nichido started selling overseas
investment insurance in August 2019, and Mitsui Sumitomo
Insurance in February 2020 through various sales channels
including its agents.
As a result, these insurers that are familiar to JapaneseSMEs, have become more accessible for SMEs to seek someadvice on country risk of export destinations.
We were also involved in trade and investment insurance
seminars held by Tokio Marine & Nichido for its sales
promotion, as the reinsurance underwriter holding lectures forthe seminars, and the sole export credit agency in Japan.

Promoting Trade and Investment Insurance
NEXI works to spread knowledge and use of trade andinvestment insurance, primarily through partnerships withcentral government ministries and agencies and government
affiliated organizations that support SMEs’ overseas businessexpansion.
Through the “Consortium for New Export Nation,” which
JETRO sponsors, NEXI, as a support organization, not only
provides information on trade and investment insurance as amethod to hedge risks related to exports and investments, one
type of support for SMEs’ overseas business expansion that
the Japanese government promotes, but also gives lecturesand exhibit booths at seminars and events held by support
organizations, such as the Japan International Cooperation
Agency (JICA), Organization for Small & Medium Enterprises
and Regional Innovation Japan (SME Support, JAPAN), andJapan Finance Corporation (JFC).
In FY2019, more aggressive efforts were made to spreadthe use of trade and investment insurance, which included
support organizations sending letters to and individually visiting
introduced companies.

28

Annual Report FY2019

As for tools to educate people about trade and investment
insurance, NEXI also creates and updates product explanatory
pamphlets for SMEs when necessary, and updates its website,making it possible to provide information more easily. In thisand other ways, efforts continue to be made to educate people
about and get them to use trade and investment insurance.

( Trade and investment insurance seminar )NEXI Review of Performance

In Pursuit of Sustainable Society
Guidelines on Environmental and Social Considerations
Also, to ensure compliance with the guidelines, NEXI has
introduced Objection Procedures and assigned an examiner,
who is independent from NEXI insurance underwriting
department. We will continue to implement appropriate
assessments over projects.

NEXI Activities( Site Visit )FY2019 Screening by Category

FY2019 Screening by Region

Category A
15.2%

Category C
71.7%

Insurance Products

In order to carry out its corporate social responsibilities
regarding environmental and social issues, NEXI conducts
investigations to confirm whether environmental and social
considerations have been appropriately taken by projectcompanies for the projects with NEXI insurance coverage, in
accordance with the “Guidelines on Environmental and Social
Considerations in Trade Insurance” and the “Guidelines for
Information Disclosure Considerations for Nuclear Sector
Projects in Trade Insurance.”
In FY2019, NEXI implemented 46 project screenings. In thescreenings, projects were classified into three categories ( A,B, or C, in the order starting with the largest environmental
impact ) based on the results of the screening forms submitted
by applicants for NEXI insurance, and NEXI conducted
appropriate assessments based on the results of theclassification. For example, a site visit was conducted for eachproject classified in the category A, which accounted for about
15% of all projects in FY2019.

Category B
13.1%

Middle East 4.3%
Africa8.7%

Oceania 2.2%

Central &South America
8.7%

Asia
52.2%
About NEXI and
Organizational Operation

Europe/NIS
23.9%＊ Categorized in the order starting with the largest
environmental impact＊ Turkey is included in Middle East. Russia andCentral Asia are included in Europe/NIS. Mexico is
included in Central & South America.

Investing in SDGs Bonds
SDGs Bonds Invested in FY2019
Bond Name

Type

Japan Railway Construction, Transport andTechnology Agency bonds

Sustainability bond

JICA bonds

Social bondJapan Housing Finance Agency bonds

Green bondEast Nippon Expressway Company bonds

Social bondNational Institution for Academic Degrees andQuality Enhancement of Higher Education bonds

Social bond

Annual Report FY2019

FY2019 Financial Results

In FY 2019, NEXI invested in SDGs bonds including green,social, and sustainability bonds issued by the five entities listed
in the following table.
“Green bonds” are designated bonds intended to encourage
green projects, those contributing to solve environmental
problems, such as global warming.
“Social bonds” are a form of bond that allow investors to
help raise funds for projects with positive social outcomes(social projects).
“Sustainability bonds” are bonds where the proceeds will be
exclusively applied to finance for both Green and Social Projects.
Funds raised by these bonds contribute to achieving theUnited Nation’s Sustainable Development Goals (SDGs), bybeing used for related projects.
NEXI will continue to fulfill its social mission throughinvestments in SDGs Bonds, in order to contribute to theachievement of SDGs and realization of a sustainable society.

29

NEXI Activities

International Cooperation
In order to quickly and precisely respond to the diverse businessneeds of globalizing Japanese companies, NEXI has establishedinternational cooperative networks with related institutions abroad.

EuropeOne-Stop-Shop Reinsurance Agreements
Italy( 1 ) One-Stop-Shop Reinsurance Agreements

Netherlands
Belgium
Germany

In cases where a Japanese company jointly participates in a projectin a third country with foreign companies, NEXI concludes one-stopshop reinsurance agreements with major overseas export credit
agencies (ECAs) for the purpose of underwriting risks for the portion
exported from Japan. For example, when a Japanese company forms
a consortium with foreign companies for export to a third country, theforeign companies can conclude insurance contracts with their own
countries’ ECAs for the total amount of the export contract including
the portion exported by the Japanese company. Then NEXI provides
reinsurance to the foreign ECAs for the portion exported by theJapanese company.

Austria
Finland
Spain
Switzerland
FranceCzech Republic
UK
Denmark

Servizi Assicurativi Del Commercio Estero (SACE)
Atradius N.V. (ATRADIUS)
Credendo – Export Credit Agency
Euler Hermes Deutschland AG (EULER-HERMES)

2002
2002
2002
2003

Oesterreichische Kontrollbank Aktiengesellschaft (OeKB)
Finnvera Plc. (FINNVERA)

2003

Compañía Española de Seguros de Crédito a la Exportación (CESCE)
Swiss Export Risk Insurance (SERV)

2005

Banque Publique d’Investissement (BPifrance)
Export Guarantee and Insurance Corporation (EGAP)

2016

UK Export Finance (UKEF)
Eksport Kredit Fonden (EKF)

2017

2004
2007
2017
2019

Short-term Reinsurance Agreements
RussiaRussian Agency for Export Credit and Investment Insurance (EXIAR)

2016

Cooperative Agreements

To provide reinsurance
for the portion of exportby a Japanese company

France

DREE

1995
2016

UK

Banque Publique d’Investissement (BPifrance)
UK Export Finance (UKEF)

ExportJapanese
Company

1995

Consortium Contract
Export Contract

Foreign
ECA

To provide export
credit insurance
for the entire
export contract

Third
Country
Buyer

ForeignCompany
Export( 2 ) Short-term Reinsurance Agreements
NEXI has concluded reinsurance agreements with ECAs in Asiaand other regions in order to support exports to third countries byJapanese companies located in Asian and other countries. These
agreements increase the underwriting capacity of ECAs in Asia andother regions, and therefore make it easier to mitigate international
trade risks of Japanese-afﬁliated companies in the regions by making
use of the trade and investment insurance offered by local ECAs.

Reinsurance Contract

Foreign
ECA

AfricaCooperative Agreements

Export Credit Insurance

JapaneseaffiliatedCompanySouth Africa

Export Credit Insurance Corporation (ECIC SA)

2005

Buyer
Export, etc.

Middle East
Cooperative Agreements
Israel( 3 ) Reinsurance Agreements with Europeanand U.S. Private-sector Insurers
In response to the economic crisis in Europe and other issues, NEXI
started to provide underwriting capacity through short-term reinsurance
agreements with European and the U.S. private-sector insurers.

( 4 ) Other Cooperative Relations
NEXI has built long-term relationships with major ECAs that belong
to the Berne Union, and international organizations through cooperative
agreements.

30

Annual Report FY2019

Abu Dhabi

Israel Export Insurance Corp. Ltd. (ASHRA)
Mubadala Development Company PJSC (MDC)

1997
2008

Iraq

Ministry of Finance of Iraq /Trade Bank of Iraq (TBI)

IranMinistry of Economic Affairs and Finance of the Islamic Republic of Iran 2016
Export Credit Bank of Turkey (TURK EXIMBANK)
2017

Turkey2011

Germany

Euler Hermes Deutschland AG (EULER-HERMES) /C&L
KfW Bankengruppe (KfW)

One-Stop-Shop Reinsurance Agreements
1996

U.S.
CanadaExport-Import Bank of the United States (US EXIMBANK)
Export Development Canada (EDC)

2004

2011

Oesterreichische Kontrollbank Aktiengesellschaft (OeKB)
Servizi Assicurativi Del Commercio Estero (SACE)

1996

U.S.

Export-Import Bank of the United States (US EXIMBANK)

2019

FinlandFinnvera Plc. (FINNVERA)

1996

Short-term Reinsurance Agreements

Netherlands

Atradius N.V. (ATRADIUS)

1996

CanadaSpain

Compañía Española de Seguros de Crédito a la Exportación (CESCE)
2000
Uzbekinvest National Export Import Insurance Company (UZBEKINVEST) 2007

Cooperative Agreements

The State Export-Import Bank of Ukraine (UKREXIMBANK)Bank for Development and Foreign Economic Affairs (VEB)

2009

RussiaCanadaBelarusBelarusbank

2009

Russia2013

Turkmenistan

Russian Agency for Export Credit and Investment Insurance (EXIAR)The State Bank of Foreign Economic Affairs of Turkmenistan (TFEB)

Czech Republic

Export Guarantee and Insurance Corporation (EGAP)2015

Kazakhstan

KazakhExport

2016

Georgia

Ministry of Economy and Sustainable Development of Georgia

2019

RussiaJoint Stock Company Siberian Coal Energy Company

2019

Belgium

Credendo

2019

Hungary

Hungarian Export Credit Insurance Plc. (MEHIB)

2019

Austria
Italy

Uzbekistan
UkraineNEXI Review of Performance

North America

2018

1996

2009

U.S.
U.S.

Export Development Canada (EDC)

2012

Export-Import Bank of the United States (US EXIMBANK)
Export Development Canada (EDC)1991

The United States Department of Energy (DOE)
Overseas Private Investment Corporation (OPIC)

2009

1997
2017

NEXI Activities

2015

South America
Cooperative Agreements
BrazilCompanhia Valedo Rio Doce (VALE)

2008

Petroleo Brasileiro S.A. (PETROBRAS)

2008

Banco Nacional de Desenvolvimento Economico e Social (BNDES)
Brazilian Guarantees and Fund Managements Agency (ABGF)

2009
2017

Insurance Products

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

Asia / Oceania
One-Stop-Shop Reinsurance Agreements

Cooperative Agreements

Australia

Export Finance Australia (ECA)

2005

Korea

Korea

Korea Trade Insurance Corporation (KSURE)
Export-Import Bank of Thailand (EXIM THAILAND)

2011

Singapore

2019

TaiwanThailand

Short-term Reinsurance Agreements
ECICS Limited (ECICS)

2004

Malaysia

Export-Import Bank of Malaysia Berhad (MEXIM)

2006

Indonesia

Asuransi Ekspor Indonesia (ASEI)
Export-Import Bank of Thailand (THAI EXIMBANK)

2009ThailandTaiwanTaipei Export-Import Bank of China (TEBC)

2010

Hong Kong

Hong Kong Export Credit Insurance Corporation (HKECIC)

2012

2009

1994
2005

Indonesia

Taipei Export-Import Bank of China (TEBC)
Asuransi Ekspor Indonesia (ASEI)

Vietnam

PETROVIETNAM

2010

Indonesia

Ministry of Finance of Vietnam
PT Pertamina (Persero)

2015

China
India
Australia
ThailandReinsurance Agreements with European and
U.S. Private-sector Insurers

1997
2008

FY2019 Financial Results

Singapore

Korea Trade Insurance Corporation (KSURE)ECICS Limited (ECICS)

2014

China Export and Credit Insurance Corporation (SINOSURE)
Export Credit Guarantee Corporation of India (ECGC)
Department of Foreign Affairs and Trade (DFAT) / Export Finance
Asutralia (ECA)
Export-Import Bank of Thailand (EXIM THAILAND)

2018
2018
2018
2020

International Organizations
Cooperative Agreements

Euler Hermes Deutschland AG (EULER-HERMES) (private sector)
COFACE (private sector)

2013

American International Group, Inc. (AIG)
Tokio Marine HCC (HCC)2015

Mitsui Sumitomo Insurance Company (Europe) / MS Amlin

2019

Credendo-Ingosstrakh Credit Insurance, LLC

2019

2014
2016

The European Bank for Reconstruction and Development (EBRD)
1997
Export Credit Agencies and Export Financing Institutions of APEC (12 countries and 15 organizations) 1997
Multilateral Investment Guarantee Agency (MIGA)
European Investment Bank (EIB)

2018

Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC)
Islamic Development Bank (IsBD)

2019
2019

African Trade Insurance Agency (ATI)

2019

2018

Annual Report FY2019

31

NEXI Activities

Projects Covered by NEXI Insurance
Power

Republic of the Union of Myanmar / Natural Gas-fired Power Project
The Chugoku Electric Power Co., Inc., (Chugoku Electric Power)and Shikoku Electric Power Co., Inc., (Shikoku Electric Power)
joined a project to operate the currently running Ahlone natural
gas-fired power plant, which is located in Yangon, the largest
commercial city in the Republic of the Union of Myanmar (Myanmar),by purchasing some of the shares held by a subsidiary of TTCL
Public Company Limited, a major engineering company in Thailand.
NEXI has provided Overseas Investment Insurance to Chugoku
Electric Power and Shikoku Electric Power. Furthermore, withthe two companies’ equity participation in the project, NEXI has
underwritten reinsurance ceded from the Export-Import Bankof Thailand (THAI EXIM) for a portion of the risks related to its
Political Risk Insurance that has been provided to the operation of
the power plant since even before Chugoku Electric Power andShikoku Electric Power made their investment. This is the firstreinsurance effected under a reinsurance agreement (for mediumterm projects) concluded between NEXI and THAI EXIM.
In Myanmar, tight power supply is becoming a serious social
problem as the country’s economy grows. Under this situation, theMyanmar government is planning to construct new power plants
while aiming to secure sustainable and stable operation of existing
ones. This project will contribute to the realization of sustainable

and stable power supply for the country through utilizing theoperation and maintenance skills that both Chugoku ElectricPower and Shikoku Electric Power have acquired over the years.
Also, NEXI’s support for this project is expected to help Japaneseutility companies to expand their businesses overseas.
Date of signing the insurance contract: June 2019

( Photo provided by The Chugoku Electric Power Co., Inc. )Taiwan / Changfang and Xidao Offshore Wind Farm Project
MHI Vestas Offshore Wind A/S ( MVOW ) , an offshore wind
power equipment manufacturer of the Kingdom of Denmark that
Mitsubishi Heavy Industries, Ltd. has a 50% stake in, will supply,
install, and maintain 62 wind turbine generators and towers for a
589 MW offshore wind farm project being developed off the coastof Changhua Country of central Taiwan. The electricity generated
at the wind farms will be sold to Taiwan Power Company under a
20 year power purchase agreement after the start of commercial
operation.
Of the total NTD 90.0 billion (approximately JPY 324 billion) in
project financing, NEXI has provided loan insurance coverage for
NTD 10.2 billion (approximately JPY 37.0 billion) of the financing
provided by ten private financial institutions, based on its local
buyer’s credit. This is the first insurance provided by NEXI to
support MVOW’s exports.
Amid ever-increasing demand for energy, Taiwan is highly
dependent on imports for required energy resources, and thevolume of nuclear power generation is in a declining trend. The
Taiwanese government is therefore planning to install 5,700 MW
of offshore wind power by 2025. The project is in line with thisgovernment’s target and is expected to contribute to the overall
energy mix and decarbonization that Taiwan is striving for.
In addition, NEXI’s support for the project will contribute towards
the expansion of business opportunities for Japanese corporategroups in the offshore wind power installation market where
significant growth is expected, and the increased international

32

Annual Report FY2019

competitiveness of Japanese industry. Furthermore, this is the firsttime for NEXI to provide insurance for a project whose main sponsor
is an infrastructure fund because the project companies were
established through a fund operated by Copenhagen InfrastructurePartners, a Danish infrastructure fund management company.
With the continued diversification of funding sources globally, theinvolvement of infrastructure funds in various projects is likely toincrease. In response to such changing times and environments,
NEXI will strive to further strengthen its flexibility and abilities.
Date of signing the insurance contract: February 2020

( Photo provided by MHI Vestas Offshore Wind A/S )Japan’s collaborative policy towards Africa received the
Moroccan government’s support at the 7th Tokyo International
Conference on African Development ( TICAD7 ) held in August
2019, and thus the project is also in line with Japan’s policy toAfrica.
Date of signing the insurance contract: February 2020

NEXI Activities
Insurance Products

Mitsui & Co., Ltd. ( Mitsui ) , and French renewable energy
company EDF Renouvelables S.A. have agreed to participate in a
87.21 MW wind power construction project, located near Taza, acity in northern Morocco, through a project company establishedby the two companies. The project includes the operation andmaintenance of the wind farm, and the electricity generated will besold to Office National de L’Électricité et de l’Eau Potable (Moroccan
public electricity and water company) over a 20-year period after
the start of its operation.
Of the total co-financing ( EUR 113 million) procured by the
project company, NEXI loan insurance covers the financing
provided by two Japanese private financial institutions, MUFG
Bank, Ltd. and Sumitomo Mitsui Banking Corporation (EUR 44
million). The Japan Bank for International Cooperation (JBIC) has
also decided to provide financing for this project.
The Moroccan government aims to increase the renewableenergy share of total electricity to 52% by 2030. This is because
Morocco is poor in domestic fossil fuel resources and is highly
dependent on imports of such resources. This project is consistent
with this government policy and is expected to contribute to
the energy mix and reduction in the environmental burden that
Morocco is striving for.

NEXI Review of Performance

Kingdom of Morocco / Taza Wind Power Project( Photo provided by Mitsui & Co., Ltd. )Resources

Malaysia / Refinery and Petrochemical Integrated Development ProjectThis project employs international co-financing supported jointly
by several export credit agencies, including Compañía Españolade Seguros de Crédito a la Exportación (CESCE), Export-Import
Bank of Korea ( KEXIM ) , Korea Trade Insurance Corporation(KSURE), SACE S.p.A (SACE), JBIC, and NEXI.
By aiding this project, NEXI is offering financial support for theexports of Japanese companies, and it is expected that this will
help the companies maintain and strengthen their international
competitiveness.

About NEXI and
Organizational Operation

Date of signing the insurance contract: November 2019

FY2019 Financial Results

NEXI provided insurance for loans extended for a Refinery andPetrochemical Integrated Development ( RAPID ) project in thesouthern Malaysian state of Johor. The project is being undertaken
by Pengerang Refining Company Sdn. Bhd. (Pengerang Refining
Company) and Pengerang Petrochemical Company Sdn. Bhd.
(collectively, PRefChem).
The project involves Petroliam Nasional Berhad (PETRONAS),the state-owned petroleum company in Malaysia, and Saudi
Arabian Oil Company (Saudi Aramco), Saudi Arabia’s state-owned
national oil company, constructing and operating Malaysia’s
largest refinery and petrochemical integrated complex. The
complex, located in Pengerang, Johor, consists of a refinery witha capacity of 300,000 barrels per stream day and a petrochemicalcomplex for producing compounds such as ethylene, propylene,
polyethylene, polypropylene and glycols. Toyo Engineering
Corporation has been awarded an EPCC contract for the steam
cracker complex.
PRefChem is funding this RAPID project through project
financing. The funds to purchase equipment exported from Japan
were provided to Pengerang Refining Company through nearly
USD 1.5 billion in co-financing by Japan Bank for International
Cooperation (JBIC); Mizuho Bank, Ltd.; Sumitomo Mitsui Banking
Corporation; MUFG Bank, Ltd.; and Citibank, N.A., Tokyo Branch,and NEXI underwrote the insurance for about USD 600 million of
the financing provided by the commercial banks.

( Photo provided by PETRONAS )Annual Report FY2019

33

NEXI Activities

Projects Covered by NEXI Insurance
People’s Republic of Bangladesh /Loan insurance for Ghorasal Polash Urea Fertilizer Project
Mitsubishi Heavy Industries, Ltd. (MHI) has received the order fora fertilizer plant construction from Bangladesh Chemical Industries
Corporation (BCIC), a state-owned fertilizer manufacturer in the
People’s Republic of Bangladesh (Bangladesh). The project orderhas been placed through a consortium formed together with China
National Chemical Engineering & Construction Corporation Seven,Ltd., and thanks to the cooperation of Marubeni Corporation. The
fertilizer plant will be built in Ghorasal, 50 kilometers northeast of
the capital city of Dhaka.
Of the total co-financing of JPY 110.3 billion for the project,which is extended by commercial banks and the Japan Bank forInternational Cooperation (JBIC), NEXI has provided loan insurance
for JPY 44.2 billion loan jointly financed by MUFG Bank, Ltd. andTokyo Branch of the Hongkong and Shanghai Banking Corporation
Limited.
Agriculture remains the most important sector of Bangladeshi
economy, contributing more than 10% of the national GDP andproving employment for approximately 40% of the population.
With the recent economic growth and population expansion,
domestic demand for fertilizer has been increasing more than everbefore. Under such a situation, BCIC’ plants have deteriorated,the country therefore depends partially on imports for its fertilizer
supply. This project will help the country go a way towards

reaching self-sufficiency in fertilizer production and significantly
contribute to further economic development in the future.
In addition, by adopting MHI’s CO2 capture technologies in the
project will make it possible to both reduce the environmentalload and enhance urea production. With support from NEXI, it isanticipated that infrastructure exports by Japanese companies willcontinue to grow.
Date of signing the loan insurance contract: January 2020

( Rendering image of the plant, provided by Mitsubishi Heavy
Industries Engineering Ltd. )Russian Federation / Arctic LNG2 Project
Mitsui & Co., Ltd., ( Mitsui ) and Japan Oil, Gas and Metals
National Corporation (JOGMEC) have invested in the Arctic LNG2
Project, in which 10% interest is held by the jointly owned Dutch
Company, Japan Arctic LNG B.V. The project is being developed in
the Gydan Peninsula of the Russian Federation, by PAO Novatek,
a leading Russian company engaged in the production and sale ofnatural gas.
This is an international project that not only PAO Novatek,
Mitsui, and JOGMEC, but also France-based Total, China National
Petroleum Corporation (CNPC), and China National Offshore Oil
Corporation ( CNOOC ) are taking part in. The project involves
developing a conventional onshore gas field and constructing
natural gas liquefaction facilities with an annual production capacityof 19.80 million tons. The production, transport, and sale of natural
gas are expected to start around 2023.
NEXI has provided Overseas Investment Insurance for Mitsui’s
investment in the project. Japan Bank for International Cooperation(JBIC) and several private financial institutions are also providing
co-financing.
Mitsui will be obtaining a volume of natural gas proportional toits 10% stake in the project, which allows Japan to secure a stablesupply of natural gas, the country’s important energy resource.

34

Annual Report FY2019

Natural gas produced from the project will be delivered mainly to
Asia and Europe via the Northern Sea Route, helping to create an
LNG value chain in Asia. This is expected to contribute not only
to the economic growth of Japan and Russia, but also strengthen
diplomatic relations between the two countries.
Date of signing the insurance contract: July 2019

( Rendering image of the integrated liquefied natural gas facility,
provided by PAO Novatek )NEXI Review of Performance

Infrastructure

Republic of Palau / Palau International Airport Terminal Operation Project
institutions therefore have decided to provide financial assistancefor the project, including loans by the Japan International
Cooperation Agency ( JICA ) , capital investments by JOIN, aswell as Overseas Investment Insurance by NEXI, in order to help
Japanese companies’ infrastructure development overseas bymaking the most of the private sector’s strengths in its businessexpertise and networks.

NEXI Activities

Date of signing the insurance contract: April 2019

Insurance Products

The three Japanese corporations Sojitz Corporation (Sojitz),
Japan Airport Terminal Co., Ltd. ( Japan Airport Terminal ) andJapan Overseas Infrastructure Investment Corporation forTransport & Urban Development (JOIN) have participated in theoperation management in Palau International Airport. The project
includes renovating and expanding the existing passenger terminalof the Airport, the capital gateway to the Republic of Palau (Palau),
and also operating commercial facilities for 20-years through a
joint venture established together with the government of Palau.
NEXI has provided Overseas Investment Insurance to cover not
only the Palau political risk that Sojitz and Japan Airport Terminal’s
investment entails, but also the risk of a breach of the concessionagreement concluded with the government of Palau. This is thefirst Overseas Investment Insurance that NEXI has offered for a
project in Palau.
Palau International Airport is the country’s sole international
airport, and its importance has risen in recent years thanks to a
growing visitor population. The project will contribute significantly
to sustainable social and economic development in Palau, acountry whose core industry is tourism. It is also in line with theJapanese government’s efforts toward the realization of “Freeand Open Indo-Pacific”. Three government-affiliated financial( Rendering image of the airport, provided by Sojitz Corporation )United Republic of Tanzania / Standard Gauge Railway Project
support. It is expected that utilizing One-Stop-Shop reinsurance
scheme based on the reinsurance agreement will allow Japanesecompanies to further expand exports and investments to theAfrican countries.
Also, as represented by “the Partnership on Sustainable
Connectivity and Quality Infrastructure” signed by the JapanesePrime Minister Shinzo Abe and the European Commission
President Jean-Claude Juncker in September 2019, Japanese andEuropean cooperation is becoming more and more important. The
reinsurance program this time could be considered as a symbolic
approach that encourages Japanese and European ECAs tomutually collaborate toward the realization of an infrastructure
project.

About NEXI and
Organizational Operation

FY2019 Financial Results

In a large-scale infrastructure project implemented at theinitiative of the government of the United Republic of Tanzania(Tanzania), Mitsui & Co., Ltd. exported railroad rail manufactured
by Nippon Steel Corporation. This project includes renovationand construction of the facilities for semi high-speed railway
stretching 1,219 kilometers, being operated with maximum train
speed of 160 km/h, such as rail tracks, bridges, signaling systems,
station buildings and management rooms etc. The project area
is divided into five major sections, and the railroad rail exported
from Japan will be used for two sections of them: Dar es Salaam Morogoro, and Morogoro – Makutupora, which are currently underconstruction.
Based on a reinsurance agreement concluded with EKF
Denmark’s Export Credit Agency (EKF) on August 20, 2019, NEXI
has decided to provide reinsurance for export credit issued by EKF
to the project. This is the first reinsurance program realized under
this agreement. Other than NEXI, four export credit agencies fromthe Kingdom of Spain, the Republic of Austria, the Italian Republic
and the Swiss Confederation, will be participating in the project
finance through reinsurance. Also, the Swedish Export Credit
Corporation, the African Export-Import Bank, the Development
Bank of Southern Africa and the Eastern and Southern African
Trade and Development Bank will being part of the project.
As evidenced by the 7th Tokyo International Conference on
African Development (TICAD 7) held in Yokohama in August 2019,Japan has been promoting its business in the African countries
through joint efforts by both the government and private sectors.
NEXI is strengthening collaborations with related organizations
toward smooth project implementation through financing

Date of signing the reinsurance contract: May 2020

( Photo provided by Standard Chartered Bank )Annual Report FY201935

NEXI Activities

Projects Covered by NEXI Insurance
Agriculture

Republic of Sierra Leone / Investment Project on Pineapple Plantation
and Processing Facility Development
Dole International Holdings, a wholly owned subsidiary of
ITOCHU Corporation (ITOCHU), intends to establish pineapple
plantation and an Agro-processing facility in Lugbu Chiefdom,
located about southeast 200 km of Freetown, the capital city of
the Republic of Sierra Leone (Sierra Leone).
NEXI has provided Overseas Investment Insurance for theinvestment by Dole International Holdings in order to cover war
and other force majeure risks in Sierra Leone. NEXI has alsooffered reinsurance for the Multilateral Investment Guarantee
Agency (MIGA) of the World Bank Group, to share a part of therisks covered by MIGA, on expropriation and violations of the
project-related agreements by the Sierra Leone government. Thisis the first reinsurance effected for the African region under the
Memorandum of Understanding on Reinsurance Cooperation
concluded between MIGA and NEXI in May 2018.
The project will create a large number of jobs in the region
where there were civil wars and other political instabilities. This is a
project resulted from the cooperation and efforts by ITOCHU, theJapanese and Sierra Leone governments, MIGA, NEXI, and othervarious parties involved. It can be considered a business modelof Japan’s overseas investment that proves a win-win relationshipbetween Japan and Sierra Leone, which will significantly contributeto Japanese business expansion and Sierra Leone’s social
development. With NEXI’s support, it is expected that Japanesecompanies have greater business opportunities in Africa with highgrowth potential.
Furthermore, this project is considered as an important businessinitiative that can contribute to the promotion of Japan’s overseas
investment and industrial diversification, which was stated in theJapanese government’s policies released at the Seventh Tokyo
International Conference on African Development (TICAD7) held in
August 2019.
Date of signing of the insurance contract: April 2019
Date of signing of the reinsurance contract: June 2019

( Photo provided by ITOCHU Corporation )Federative Republic of Brazil / Loan for Long-term Working Capital of
Louis Dreyfus Company Brasil S.A.
NEXI provided loan insurance to Louis Dreyfus Company Brasil
S.A. (LDC Brasil), one of the largest exporters and processorsof agricultural products in the Federative Republic of Brazil(Brazil). The USD 180 million loan was delivered as part of a
syndicated export prepayment facility that will finance long-termworking capital needs, with co-financing by Citibank, N.A., Tokyo
Branch; BNP Paribas (acting through its Tokyo branch); ING
Bank N.V., Tokyo Branch; Shinkin Central Bank; Commerzbank
Aktiengesellschaft, Tokyo Branch; The Bank of Kyoto, Ltd.; andThe Joyo Bank, Ltd.
LDC Brasil was established in 1942 as the Brazilian subsidiaryof Louis Dreyfus Company B.V., a leading global merchant andprocessor of agricultural goods, founded in 1851. LDC Brasil
sources, processes and merchandizes products ranging fromsoybeans and corn - key items in Japan’s food security strategy- to sugar, rice, cotton, coffee and citrus juices. As one of theworld’s largest food exporters, Brazil ranks first for soybean
and second for corn exports by volume. LDC Brasil is a leading
exporter of the country’s major agricultural production, the largest
for cotton and rice, and among the top exporters of corn, coffee
orange juice and oilseeds such as soybeans.
This project embodies one of the Japanese government’s
policies: the Export Strategy for Infrastructure Systems (revised by
the Management Council for Infrastructure Strategy in FY 2019).
The strategy aims to ensure a sustainable supply of food in Japan,
describing that public-private measures should be considered tomeet the following goals. One is to increase agricultural production

36

Annual Report FY2019

and investment on a global scale. The other is to hold Japan’s foodimport capacity constant and to add new suppliers: specifically,in Latin America and other regions, by strengthening Japanesefood procurement efforts for such products as soybeans and corn
as well as by encouraging overseas investment in the agriculture
sector. In line with these purposes, the loan insurance will trigger
Japanese companies to import Brazilian agricultural commodities
such as soybeans and corn from LDC Brasil, thereby contributing
to an increase in Japan's food procurement and diversification of
suppliers.
Date of signing the insurance contract: December 2019

( Photo provided by Louis Dreyfus Company Brasil S.A., taken
by Marcio Bruno )NEXI Review of Performance

Machinery and Equipment

India / Wire Rod Manufacturing Facilities Installation Project
Date of signing the insurance contract: January 2020

NEXI Activities( Photo provided by Primetals Technologies )Insurance Products

JSW Steel is a leading private steel manufacturing company
in India, in which JFE Steel Corporation holds a 15% stake.
JSW Steel is setting up a wire rod mill of 1.2 mtpa capacity at
Vijayanagar Works in Karnataka State in southwestern India.
For this project, Primetals Technologies USA LLC and Primetals
Technologies India Private Limited, both subsidiaries of Primetals
Technologies Ltd. have delivered a complete set of facilities.
This project has been carried out with the co-financing of USD
49.44 million from Mizuho Bank, Ltd., and the Japan Bank forInternational Cooperation (JBIC), under the export credit line ＊established between JBIC and JSW Steel on March 26, 2018. Of
the co-financing, NEXI has offered loan insurance for the financing
portion of USD 19.78 million provided by Mizuho Bank.
In India with growing new steel demand in the background of
the country’s undergoing remarkable economic growth, there isa strong interest in Japanese high-quality steel manufacturing
facilities. Through providing this insurance, NEXI helps Japanese
overseas subsidiaries to expand their exports and sales of industrial
machines and equipment, while quickly and flexibly responding to
the investment demand by JSW Steel, which has been financed bya Japanese company.
＊An export credit line is a form of export financing offered within a certain
amount of financing limit, in order to promote equipment exports fromJapan.

Russian Federation /Export of Centrifugal Compressors to Urea Plant of PJSC ACRON
About NEXI and
Organizational Operationequipment in recognition of its high quality products and reliability
in respecting delivery deadlines, as well as the long-term deferredpayment offered for the exports. In April 2017, NEXI announced
that it would restart offering export credit insurance even for
projects with deferred payment of two or more years. This projectis the first one with long-term deferred payment for Russia since
NEXI’s resumption of such insurance service.
Date of signing the insurance contract: September 2019

FY2019 Financial Results

NEXI has provided Export Credit Insurance (for a period of morethan two years) for Hitachi Capital Corporation (Hitachi Capital)
to support its exports of centrifugal compressors and related
equipment, used in the Urea Plant of PJSC ACRON, one of theleading fertilizer producers in the Russian Federation (Russia).
Being the top producer and distributor in the field of fertilizers,PJSC ACRON does not only conduct sales in Russia but also
exports its fertilizers and chemicals used in fertilizer production
to various countries all over the world. The company’s Veliky
Novgorod production facility at present emits a significant amountof carbon dioxide generated from producing ammonia into
the atmosphere. However, the company is planning to collect,compress, and reuse the carbon dioxide at the urea plant locatedin the same facility in order to further increase its urea production
capacity while raising self-sufficiency rate for fertilizer raw materials.
Hitachi Capital will be exporting centrifugal compressors, which
are major equipment required for the urea production, and ancillaryequipment such as motors with long-term deferred payment overa five-year period.
The ordered centrifugal compressors will be manufactured
by Hitachi Industrial Products, Ltd. who has a track record
in delivering machineries to PJSC ACRON in 2016 when thecompany launched the Veliky Novgorod production facility. Hitachi
Industrial Products has been selected as a supplier of facility( Photo provided by Hitachi Industrial Products, Ltd )Annual Report FY201937

NEXI Activities

SME Exports Covered by NEXI Insurance
Wagyu Beef Exports
The agricultural producer Ushichan Farm Co., Ltd. (Ushichan
Farm) based in Ishinomaki City, Miyagi Prefecture, has taken

Export value covered by the insurance:
About JPY 2.8 million

out Export Credit Insurance for SMEs and AFF Sector toDate of signing the insurance contract: July 2019

reduce the risk of non-payments from overseas customers
after changing its payment terms for overseas transactions
from advanced payment to deferred payment arrangements.
Since its foundation in 1970, Ushichan Farm has beencommitted to raising Japanese cattle and selling Japanese
Wagyu beef and processed meat products. It works to supply
safe & secure beef by using fodder produced in Japan,
including rice straw and hay from local producers, and growing
some of its feed on its own farms.
In order to meet the overseas demand, Ushichan Farm willcontinue to deliver its flavorful Japanese Wagyu beef to many
people around the world through the production of safe &secure beef, while utilizing export credit insurance.

( Photo provided by Ushichan Farm Co., Ltd. )Green Tea Exports
Yamama Masudaen Co., Ltd. ( Yamama Masudaen ) has

Export value covered by the insurance: JPY 810,000

joined Export Credit Insurance for SMEs and AFF Sector toDate of signing the insurance contract: January 2020

protect its exports of green tea to Ukraine against the risk of
non-payments from a new buyer.
Located in an excellent natural environment of theMakinohara plateau in the city of Omaezaki in Shizuoka
Prefecture, Yamama Masudaen has developed an integrated
production system, from tea cultivation to production and salesof tea products, with five generations and nearly 150 years offamily commitment and experience since 1870.
Through its export business, which it began in 1991, thewide variety of Japanese tea the company offers have been
enjoyed in more than twenty countries and regions, mainly
in North America, Europe and Asia. In recognition of suchbusiness efforts, in 2015, the company was awarded theEmperor’s Cup, the top prize in the silk yarn and local
specialty product category at the Agriculture, Forestry, andFisheries Festival sponsored by the Ministry of Agriculture,
Forestry, and Fisheries.
Yamama Masudaen will continue to deliver delicious
Japanese tea to many people overseas, while utilizing export
credit insurance.

38

Annual Report FY2019( Photo provided by Yamama Masudaen Co., Ltd. )MARUMAGO Co., Ltd.(MARUMAGO), located in the city

people throughout the world with the aim of conveying theof Shimada in the center of Shizuoka Prefecture, the most

attraction of its Japanese tea.

prominent tea region that has occupied the first position in＊The Shizuoka Bank: business tie-up with NEXI since January 2013.

Japan in the tea production. Through an introduction fromThe Shizuoka Bank, Ltd.＊ , one of NEXI business partners,
MARUMAGO has applied for Export Credit Insurance for SMEs

NEXI Review of Performance

Japanese Tea Exports

Export value covered by the insurance: JPY 11 million
Date of signing the insurance contract: March 2020

and AFF Sector as a means to hedge the risk in collecting
NEXI Activities

sales proceeds under deferred payment terms set up for its
Japanese tea exports to Hong Kong.
Established in 1905, MARUMAGO has been producing
Japanese tea for over a century, sticking to quality tea leaves
cultivated in its own tea plantations. The company quickly
promoted the modernization of tea production system inthe era when all tea production process from tea picking
to tea processing were completed by hand. At the time,
MARUMAGO introduced tea production equipment in orderto hold quality to the highest standard, and expanded its

Insurance Products

business overseas while developing its plantations, introducing
larger tea leaf harvesters, and building new tea plants.
Remaining true to the traditions and culture of Japan,
MARUMAGO will continue to offer Japan’s precious tea to( Photo provided by MARUMAGO Co., Ltd. )Frozen Seafood Exports
About NEXI and
Organizational Operation

Japan Network Trading Company (Japan Network Trading),
based in Totsuka ward of Yokohama city in Kanagawa

Export value covered by the insurance: JPY 11.98 million
Date of signing the insurance contract: August 2019

Prefecture, has enrolled Export Credit Insurance for SMEs and
AFF Sector for its exports of frozen seafood to the Socialist
Republic of Vietnam (Vietnam), in order to manage the risk ofcollecting payments from overseas buyers.
Founded in May 2017, as a trading company that supports
the regional industries in Japan, Japan Network Trading has

FY2019 Financial Results

been exporting Japanese food products made by domestic
companies to consumers in Asia, primarily Vietnam. In
Vietnam, a country that continues to enjoy economic growth,
there has been growing interest lately in Japanese food, whichis recognized around the world as being very healthy and safe.
Serving as an intermediary between Vietnamese consumers
who want quality Japanese food and the companies andproducers throughout Japan who intend to expand theirsales channels overseas, Japan Network Trading engages inexporting quality frozen seafood products and ingredients.
The company will continue to expand the volume of its safe

( Photo provided by Japan Network Trading Company )food exports by serving as a bridge between Japan and theworld, while utilizing export credit insurance as a hedging tool.

Annual Report FY2019

39

NEXI Activities

SME Exports Covered by NEXI Insurance
Farmed Salmon Exports
Aysen Asia Inc. (Aysen Asia), which is located in Tsukiji in

Aysen Asia plans to expand its export volume of quality

Chuo-ku, Tokyo, holds Export Credit Insurance for SMEs

farmed salmon to Asian markets while effectively utilizing

and AFF Sector to reduce risks associated with collection ofexport credit insurance.

deferred payments for its exports of farmed salmon to Taiwan.
The most distinctive feature of this insurance is its simple
design, which makes it possible to apply for insurance for each

Export value covered by the insurance: JPY 10.77 million
Date of signing the insurance contract: January 2020

export contract. Also, it is available at relatively low premium
rate.
Since being established in 2017 as the Japanese subsidiaryof Salmones Aysen S.A., a Chile-based salmon farming
company, Aysen Asia has served as a platform for developing
new businesses in Asia, and exports quality farmed salmon
from Japan to Taiwan and various other Asian countries.
To start using the insurance, the company consulted withNEXI from the negotiation phase with overseas buyers.

( Photo provided by Aysen Asia Inc. )Dried Mullet Roe Exports
Shimozono Satsuo Syouten Co., Ltd. (Shimozono Satsuo

Ahead of upcoming exports to Socialist Republic of Vietnam

Syouten) of Akune City, Kagoshima Prefecture, uses Export

scheduled in the near future, Shimozono Satsuo Syouten

Credit Insurance for SMEs and AFF Sector in order to reduceplans to continue to expand sales in overseas markets.

non-payment risks by overseas buyers in exporting its dried＊The Miyazaki Bank: business tie-up with NEXI since February 2014.

mullet roe to Taiwan, with a deferred payment method.
Founded in 1939, the company manufactures and sells driedsalted marine products, primarily whole dried round herring.

Export value covered by the insurance: JPY 9 million
Date of signing the insurance contract: March 2020

Under the corporate philosophy of “offering a life-enrichingexperience with pride and satisfaction to customers by addinga twist to marine products,” it has taken new initiatives such as
producing “Tabisuru Maruboshi,” whole dried fish pickled in oil.
As for overseas business, Shimozono Satsuo Syouten
had been selling its products through trading companies,
but for the first time, it has decided to deal directly with thecounterparty taking the opportunity of exporting its dried
mullet roe to Taiwan. Although the company was initiallyconsidering to set up advanced payment terms, it has beenchanged to deferred payment terms as a result of discussion
and negotiation with the buyers. Amid a situation where thecompany was concerned about the risk of non-payment fromthe buyer, it was introduced to Export Credit Insurance by The
Miyazaki Bank, Ltd.＊, one of NEXI business partners, and hastaken out the first-time Export Credit Insurance.

40

Annual Report FY2019( Photo provided by Shimozono Satsuo Syouten Co., Ltd. )Having been engaged in sake brewing in Tendo City,

convey the attractiveness of Japanese sake to customers

Yamagata Prefecture, Mitobe Sake Brewery Co., Ltd. (Mitobe
Sake Brewery) used Export Credit Insurance for SMEs andoverseas by proactively exporting sake made with traditional

AFF Sector for its exports to the Republic of Korea.
The company was initially concerned about political risks inthe destination country for export, and just at that time, wasintroduced to Export Credit insurance by The Shonai Bank,NEXI Review of Performance

Sake Exportssake-brewing methods.
＊The Shonai Bank: business tie-up with NEXI since January 2013.

Export value covered by the insurance: JPY 230,000
Date of signing the insurance contract: December 2019

NEXI Activities

Ltd.＊ who is one of NEXI business partners. After realizingthat this insurance provides financial protection to the insured
in the event of losses not only due to commercial risks suchas customers’ non-payment, but also political risks including
import restrictions, which are beyond the contractual partner’s
control, the company has therefore decided to conductongoing transactions with customers in South Korea while
utilizing the insurance in preparation for special needs.
“Yamagata Masamune” produced by Mitobe Sake Brewery,which was founded in 1898, is extremely popular even

Insurance Products

among sake connoisseurs for its clean sharp finish like theedge of Legendary Masamune’s blade, which is the result ofusing infiltrated water having a high hardness from the Ou
Mountains.
From Yamagata Prefecture, one of Japan’s premier sakeproducing regions, Mitobe Sake Brewery will continue to( Photo provided by Mitobe Sake Brewery Co., Ltd. )Nice Corporation (Nice) based in Yokohama City, Kanagawa
Prefecture, holds Export Credit Insurance as a risk reduction
measure in collecting payments from customers overseas incases where the amount of deferred payments expands as it
continues to export cedar lumber to New Zealand.

About NEXI and
Organizational Operation

Cedar Exports
Nice will continue to export domestic lumber making itsuitable for use worldwide, while utilizing the insurance.
Export value covered by the insurance: JPY 4 million
Date of signing the insurance contract: January 2020

The company is engaged in supplying construction
materials, conducting real estate business and promoting
FY2019 Financial Results

wooden non-housing structures. As for lumber, it procuresquality domestic lumber from all over Japan throughpartnerships with the country’s leading lumber manufacturers
and supplies high-quality products to a wide variety ofcustomers both within and outside Japan.
Nice has built a procurement system that enables it
to prompt acquisition of Forest-certified wood used inconstruction from all 47 prefectures. Of the certified domestic
cedar collected from 47 prefectures for the constructionof exterior eaves of Japan National Stadium, which wascompleted in December 2019, the company has supplied
the lumber used in the louver works for that part while
implementing the construction work.

( Photo provided by Nice Corporation )Annual Report FY201941

NEXI Activities

SME Exports Covered by NEXI Insurance
Lumber Exports
In exporting broadleaf lumber from the Tohoku region innortheastern Japan to Southeast Asia, National Federationof Forest Owners’ Co-operative Associations (JForest) basedin Tokyo used Export Credit Insurance for SMEs and AFF
Sector to reduce the risk of non-payment from new customers

JForest will actively expanding its business overseas while
utilizing the insurance for transactions with new customers.
Export value covered by the insurance: JPY 2 million
Date of signing the insurance contract: January 2020

overseas.
JForest is the national organization of forest owners’ cooperative associations, consisting of the largest number ofmembership in the world, including the associations from 45
prefectures, Tokyo Prefectural Forest Owners’ Cooperative,
and Osaka Prefectural Forest Owners’ Association. Basedon the spirit of mutual support amongst themselves, it aims
to promote the socioeconomic development of its members,
cultivation of sustainable forest resources, and forest
productivity.
In addition to supplying its Japanese consumers withconstruction lumber, wood packaging materials, andwoodchips procured from the association nationwide,
JForest encourages greater consumption of domestic lumber
resources and a stable supply of them. In recent years, theassociation has started to export Japanese lumber, with aneye toward meeting overseas demand.

( Photo provided by National Federation of Forest Owners’
Co-operative Associations )Medical Supply Exports
LIBATAPE PHARMACEUTICAL CO., LTD. (LIBATAPE) basedof NEXI insurance subscribers, and the company decided toin Kumamoto City, Kumamoto Prefecture, used Export Credit

join the insurance for the first time, as a result of taking into

Insurance for SMEs and AFF Sector to reduce non-payment

consideration the benefits of insurance to its business.

risks associated with its sanitary supply exports under deferredpayment terms to medical equipment wholesalers in the
United Arab Emirates (UAE).
Established in 1878, LIBATAPE became the first company inJapan to successfully develop first aid bandage in 1960. Since

LIBATAPE will continue to expand its sales in the overseas
market.
Export value covered by the insurance: JPY 8 million
Date of signing the insurance contract: October 2019the company started selling the plaster under the name of“LIBATAPE,” the brand has been highly recognized especiallyin the Kyushu region, while being widely used even now as a
general word meaning “First aid bandage”. Other than medical
and sanitary articles, it manufactures and sells a wide variety ofcosmetics.
As for overseas business, LIBATAPE has shipped its
products to Kingdom of Saudi Arabia, People's Republic ofChina and Republic of Korea so far, basically on conditionof advanced payment. However, a buyer from UAE hasrequested the company to partially accept deferred payment
terms on future transactions, and the company was concerned
about non-payment risks in such case. Just at the time,
Export Credit Insurance was introduced to LIBATAPE by one

42

Annual Report FY2019( Photo provided by LIBATAPE PHARMACEUTICAL CO., LTD. )Hytem Co., Ltd. (Hytem) based in the city of Kakamigahara

Trade Organization (JETRO), and applied for it for the first time.

in Gifu Prefecture, has signed up for Export Credit Insurance toHytem will continue to develop its business in overseas

reduce non-payment risks by overseas buyers in exporting its
egg farm automation (EFA) equipment to the People’s Republicof Bangladesh (Bangladesh), under deferred payment terms.
Established in 1972, Hytem is an innovative manufacturer

NEXI Review of Performance

Egg Farm Automation Equipment Exports

markets.
Export value covered by the insurance: JPY 150 million
Date of signing the insurance contract: December 2019supplying technology-driven equipment in niche markets.
NEXI Activities

Having secured the largest market share in Japan, consistingof numerous egg farms with the world’s top-level facilities, thecompany is now aiming to become a leader providing highstandard of performance and product quality in Asia, the mostpopulous continent, accounting for roughly 60% of the global
population.
As for overseas business, Hytem has so far shipped its
EFA equipment to various customers in the poultry industry inPeople’s Republic China and Socialist Republic of Viet Nam.
However, with new opportunity to expand its business into

Insurance Products

Bangladesh, which is an unknown market to the company,
Hytem was concerned about both political and commercial
risks in the country. Just at the time, the company was( Photo provided by Hytem Co., Ltd. )introduced to Export Credit Insurance by the Japan External

Motorcycle Parts Exports

Insurance with Simplified Procedure to reduce non-payment
risks in exporting motorcycle parts to its business partners

About NEXI and
Organizational Operation

DIRTFREAK CO. (DIRTFREAK) based in Seto City, Aichi
Prefecture, has started to use Comprehensive Export

company had been taking by itself. DIRTFREAK will continue
to expand globally while utilizing the insurance.
Date of signing the insurance contract: June 2019around the world under deferred payment terms.
Since its establishment in 1990, the company has been
engaged not only in the sales of motorcycle parts, but also inthe planning and production of its own products, as evidenced

FY2019 Financial Resultsby “Yotsuba Moto Series” for children. Among many typesof motorcycles, DIRTFREAK provides a wide variety of offroad bike-related products, and actively exports overseas,
including Europe and North America. In 2017, it became awholly-owned subsidiary of Daytona Corporation, a firm in thesame line of business, and has built a stronger sales network
through this process.
Having been introduced to Export Credit Insurance by one
of NEXI insurance subscribers, the company has applied forthe insurance. This has allowed DIRTFREAK to surely securea hedging instrument against overseas business risks the( Photo provided by DIRTFREAK CO. )Annual Report FY2019

43

Insurance Products
Trade and Investment Insurance― How It Works

46

Insurance Products to Support Your Business47

Insurance Application Process

54

TOPICS58

Insurance Products

Trade and Investment Insurance – How It Works
Trade and investment insurance covers risks associated withinternational trade and other overseas transactions that cannot
be covered by private-sector insurance.
The purpose of trade and investment insurance is tosupport and promote the overseas expansion of companies by
mitigating the risks associated with foreign trade and overseas
investment.

Foreign Country

Governmentof JapanInsurance
contract

100% equity

Japanese
Company

Export, investment,
ﬁnancing, etc.

Foreign Company
Overseas Project

Trade and investment insurance covers losses incurred by Japanese companies, banks, etc. due to the following risks.

Political Risk＊

Commercial Risk＊● Restriction or prohibition on foreign exchange transactions,

restriction or prohibition on imports● War, civil war, revolution, etc.
● Delay in the remittance of foreign currencies attributable
to the paying country● Punitive tariffs, terrorism● Sanctions imposed by the UN or countries other thandestination countries● Expropriation● Natural disaster, or any other state of emergency whichcannot be considered attributable to the party to the contract● Non-payment by the counterparty for 3 or more months(except for cases where the exporter is deemed liable forclaims made by the counterparty, such as damages or defects)● Bankruptcy of the counterparty● Other reasons equivalent to bankruptcy● Unilateral cancellation of export contracts with foreign

governments, etc. before shipment.
(Unilateral cancellation by private buyers before shipment
is only covered under a separate special clause.)

Event occurs

The following losses are covered:Pre-shipment risk
Losses incurred due tofailure to ship

Post-shipment risk

Overseas investment risk

Losses incurred due toLosses on investment assets

failure to collect receivables,
service fees, or loans

as a result of discontinuationor suspension of a joint venture＊ Political Risk: Risk caused by force majeure events that cannot be considered attributable to the party to the contract (also referred to as Country Risk)＊ Commercial Risk: Risk that can be considered attributable to the counterparty to the overseas transaction (also referred to as Credit Risk)

46

Annual Report FY2019

Insurance Products

Insurance Products to Support Your Business
NEXI Review of Performance

Export Credit Insurance
Insurance for export, intermediary trade, and technical cooperation
This insurance covers losses arising from the inability to ship
items or collect receivables after shipping goods or providing
technology, due to i ) force majeure, such as war, revolution,
terrorism, import restriction/prohibition and natural disaster, orii ) bankruptcy or default of the counterparty, when Japanese
exporters export goods, conduct intermediary trade, or provide
technical services, such as construction.

NEXI Activities 

Export Credit Insurance
Unable to export

Japanese
Exporter××

Foreign
Importer

Unable to collect receivables

Insurance Products !
 Foreign
Manufacturer(Country A)

About NEXI and
Organizational Operation

Unable to ship

×Japanese
Intermediary
Trader×

Unable to collect receivables

Foreign
Importer(Country B)

FY2019 Financial Results＊ We offer two types of Export Credit Insurance: speciﬁc insurance provides coverage for a single business contract andenterprise comprehensive insurance provides coverage for all contracts of a company within the scope of the policy.

Insurance for License Export (Intellectual Property License Insurance)Intellectual Property License Insurance covers losses
incurred when Japanese companies that provide patents,
know-how, or copyrights abroad are unable to collect paymentof license fees such as royalties due to i ) force majeure,including war, or ii ) bankruptcy or delay in payment by thecounterparty.

Annual Report FY2019

47

Insurance Products

Insurance Products to Support Your Business
Trade Insurance for Standing Orders from Specific Buyers
Insurance for companies that continually conduct business with specific buyers
This insurance is suitable for transactions with a buyer orbuyers to whom a Japanese exporter repeatedly supplies
products, etc.

Simplified application procedures: This insurance does notneed to be applied for each export contract. All insurable
export contracts made during the insurance contract period( 1 year ) that meet certain conditions are automaticallycovered.

The features of this insurance are as follows:
Exporter sets limit on insurance claims: The limit on
insurance claims is set for each buyer based on theirestimated value of transactions for the year.

＊ The risks covered by this insurance are the same as those covered byExport Credit Insurance.

Country B
Buyer ②

Country B
Buyer ③
(Subsidiary)

Credit risk of exporter’s
subsidiary is not covered.

Country A
Buyer ①Country B
Buyer ④

Japanese
ExporterCoverage may be
unavailable depending
on country category or
buyer category.

Country A
Buyer ②(Not covered
due to buyer
category)

Country C
Buyer(Not covered
due to country
category)

Scope of coverage desired by exporter

Country B
Buyer ①

Scope of coverage provided by NEXI

Trade Insurance forStanding Orders
from Specific Buyers

Comprehensive Export Insurance with Simplified Procedure
Insurance for companies that continually or repeatedly conduct business with a number of buyers
This insurance comprehensively covers all export/intermediary trade contracts concluded by Japanese exportersthat meet certain conditions during the insurance contract
period ( 1 year ) . Exporters estimate the payment owed forshipped goods based on the export contract and notify NEXI
by the end of the month after shipping. With this insurance,

the exporter does not need to purchase a policy for each
export contract, and the procedures for changing the terms
and conditions of the contract are less likely to occur because
the notification is made after shipment. Therefore, application
procedures are simpler than for other types of insurance.
＊ The risks covered by this insurance are the same as those covered byExport Credit Insurance.

Scope of coverage provided by NEXI

Japanese
Exporter

Comprehensive Export
Insurance with
Simplified Procedure

County A
Buyer ①Country A
Buyer ②

County B
Buyer ③Credit risk of exporter’s subsidiary is not covered.
Coverage may be unavailable depending on country
category or buyer category.
48

Annual Report FY2019

NEXI Review of Performance

Export Credit Insurance for SMEs and AFF Sector
Insurance for supporting exports by Japanese SMEs and those engaged in the businessof agriculture, forestry and fisheriesThis insurance provides support for the exports of Japanese
small and medium sized enterprises (SMEs) and organizations
related to agriculture, forestry and ﬁsheries ( AFF Sector ) .
It covers losses incurred in cases where receivables areuncollectable. It offers simple application procedures and

NEXI Activities

6.-02 0#"'2,130,!#$-0 1," #!2-0

speedy payment of insurance claims to meet the needs of
SME and AFF customers. Furthermore, applicants for thisinsurance who also receive a bank loan can simultaneously
complete procedures to establish a pledge on insurance claim
rights.
ExportJapanese
SME or
AFF
Organization

×

Foreign
Importer
Unable to collect receivables

Loan

JapaneseBank
Create pledge

Insurance Products

Export Bill Insurance
export costs, the insurance covers losses if the bills are notpaid because of i ) force majeure, such as war, revolution,prohibition of foreign currency exchange, suspension ofremittance and natural disaster, or ii ) bankruptcy or default of aforeign importer.

About NEXI and
Organizational Operation

This insurance makes it easier for banks to purchasedocumentary bills by primarily covering losses incurred bybanks that purchase documentary bills drawn without an L/C
if a buyer fails to pay the bill when it comes due. For Japanesebanks that purchase documentary bills issued to recover 

Export Bill Insurance

JapaneseBank×Foreign
CollectingBank &!$&( Drawer )*"!$&! &$& &!"+FY2019 Financial Results

Japanese
Exporter×$% &
#'%& !&&! !

Foreign
Importer( Drawee )Prepayment Import InsuranceThis insurance covers losses incurred by Japanese
importers who pay for goods in advance in accordance with
contract terms but then cannot import the goods nor receivea refund for the prepaid money due to i ) force majeure, suchas war, revolution, prohibition of foreign currency exchange,suspension of remittance and natural disaster, or ii ) bankruptcy
or default of the counterparty, even after requesting a refund of
the prepaid money in line with the refund terms.

Annual Report FY2019

49

Insurance Products

Insurance Products to Support Your Business
Buyer’s Credit Insurance
Insurance for loans, etc. such as for payment of export goods (Buyer’s Credit)
This insurance covers losses incurred by Japanesecommercial banks or ﬁnancial institutions that provide loans,etc., ( including bond purchases and surety obligations) toforeign importers that purchase goods and services fromJapanese exporters if they are unable to receive repaymentof the loans or bonds due to i ) force majeure, such aswar, revolution, prohibition of foreign currency exchange,suspension of remittance and natural disaster, or ii ) bankruptcy
or default of the importer. The terms and conditions for theloan agreements, etc., must comply with international rules.
(See page 58.)

Loan, etc.

-0#'%,
+.-02#037#01 0#"'2,130,!#

Export contract, etc.

  ＊.,#1#
,)×

Unable to repay.,#1#
6.-02#0＊ NEXI provides the insurance only to Japanese commercial banks that extend loans, etc., in cooperation with the Japan Bank for International Cooperation (JBIC).

Overseas Untied Loan Insurance
Insurance for loan or bond purchase for overseas business or projects
This insurance covers losses incurred by Japanesecompanies and commercial banks* that provide a foreign
government or company with business funds for overseas
projects that contribute to economic development, or thatpurchase bonds issued by a foreign government or company

for the purpose of financing, if they are unable to collect theloan or the bonds are not redeemed due to i ) force majeure,including war, revolution, prohibition of foreign currency
exchange, and suspension of remittance and natural disaster,or ii ) bankruptcy or default of the borrower or the bond issuer.

-0#'%,
-4#0,+#,2-0 -+.,7

4#01#1,'2#"-,
,130,!#

Unable to repay

Loan/purchase of bond

50

Annual Report FY2019

.,#1#
-+.,7-0 ,)＊

×This insurance covers losses incurred by Japanesecompanies or commercial banks that guarantee the borrowings,
etc., of overseas subsidiaries, foreign governments, orcompanies (borrowers) if they are forced to fulfill that obligation

NEXI Review of Performance

Insurance for guarantee of obligation
because borrowers fail to repay their borrowings due to i ) force
majeure, such as war, revolution, prohibition of foreign currency
exchange, suspension of remittance and natural disaster, or ii )bankruptcy or default.

×

&'$ &

Overseas United Loan
InsuranceBank

NEXI Activities

! & &!$"+ForeignCompany

Japanese
Companyor Bank＊(Overseas Subsidiary,
Joint Venture,etc.)＊ NEXI may provide coverage to foreign companies or banks, etc. that ﬁnance projects particularly needed to promote the sound development of Japan’s
external transactions (e.g., projects that promote the acquisition of important resources and the competitiveness of Japanese companies).

Insurance Products

Investment and Loan Insurance for Natural Resources and Energy
In order to fundamentally reinforce efforts to secure a stablesupply of resources from overseas, this insurance features
lower premium rates and a wider range of risk coverage thanordinary Overseas Untied Loan Insurance because of the
project risk profile. This insurance can be attached as a special
clause to Overseas Untied Loan Insurance.
The insurance covers losses incurred by JapaneseJapan

Overseas Resource Project Company
Underwrite

Off-taker

Energy andMineralResources
Production
Facility,
MiningConcession

Borrowing

Loan

Subordinated
Loan

Senior loan special clause

Shareholder’sEquityOverseas Untied
Loan Insurance

Escrow Account at a Bankin Developed Countries

JapaneseBank

FY2019 Financial Results

Proceeds
from resource sales

About NEXI and
Organizational OperationJapan

companies or banks that provide foreign governments orcompanies with business funds for projects which contributeto resource development if they are unable to collect the loan
due to i ) force majeure, such as war, revolution, prohibitionof foreign currency exchange, suspension of remittance andnatural disaster, or ii ) bankruptcy and default of a borrower.

RepaymentThis is for senior loans offered by Japanese banks or ﬁnancial institutions for activities involving Japanese companies: transactions
related to the acquisition of energy and mineral resources and of interests, and infrastructure development projects in the sector.＊＊The insurance can be applied to not only the transactions where Japan is the ﬁnal destination of the offtake of energy and mineral resources, but also thetransactions where such energy and mineral resources can be supplied to Japan according to the demand.

A lower premium rate compared to Overseas Untied Loan Insurance is applicable only when an escrow account is opened with abank in a developed country. Unless the condition is met, the rate of Overseas Untied Loan Insurance will be applied, but a higher
percentage of commercial risk coverage (97.5%) will be granted.

Annual Report FY2019

51

Insurance Products

Insurance Products to Support Your Business
Loan Insurance for Green Innovation
As a special clause to Buyer’s Credit Insurance or Overseas
Untied Loan Insurance, this insurance provides a higher
percentage of commercial risk coverage (97.5%) than regularloan insurances. The insurance is available to projects
related to the renewable energies and energy conservation
businesses, as well as to those which utilize new technologies

contributing to environmental sustainability.
Use of this insurance requires Japanese companies that will
undertake the projects and financial institutions to proactively
disclose information on environmental conservation and theirclimate change measures.

Overseas Investment Insurance
Insurance for investment (equity investment, etc.)
This insurance covers losses incurred by Japanesecompanies with a subsidiary or a joint venture in a foreigncountry if the subsidiary or joint venture is forced to discontinue
business due to force majeure such as war, terrorism and4#01#1,4#12+#,2
,130,!#

Investment

.,#1#-+.,7natural disaster. The insurance also covers losses incurred
when overseas subsidiaries are unable to remit dividends
to Japan due to prohibition of foreign currency exchange orsuspension of remittance.

×-0#'%,-+.,7
4#01#13 1'"'07-',2#,230##2!

Unable to remit

activities
×Business
discontinued, etc.
＊ NEXI can provide coverage for premium (goodwill, etc.) paid by an investor to secure a stake in natural resources or to become a shareholder.

When a subsidiary of a Japanese company establishes subsubsidiaries in a number of countries, this insurance covers
losses if one sub-subsidiary is forced to discontinue business4#01#1,4#12+#,2,130,!#

due to force majeure such as war, terrorism and natural
disaster, even if the other sub-subsidiaries are able to continue
business.

-3,207

-3,207
Investment

4#01#1,4#12+#,2,130,!#

3 
13 1'"'07×
3 1'"'07-3,207

Investment

.,#1#-+.,752

Annual Report FY2019

Investment

3 
13 1'"'07

activities
×Business
discontinued, etc.

4#01#1,4#12+#,2,130,!#

is forced to discontinue business due to force majeure suchas war, terrorism and natural disaster, even if the other subsubsidiaries are able to continue business.

NEXI Review of Performance

When a subsidiary of a Japanese company in a foreigncountry establishes a number of sub-subsidiaries in the same
country, this insurance covers losses if one sub-subsidiary-3,207Investment

3 1'"'07

×

activities
×Business
discontinued, etc.

NEXI Activities

4#01#1,4#12+#,2,130,!#

3 
13 1'"'07

Investment

Investment

3 
13 1'"'07.,#1#-+.,7

In addition to the above mentioned Overseas Investment
Insurance, which mainly covers equity investments, there isanother type of Overseas Investment Insurance that covers
rights and acquired proﬁts (real estate, etc.).
Insurance Products

Fronting
For export, intermediary trade, etc., that involve an overseas
Japanese subsidiary in Singapore, Hong Kong, Thailand,
Vietnam, or the U.K. to a buyer, claim limit amount is set for
one insurable year, and this primarily covers losses resulting

from inablity to collect receivables because the buyer goesbankrupt or payment is delayed.
NEXI provides the coverage through reinsurance with anoverseas Japanese non-life insurance company.

About NEXI and
Organizational Operation

Singapore, Hong Kong, Thailand, UK, Vietnam

Japanese
Company

Investment

Overseas
Subsidiary

Buyer
Sales contract

Insurance contract

FY2019 Financial Results

Reinsurance
contract

JapaneseCasualty
Insurance
CompanyCountry B

Export contract / Intermediary trade

Buyer

Annual Report FY201953

Insurance Products

Insurance Application Process
Applying for insurance
Application process for Export Credit Insurance has the following steps.

Registration is required for aﬁrst-time user of Insurance to obtainan insurance user code (shippercode).

Consideration of use of
insurance

Insurance User (Shipperr)
Registration

Presentation of Insurance
quotesAnnual Report FY2019

Buyer credit review /Credit rating registration

54

Registered

Please allow yourself enoughtime for your application process.
Also, note that our screening
procedures for loan agreements
and overseas investments with amaturity of two years or moreneed certain period of time, andwe recommend you consult withus at an early stage of yourpro jects .

Unregistered

Buyer registration

Insurance user (shipper)
registration

Prior consultation

Prior Consultation

Buyer Registration
Registration of yourtransaction counterpar ty(c o u n te r p a r t y to e x p o r tcontract or payer including
an ILC bank) is required,prior to the application forour insurance.

NEXI Review of Performance
NEXI Activities

Policy period
Coverage forpre-shipment risks

Insurance Products

Post-shipment
periodPayment due date /Policy expiration datePre-shipment
periodDate of shipment

Policy effective dateInsurance application date /Insurance contract date

Export contract date

Elimination
period(5 days)

Coverage fornon-payment risks

About NEXI and
Organizational Operation

Application Period
You need to apply for insurance
within ﬁve business days from theshipping date.

FY2019 Financial Results

For more details or assistance, please contact us.
Underwriting Department, NEXI head officeBusiness Development Group
Toll-Free 0120-671-094
Trade Credit Insurance Underwriting Group I
Toll-Free 0120-675-094
Osaka Branch
Underwriting Group

Toll-Free 0120-649-818

Further information on insurance application isavailable on our website at: https://www.nexi.go.jp

Annual Report FY2019

55

Insurance Products

Insurance Application Process
Insurance claim payment
Insurance claim process has the following steps.

Delegation of Authority to Exercise Rights
When submitting insurance claims, the insured needs todelegate to NEXI the authority to exercise all rights as creditor
under the export contract.

Loss mitigation obligation

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

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

Deadline for insurance claim

Delegation of authority to NEXI

Insurance claim

Deadline for notice ofoccurrence of losses

Date of occurrence of
insured event

Occurrence of event that
may lead to loss

Insurance contract date

Notice of event that may
lead to loss

Claim
payment

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

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

56

Annual Report FY2019

NEXI Review of Performance
NEXI Activities

Maximum

SmoothEffective

Ensuring recovery
throughg various measuress

Distribution of recoveries

Insurance Products

Recovery phase

Termination ofrecovery activity

Determination of appropriate recovery strategy
After insurance claim is made by the insured, recovery strategy will be made by NEXI.

Parties to conduct actual recovery
NEXI partner collection agencies●

Insured●NEXI and the Japanese government (through negotiations with debtor countries at the Paris Club, etc.)

About NEXI and
Organizational Operation●

Obligation for the insured (NEXI’s customerr) to cooperate inrecovery efforts●

When instructed by NEXI to take necessary measures for recovery, the insured has an obligation tocomply with the instructions. (Cooperation for recovery)●

Even in cases where actual recovery activities are conducted by NEXI partner collection agencies, NEXI
may request the insured to cooperate in the recovery efforts.
FY2019 Financial Results

For details on insurance claim,
please contact us
Asset Management Department
Toll-Free 0120-673-094
Claims Service Group
03-3512-7663
Recovery Group
03-3512-7658

Annual Report FY2019

57

TOPICS

Organization for Economic Cooperation and Development (OECD)

Working Party on Export Credits and Credit Guarantees(ECG Meeting and Participants Meeting)
The OECD was established in 1961 to discuss various global economic issues, and Japan has been a member
since April 1964. The Working Party on Export Credits and Credit Guarantees (ECG), a subordinate organization of
the OECD Trade Committee, exchanges information and discusses issues related to ofﬁcial export credits, including
Export Credit Insurance and Buyer’s Credit Insurance provided by NEXI. As a Japanese export credit agency (ECA),NEXI actively participates in the discussions in cooperation with concerned Japanese government agencies such as
METI.
In addition to discussions on ﬁnancial terms and conditions for ofﬁcially supported export credits, the ECG has
also focused on the responsibility of ECAs for social issues such as the environment, climate change, anti-bribery,and sustainable lending.

Arrangement on Officially Supported Export Credits
The ﬁnancial terms and conditions for export credits are set out in the OECD’s Arrangement on Ofﬁcially Supported
Export Credits to provide a framework for the orderly use of export credit and to foster a level playing ﬁeld. The
Arrangement prescribes common terms and conditions, such as minimum premium rates, down payments,
maximum repayment terms, minimum interest rates, and repayment terms, when ECAs provide export credit. In
addition to the Arrangement, sector-specific terms reflecting the characteristics of each sector may be applied
to projects related to ships, nuclear power plants, civil aircraft, coal-ﬁred electricity generation, rail infrastructure,
renewable energy, climate change mitigation and adaptation, and water as well as Project Finance. NEXI provides
export credits in line with the Arrangement.

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

Anti-bribery Measures
Based on the Convention on Combating Bribery of Foreign Public Ofﬁcials in International Business Transactions
adopted in 1997 and the OECD Council Recommendation on Bribery and Officially Supported Export Credits
in 2006, which was created to combat bribery in ofﬁcially supported export credits, NEXI has taken appropriate
measures against bribery in international business. In March 2019, the Recommendation was revised, and NEXI isstrengthening its efforts based on the revisions.

58

Annual Report FY2019

About NEXI and
Organizational Operation
Profile of NEXI

60

Business Plan

62

Business Operation and Management System

64

Organization Chart

66

Access Map

67

TOPICS

68

About NEXI and Organizational Operation

Profile of NEXI
Organization Name

Nippon Export and Investment Insurance

Date of Establishment

April 1, 2017

Act

Trade and Investment Insurance Act

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

Competent Minister

The Minister of Economy, Trade and Industry

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

Executive Ofﬁcers

Chairman and CEO

Atsuo Kuroda

President

Masafumi Nakada

Senior Managing Executive Ofﬁcer, Member of Board

Keiji Wada

Senior Managing Executive Ofﬁcer, Member of Board

Hidenobu Teramura

Member of Board

Hideo Teramoto

Audit & Supervisory Board Member (Full-Time)

Keishi Nakamura

Audit & Supervisory Board Member

Akio Otsuka

Audit & Supervisory Board Member

Tomoyo Matsui

Number of Employees

210 (as of April 1, 2020)

Scope of Business

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

Brief History

Jul. 1999

Enactment of Act on General Rules for Incorporated Administrative Agency

Dec. 1999

Enactment of Act Revising a Section of the Trade and Investment Insurance Act
Establishment of Nippon Export and Investment Insurance (NEXI) as an Incorporated

Apr. 2001

Administrative Agency
Jul. 2015
Apr. 2017

Enactment of Act Revising a Section of the Trade and Investment Insurance Act
Establishment of Nippon Export and Investment Insurance (“new” NEXI) as a
special stock company(Note: From 1950 through 2001, the trade and investment insurance was handled by the Ministry of Economy, Trade andIndustry, the former Ministry of International Trade and Industry)Ofﬁces(Domestic) Tokyo Head Office, Osaka Branch(Overseas) Singapore Branch, Paris Representative office, New York Representative office60

Annual Report FY2019

NEXI Review of Performance

Executive Officers

NEXI Activities
Insurance Products

Back row: Hidenobu Teramura (Senior Managing Executive Ofﬁcer, Member of Board), Hideo Teramoto (Member of Board)
Front row: Masafumi Nakada (President), Atsuo Kuroda (Chairman and CEO), Keiji Wada (Senior Managing Executive
Ofﬁcer, Member of Board)
About NEXI and
Organizational Operation

FY2019 Financial Results

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

Annual Report FY2019

61

About NEXI and Organizational Operation

Business Plan
Medium-term Business Plan ( FY2019 - 21)
In pursuit of the actualization of our corporate philosophies, the medium-term business plan
( FY2019 - FY2021) has been formulated based on the following four pillars of action.

Four pillars of action:
1. Improve the quality of our service and provide security that a larger number of clients need.
2. Contribute to the realization of state policies.
3. Create a more attractive working environment.
4. Enhance the company’s operating foundation for long-term stable insurance business.

Medium-term Business Plan ( FY2019 - 21)
1. Improve the quality of our service and provide
security that a larger number of clients need.
1 ) Grasp client needs for Comprehensive Export Credit
Insurance and continue to review our products andservices in order to ensure the regular use of insurance
products by existing clients.
2 ) Encourage the continued use of Export Credit Insurance
including S/C among existing clients, and promote theinsurance to exporters who have not yet used it.
3 ) Expand the scope of companies that make use ofOverseas Investment Insurance by creating a mechanism
to promote cooperation with private non-life insurancecompanies, and extending sales tools.
4 ) Develop loan insurance products and revise related
systems while taking into consideration market needsin order to push infrastructure exports by Japanesecompanies.
5 ) Enhance clients’ satisfaction with the process claim
payments.

62

2. Contribute to the realization of state policies.
1 ) Develop insurance products that meet the needs of themarket and revise product-related systems in order topromote infrastructure exports by Japanese companies.
2 ) Support important business projects which are related
to national policies such as infrastructure development
programs, through actively providing insurance for them.
a ) Business projects with high political importance,
which are related to the government’s policies:
Exports of Japan’s high quality infrastructure /Participation in overseas business projects.
Securing a stable supply of natural resources,
energy and food.
Exports of advanced environmental and safety
technologies / Participation in overseas projects
that contribute to greater energy efﬁciency and abetter environment.

6 ) Provide clients with easy-to-understand information in an
effective manner via the company website.

Exports of high-quality products developed withJapanese companies’ technological excellence
and related services / Participation in overseas
business.

7 ) Improve the quality of our client services by performing
the PDCA cycle based on client feedback throughquestionnaires.

b ) Projects that can make major contributions
to strategic overseas expansion of Japanesecompanies.

Annual Report FY20193 ) Provide greater support for international transactions ofJapanese SMEs and their exports of agricultural, forestry,
and ﬁshery products.

1 ) Increase employee awareness of the corporate
philosophies and basic behavior guidelines throughpersonnel trainings.
2 ) Offer more opportunities for our employees to exercise
their full potentials in jobs by increasing occasions for
temporary transfers outside the company and businesstrainings.
3 ) Realize a working environment that offer various options
in work style by promoting telecommuting.

4. Enhance the company’s operating foundation
for long-terms stable insurance business.
1 ) Newly develop an internal IT system with the aim ofreplacing the current one during FY2021, while reinforcing
our IT system department.

4 ) Further increase the precision of buyer credit ratings andrealize more detailed and accurate settings of credit limit
in accordance with credit status of each buyer.
5 ) Regarding country risk, improve our skills of information
gathering and analysis while strengthening relatedmonitoring, and appropriately reflect new changes
happened in the international situation into reviewing ourunderwriting policies/examinations.
6 ) Formulate a medium-term employment plan with theaim of increasing the number of personnel to 200 or so,
giving consideration to the age structure and conduct
systematic recruitments along with the plan. Also,establish and implement personnel development plan
especially for PF staff who would play leading roles in theformation stage of business projects, and those working
in IT systems, risk control including ceding insurance
risks to another export credit agency/organization, fundmanagement and environmental assessment.
7 ) Enhance our fund management system by starting aphased implementation of unifying fund-related divisions
and systems that are responsible for asset liability
management including conducting valuation of asset sidetaking the market risk into account.
8 ) Achieve an 18.9% recovery rate by FY2021, on the
major transactions that we need to conduct collection ofreceivables.

About NEXI and
Organizational Operation

2 ) Enhance sophisticated level of risk measurements.
Based on the results of quantitative analysis, promote
discussions on the management level to establish aframework to incorporate measurement results into ourpolicy to countries, debtors and sectors which have been
anticipated of having risk concentrations. In addition,3 ) Create a more systematic mechanism to conduct
qualitative risk management and continuously promote
the autonomous implementation of PDCA cycle.

Insurance Products4 ) I m p ro v e t h e c u r re n t w o r k e n v i ro n m e n t t h ro u g himplementing the PDCA cycle based on employeequestionnaire feedback.

develop assessment standards to be able to appropriately
judge insurance underwriting conditions including amountand shares that can be covered by the insurance, basedon results of risk analysis from the early stage of insurance
consultation.

NEXI Activities

3. Create a more attractive working environment.

NEXI Review of Performancec) Collaboration projects with other countries/public
international organizations, which have a signiﬁcant
importance at the international level, or businessprojects that would allow us to improve internationalrecognition of NEXI and to establish collaborative
relationships with other institutions.

Note 1: Number of regular employees including assigned staff excluding
those from IT Systems Division.

FY2019 Financial Results

Annual Report FY2019

63

About NEXI and Organizational Operation

Business Operation and Management System
Corporate GovernanceSupervision, Evaluation and Business
Execution
By establishing not only bodies such as the Board of Directors
and the Audit & Supervisory Board in compliance with theCompanies Act but also the Evaluation Committee, Corporate
Management Committee, Corporate Governance Committee
and Advisory Group, NEXI is working to achieve various goals
including strengthening the supervision and evaluation of theBoard of Directors and other bodies and enhancing businessexecution agility.

Independent
Accounting Auditor

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

Board of Directors
Advisory Group(Risk/Cash Management)

Evaluation Committee
The Evaluation Committee consists of outside experts andthe outside director. This committee evaluates and advises on
the operation and management state of NEXI as well as issues
regarding NEXI’s management that the Board of Directors
consults with the committee on.

General Meeting of
Shareholders
Audit & Supervisory
Board

based on various laws and regulations such as the Companies
Act and the Articles of Incorporation. The Audit & Supervisory
Board consists of three corporate auditors, two of whom areoutside corporate auditors as stipulated in the Companies Act.
In collaboration with the full-time corporate auditor, the outside
corporate auditors audit the execution of duties of the directors
from an outside perspective and contribute to improving thegovernance structure at NEXI. In addition, we have createdan Audit Secretariat to assist the corporate auditors with theirduties.

Evaluation Committee

Corporate Governance Committee
The Corporate Governance Committee, which is a deliberative
body composed of executive ofﬁcers and others, deliberates onimportant issues concerning corporate governance and internal
control of the company.

Chairman & CEO

Internal Audit Group
Corporate Management
Committee
Corporate GovernanceCommittee

Advisory Group (Risk/Cash Management)
As an advisory body to the Board of Directors, the group
evaluates and advises on the risk/cash management state of
NEXI based on outside experts’ knowledge.

Government Involvement
Board of Directors
The Board of Directors makes decisions on importantmanagement issues and supervises the execution of NEXI’s
business operations. The Board of Directors consists of five
directors, one of whom is an outside director as stipulated in the
Companies Act. The outside director monitors and supervises
the execution of NEXI’s business with an outside perspective.

Audit & Supervisory Board
The Audit & Supervisory Board supervises the decisionmaking process of the directors and execution of their duties

NEXI is a 100% State-owned company that operates its
trade and investment insurance business under the control andsupervision by the competent minister, and inspection by the
Board of Audit and the competent ministry.

Internal Control Principles
In accordance with the Companies Act, NEXI’s Board of
Directors has established Internal Control Principles to ensure
proper operation of the company. Internal rules and related
systems have been created in line with those principles.

Compliance Promotion
NEXI is aware of its public mission and social responsibility
as a policy-based ﬁnancial institution engaging in the trade andinvestment insurance system and regards compliance as one

64

Annual Report FY2019

of its most important management issues in order to always
comply with laws and regulations and operate with a sense offairness. The following are related efforts:

System for Implementing and Promoting
Compliance

NEXI has established basic compliance policies so that all
executive officers and staff members (including dispatchedworkers) conduct their tasks in compliance with the applicablelaws and regulations and the Articles of Incorporation in a soundand appropriate manner.

We have created a Corporate Governance Committee as ameeting committee structure with the purpose of deliberatingon important compliance issues and monitoring the state ofcompliance.

NEXI has compiled a compliance manual that outlines basic
matters concerning compliance that should be known byexecutive ofﬁcers and staff members as well as important laws
and regulations that must be observed. The manual also provides
a comprehensive explanation on internal compliance-related rules
to help promote a better understanding of compliance issues.
Also, we strive to disseminate and thoroughly comply withcompliance rules by conducting education and awareness raising
activities related to compliance under our annual compliancepromotion program which is formulated each year.

NEXI has established a department and director in charge ofcompliance issues, responsible for improving and promoting thecompliance system and thoroughly implementing the systemamong executive ofﬁcers and staff members.
NEXI has established a reporting route in order to detect
important issues concerning compliance at an early stage
and implement necessary measures. NEXI has also createdan effective internal reporting system, which it operates
appropriately.

NEXI Activities

Having stipulated internal rules concerning confidential
information management, information security policies, and otherinformation management issues, we have created a framework
to appropriately store and manage conﬁdential information andinformation assets. NEXI strives to disseminate and thoroughly
comply with compliance rules.

NEXI Review of Performance

Awareness and Thorough Implementationof Compliance Rules

Policy Related to Antisocial Forces
NEXI does not have any relation with antisocial forces, resolutely
confronts antisocial forces as an organization, and ﬁrmly rejects
improper demands made by such forces.

Insurance Products

Risk Management

Approaches to Comprehensive
Risk Management
Insurance Underwriting Risk

Cash Management / Investment Risk
NEXI’s cash are reserves necessary for payment of future
insurance claims.

Operational Risk
We focus on reducing potential operational risks in normal
business activities, and in case of occurrence of such risks, will
aim to appropriately report and quickly respond to the situation
while taking preventive measures to handle them.
Also, events or circumstances that arise with occurrenceof risk will be reported to Corporate Governance Committee
in order to enhance the effectiveness of operational risk
management. NEXI fosters an organizational culture that values
disciplined behavior combining with the previously mentioned
compliance promotion.

System for Promoting Risk Management
FY2019 Financial Results

When underwriting insurance, NEXI conducts risk assessments
based on various data collected by our credit department,
overseas offices, and specialized research organizations, inaddition to information received by our underwriting departments
through our customers. Further, we monitor the status of debtor
countries and the creditworthiness of business counterparts andprojects, to reﬂect any detected changes in credit conditions in
our underwriting criterion.
In addition to managing credit for individual projects,
we also ascertain the risk exposure for our entire portfolio,
conduct concentration analysis and scenario analysis, and set
standard underwriting amount. In order to promote the sounddevelopment of trade and investment insurance, we maintainand expand our insurance underwriting capacity by ceding out aportion of our accumulating risk.

In order to properly pay claims in a timely and appropriatemanner, NEXI gives the greatest priority to conducting appropriate
and effective cash management while ensuring safety and certaintyof the reserves by keeping a keen eye on the market trends.

About NEXI and
Organizational Operation

As the sole specialized institution responsible for the tradeand investment insurance business in Japan, NEXI aims tocontribute to the sound development of international businessby providing security to even more customers who conduct
foreign transactions promoting efforts to implement Japan’s
growth strategy, and actively meeting the diverse needs of ourcustomers. In order to fulfill our future social roles, NEXI has
constructed the following framework to appropriately conduct
comprehensive risk management.

We report deliberation of important matters related to risk
management and monitoring results on them to Corporate
Management Committee or Corporate Governance Committee,
according to the report content.
NEXI has created an Advisory Group related to risk/cash
management.

Large-Scale Disaster Risk
With the recognition that risks arising from large-scaledisasters can be a serious risk to business, NEXI has formulated
a business continuity plan to avoid as much as possible theimpact of large-scale disasters on its business and to quickly
restore business when such disasters do occur.

Annual Report FY2019

65

About NEXI and Organizational Operation

Organization Chart

General Management andPublic Relations Group( as of April, 2020 )Personnel Group
GeneralManagement andAdministration
Department

Human Resource Development andRecruitment Group

Procurement and Administration Group
Treasury Group
Policy Contract GroupAccounting Group

Corporate Planningand Policy OfficeInternal Audit Group

Corporate
Governance
Department

Environmental
Guideline Examiner

Business Process
and IT Management
OfficeCorporate Planning andInternational Relations Group

Policy and Legal Group

Risk Management Group
Financial Management andReinsurance Group

Business Process Management Group

Audit & Supervisory Board Members
Audit & Supervisory Board

Information System Group
Project Management Group

Environmental
Guidelines Examiner
Secretariat

Audit Secretariat

Business Development Group
Trade Credit Insurance
Underwriting Group I

Evaluation Committee

Underwriting
Department

Trade Credit Insurance
Underwriting Group II
Overseas Investment Insurance
Underwriting Group I

General Meetingof Shareholders

Board ofDirectors

Chairmanand CEO

Overseas Investment Insurance
Underwriting Group II

Management Group
Advisory Group(Risk/Cash Management)

Independent Accounting Auditor

Corporate
Management
Committee

Corporate GovernanceCommittee

Structured andTrade FinanceInsurance
Department

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

Asset Management
Department

Claims Service Group
Recovery Group

Credit Analysis Group
Environment Group
Personnel Committee

Credit Department
Country Risk Analysis Group
Credit Administration Group

Osaka Branch

Underwriting Group

Singapore BranchParis Representative Office
Overseas Office
New York Representative Office66

Annual Report FY2019

About NEXI and Organizational Operation

Access Map
Singapore Branch

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

16 Rafﬂes Quay, #38-06 Hong Leong Bldg.,
Singapore 048581

NEXI Review of Performance

Head Office

Phone: +65-6429-9582 Fax: +65-6222-0481

Phone: +81 (0) 3-3512-7650
Fax: +81 (0) 3-3512-7660＊NEXI Singapore is not a licensed insurer nor insurance intermediary under
the Singapore Insurance Act.

NEXI Activities

JR Suidobashi Sta.

NEXI Singapore

NEXI
Chiyoda First Bldg.
EAST Wing

y

e.
Av

sswa

jiro
Me

Expre

.
t Ave
i Wes

olitan

ve.
san A

East
Exit

West
Exit

h
obas

Haku

Suid

op
Metr

JR Chuo Linemaru Squa
are
Kitanomaru
Squareita Sta.
Johnan Shinkin Bank

Kudanshi Ave.

Paris Representative OfficeToei Subway
Shinjuku Linec/o JETRO, 27, rue de Berri, 75008 Paris, France

Subway Jinbocho Sta.

Phone: +33 (-0) 1-4261-5879

Sendaimae
Crossing

Fax: +33 (-0) 1-4261-5049

YasukunTokyo Metro
Hanzomon Line

Insurance Products

Sunlight Bldg.

e

ne
i Li

No.5
Exit

A4
Exit

in
ita L
it

a
Toz

A2
Exit

ay M

tro

Me

Villa Fontaine
Kudanshita

Senshu Univ.

No.7 Exit

ubw

S
Toei

yo

Tok

Oh
Ohara
Bookkeeping
SchoolOsaka Branch
About NEXI and
Organizational Operation

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

NEXI Paris

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

New York Representative Office

NEXI NY

47th Street

Yodoyabashi Sta.

Mizuno46th Street

Osaka City Office

NEXI, Osaka

45th Street

Aioi Nissay Dowa Insurance
Yodoyabashi Building

44th Street

Yodoyabashi Sta.
Mizuho Bank

Keihan Line

Penn Station
Port Authority

Madison Avenue

Bank of Japan

Vanderbilt Avenue

Hanshin Expressway Loop Line

Park Avenue

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

Oye Bridge
Midosuji St.

Higobashi Sta.

Tosabori Ave,

Route 1
Osaka Metro Tanimachi Line

Osaka Metro
Midosuji Line

Yodoya Bridge

Tosabori River

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

Fifth Avenue

Dojima River

Kita-Shinchi Sta.

FY2019 Financial Results

JR Tozai Line

Osaka Metro
Nishi Umeda Sta. Yotsubashi
Line

JR

Sta

hiHigaesda Sta.
Um ta.
aS
Umed

.

ka

a
Os

c/o JETRO, 565 Fifth Avenue 4th Floor New York,NY 10017 U.S.A

43th Street

Grand
CentralTerminal

42th Street

4.5.6 42street/Lexington

B.D.F.M 42 street/6th Avenue 7 42street/5th Avenue

Annual Report FY2019

67

TOPICSNEXI PR Activities

Website ( https://www.nexi.go.jp )Various information related to trade and investment insurance is provided on the NEXI website.

TopicsInformation on changes to trade and investment insurance programs and underwriting policy by country, related
procedures, the underwriting of large-scale projects, and other information is posted on the website when available.

Web Services
With the web services, users can complete the main procedures for some of the insurance products. It is also
possible to check the content of contracts and view information on overseas trading companies via the user page.
It is necessary to register as an insurance user to have a Web ID, but registering for and using the service is free ofcharge. The service also offers insurance premium simulation.

Monthly Online Magazine e-NEXI
Available via the website, the monthly online magazine e-NEXI carries trade and investment insurance related
articles. The online magazine offers content related to trade, investment, and ﬁnancing, including feature articles by awide range of specialists and corporations broken down by topic, explanations of NEXI’s activities and projects, andeconomic and political trends in each country. If you register for the online magazine, you will receive it by email for
free each month.

Pamphlets
There are also comic bookstyle pamphlets that provide
explanations of trade andinvestment insurance programsand the various procedures. The
pamphlets can be viewed on thewebsite.

Product Outline

68

Annual Report FY2019

Use Examples

Procedures related to insured
eventsFY2019 Financial Results
FY2019 Financial Review

70

Financial Statements etc.

71

FY2019 Financial Results

FY2019 Financial Review
Overview of Financial Statements(Millions of Yen)

3rd Fiscal Year (FY2019)
Ordinary income
Underwriting income(Net premiums written)

67,95836,67836,678Subrogation income

22,090Investment income

9,178

Other ordinary income
Ordinary expenses

12
69,558Underwriting expenses

59,956(Net claims paid)

57,058(Acquisition of receivables subrogated by paying claims)(6,255)(Provision for outstanding claims)(2,389)(Provision for unearned premiums)(1,256)(Provision for contingency reserves)

13,522

Subrogation expenses

801

Investment expenses

2,807

Operating and administrative expenses

5,993

Ordinary loss

(1,600)Extraordinary income

1,600

Income before income taxes−

Total income taxes

12

Net loss(12)

Total assets

1,739,569

Net assets

794,875

Profit and Losses
NEXI’s underwritten amount in FY2019, the total amountof insurance contracts underwritten during the fiscal year (thesame applies below), decreased 6.3% year on year to JPY 5.9
trillion from around JPY 6.3 trillion. Although loan insurance
was firm, the underwritten amount fell to its lowest since thecompany was founded because export credit insurance,
which accounts for approximately 80% of overall underwriting,declined dramatically due to a falloff in comprehensive export
insurance, mainly for equipment goods, against a backdrop ofan overall contraction in the value of Japanese exports.
Premium income, the sum of direct premiums written
and inward reinsurance premiums written (the same applies

70

Annual Report FY2019

below), rose 43.5% year on year to JPY 42.13 billion fromapproximately JPY 29.36 billion. Subrogation income, primarily
consisting of recoveries, rose 88.3% year on year to JPY 22.09
billion from about JPY 11.73 billion, and investment income
grew 33.0% year on year to JPY 9.18 billion from approximate
JPY 6.90 billion. Meanwhile, due to large country risk events,
net claims paid increased 70.2% year on year to JPY
57.06 billion from about JPY 33.52 billion, and subrogation
expenses rose 105.1% year on year to JPY 800 million fromapproximately JPY 390 million. Operating and administrative
expenses totaled JPY 5.99 billion. As a result, a provision forcontingency reserves of JPY 13.52 billion was recorded.

FY2019 Financial Results

Financial Statements etc.
(Millions of Yen)

Account Title

Account Title

Amount(Liabilities)

Cash and bank deposits

1,054,592

Bank deposits

1,054,592

Securities(Millions of Yen)

Amount(Assets)

610,488

Insurance liabilities

917,894

Outstanding claims reserves

84

Underwriting reserves

917,810

344,946

Unearned premiums

147,640

Municipal bonds

110,500

Contingency reserves

770,170

Corporate bonds

119,900

Foreign securities

35,143

Income tax payable

59,008Deposits received

20,699Tangible fixed assets

607

Unearned income

2,372

Buildings

349

Accrued amount payable

2,442

Equipment and fixtures

256

Other liabilities

Intangible fixed assets
Software
Software in progress
Other assets
Accrued premiums
Reinsurance accounts receivable

2

32

619

Provision for employees’ bonuses

120

1,699

Provision for directors’ bonuses

9

1,132

Provision for employees’ retirement benefits

495

567

Provision for directors’ retirement benefits

12

13,062

Total liabilities

2,360(Net assets)

14
1,033

Accounts receivable

5,081

Accrued income

3,772

Deposits

513

Other assets

289

Deferred tax assets

113

1,739,569

944,694

Capital169,352

Capital surplus

625,553

Legal capital surplus

625,553(31)

Retained earnings(31)

Other retained earnings
Retained earnings brought forward(31)

Total shareholders’ equity

794,875

Total net assets

794,875

Total liabilities and net assets

About NEXI and
Organizational Operation

Foreign reinsurance accounts receivable

Total assets

26,163

Insurance Products

Other tangible fixed assets

Other liabilities

NEXI Activities

Government bonds

Receivables subrogated by paying claims

NEXI Review of Performance

Balance Sheet (As of March 31, 2020)

1,739,569

FY2019 Financial Results

Annual Report FY2019

71

FY2019 Financial Results

Financial Statements etc.
Notes:
Significant accounting policies are as follows.
(1) Valuation of securities: Bonds held to maturity are recorded atamortized cost (straight-line depreciation method).
(2) Depreciation of tangible fixed assets is calculated using thestraight-line method.
(3) Depreciation of intangible ﬁxed assets is calculated using thestraight-line method. Software for internal use is depreciatedbased on the straight-line method over the period of internaluse (ﬁve years).
(4) Foreign-currency receivables and payables are converted
into Japanese yen at ﬁscal year-end exchange rates, andconversion adjustments are recorded as proﬁt or loss.
(5) Provision for employees’ bonuses is recognized for the paymentof employees’ bonuses, based on the expected amount to be
paid at the end of the year.
(6) Provision for directors’ bonuses is recognized for the payment
of directors’ bonuses, based on the expected amount to be
paid at the end of the year.

c. Risk management for financial instruments[1] Country risk management
In concluding insurance contracts that could cause
the acquisition of receivables subrogated by paying
claims, NEXI’s Country Risk Analysis Group conducts risk
assessment by gathering information through the Berne
Union and the OECD and by researching and evaluating
country risk.
[2] Credit risk management
For the credit risk management of export contract
counterparties (overseas buyers), the Credit Administration
Group conducts credit check and assessment of overseas
buyers.
[3] Market risk management
Regarding the fluctuation risks of interest rates, prices,and exchange rates associated with investments insecurities and time deposits, NEXI manages those risks
in line with the fund management plans discussed by the
Board of Directors. The current state of managing theserisks is ascertained and controlled, and related reports are
submitted to the Board of Directors.
d. Supplementary information on fair value of financial
instruments
The fair value of ﬁnancial instruments is calculated based onquoted market prices and in a rational method when market
prices are not available. Such fair values are measured undercertain assumptions, and therefore they may differ under otherassumptions.

(7) Provision for employees’ retirement benefits is recognizedin preparation for the payment of employees’ retirement
allowance, based on the projected retirement beneﬁt obligation
at the end of the year. Retirement benefit obligation andretirement benefit expense are calculated based on thesimpliﬁed method whereby the requested amount to be paid atthe end of the year for voluntary retirement of all employees isregarded as the company’s beneﬁt obligation.

(2) Fair value of financial instruments(8) Provision for directors’ retirement benefits is recognized in
preparation for the payment of directors’ retirement allowanceas the requested amount to be paid at the end of the year, in
accordance with the internal regulations.

The table below describes carrying amounts shown on thebalance sheet, fair value and differences of ﬁnancial instruments asof the end of the year, excluding instruments for which fair value
cannot be measured reliably. (Refer to Note 2.)(Millions of Yen)

(9) Contingency reserves are recognized in preparation for thepayment of large insurance claims due to political risks or otherreasons, in accordance with Article 22 of the Trade Insurance
and Investment Act.
(10) Consumption tax and local consumption taxes are accounted
for by the tax-excluded method.

Significant components of deferred tax assets include
the disallowance of provision for employees’ bonuses,
provision for employees’ retirement benefits, and of
unpaid business taxes, while the main component ofdeferred tax liabilities is retirement benefits liabilities
translation adjustments.

Carrying
amount shown Fair value
on balance
sheet(1) Cash and bank deposits

Financial instruments.
a. Policy on financial instruments
NEXI is engaged in the trade and investment insurance
business. Some of its surplus is invested in securities tostrengthen NEXI’s ﬁnancial base. In addition, the surplus fromthe trade and investment insurance business is invested insecurities, deposits, and other financial instruments to theextent stipulated in Article 29 of the Trade Insurance andInvestment Act.
b. Financial instruments and risk
Receivables subrogated by paying claims are exposed tothe credit risk of debtor countries or debtors. Securities are
exposed to the ﬂuctuation risks of interest rates and of market
prices.

72

Annual Report FY2019−(2) Securities

610,488656,279

45,791

Bonds held to maturity

610,488656,279

45,791

17,884

17,884−−(3) Receivables subrogated by paying
claims (commercial risk)
Receivables subrogated by paying claims
Allowance for doubtful accounts＊(Net)(4) Accrued premiums(1) Status

1,033,905 1,033,905

Difference

Assets

−−17,884

17,884

−

2,360

2,360

−

1,664,638 1,710,429

45,791(5) Deposits received

12

12

−

Liabilities

12

12

−

＊Allowance for doubtful accounts associated with receivables subrogatedby paying claims is deducted.

Note 1. Valuation method for financial instruments and items
on securities and other instruments(1) Cash and bank deposits
The book value is deemed as the fair value, since it isscheduled to be settled in a short period of time and the bookvalue approximates the fair value.

(Millions of Yen)

Carrying amountshown onFair value Difference
balance sheet

Type

Note 3. Maturity analysis of financial assets(Millions of Yen)

Cash and bankdeposits

Within 1
year

Over 1 to
3 years

Over 3 to
5 years

Over 5 to
10 years

Over 10 to Over 20 Undeteryears mined＊1
20 years

1,033,905

−

−

−

−

−

20,687

7,999

27,421

125,788

254,300

188,500−−

Securities
Bonds held tomaturity
Accruedpremiums

2,360

−

−

−

−

−

−

1,044,265

27,421

125,788

254,300

188,500−

20,687

Those with fairvalue exceeding
the carrying
amountGovernment
and municipal
bonds

396,956

Those withfair value notexceeding thecarrying amountGovernment
and municipal
bonds

213,532

212,527(1,005)

610,488656,279

45,791

Accumulated depreciation of tangible fixed assets is
JPY 436 million.

(3) Receivables subrogated by paying claims (commercial risk)
The book value shown on the balance sheet as of the end of
the year less allowance for doubtful accounts is deemed as thefair value, since the calculated amount approximates the fairvalue.

The breakdown of underwriting reserves at the end of
the year is as follows.

46,796＊Receivables subrogated by paying claims (commercial risk) are not given
due to the absence of redemption dates.

Note 2. Financial instruments whose fair value cannot bemeasured reliably
Financial instruments whose fair value cannot be measured
reliably are as follows.
(Millions of Yen)

Carrying amount shown on balance sheet
Cash and bank deposits

20,687

Deposits received

20,687

Carrying amount shown on balance sheet
Receivables subrogated bypaying claims (political risk)

41,123

Unearned premiums (before the deduction ofunderwriting reserves for outward reinsurance)

JPY 160,448 million

Underwriting reserves for outward reinsurance
related to the above

JPY 12,808 million

Net (a)JPY 147,640 million

Underwriting reserves for others (b)JPY 770,170 million

Total (a + b)

JPY 917,810 million

Net assets per share is JPY 52,991.65.
Total net assets, the basis for calculating net assets per share,
is JPY 794,875 million, and the full amount is related to commonshares. The number of common shares at the end of the year is
15 million.

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

JPY 41,123 million

Receivables subrogated by paying claims(commercial risk)

JPY 17,855 million

Expected receivables subrogated by paying claims(political risk)−

Expected receivables subrogated by paying claims(commercial risk)

JPY 30 million

Transferred claims
Total

FY2019 Financial Results(Millions of Yen)

Underwriting reserves

About NEXI and
Organizational Operation

Cash and bank deposits are reserves held in an account at
Banco Nacional de Cuba that the government of Cuba opened
under the name of “NEXI” (hereinafter referred to as “the Fund”),
in accordance with an agreement reached by the Japanese andCuban governments.
Deposits received represent the amount equivalent to the Fund.
This is because the use of withdrawals from the Fund is restricted
to activities including Cuban-peso denominated projects related
to the development of Cuba approved by the governments of two
countries, which means repayments made by the Fund’s users
to NEXI in Japanese yen is deemed as a partial recovery of thereceivables subrogated by paying claims (political risk).
They are not included in ( 1 ) cash and bank deposits or ( 5 )deposits received, since it is impossible to reasonably predict cash
ﬂows, and therefore it is extremely difﬁcult to measure their fairvalues.

＊1 Of cash and bank deposits, the amount accumulated in the aforementioned
Fund is included in Undetermined.

Insurance Products(4) Accrued premiums and (5) Deposits received
Regarding accrued premiums, the book value is deemed as
the fair value since it is scheduled to be settled in a short periodof time and the book value approximates the fair value.

NEXI Activities

Total

Total

443,752

NEXI Review of Performance(2) Securities
The fair value is based on the quoted price at the stock
exchange or that obtained from the financial institutions.
Regarding the bonds held to maturity, the table below describes
carrying amounts shown on the balance sheet, fair value anddifferences by type.

−
JPY 59,008 million

Amounts are rounded off to the nearest integer unit.

It is difﬁcult to measure the fair value of receivables subrogatedby paying claims, due to the absence of value based onmarket prices. Similarly, it is difﬁcult to measure the fair valuesof receivables subrogated by paying claims (political risk ) andof expected receivables subrogated by paying claims (politicalrisk), due to the difﬁculty in predicting the time and frequency ofconcluding debt rescheduling agreements and their details, suchas a grace period and debt reduction.

Annual Report FY2019

73

FY2019 Financial Results

Financial Statements etc.
Statement of Income (April 1, 2019 – March 31, 2020)(Millions of Yen)

Account Title
Ordinary income
Underwriting income
Net premiums written

67,95836,67836,678Subrogation income

22,090Investment income

9,178Interest and dividends income
Other ordinary income
Ordinary expenses

9,178
12
69,558Underwriting expenses

59,956

Net claims paid

57,058Acquisition of receivables subrogated by paying claims(6,255)

Commissions(890)

Provision for outstanding claims(2,389)Provision for underwriting reserves

12,266

Provision for unearned premiums(1,256)

Provision for contingency reserves

13,522Foreign exchange loss
Other underwriting expenses

166
0

Subrogation expenses

801

Investment expenses

2,807

Operating and administrative expenses

5,993

Ordinary loss

(1,600)Extraordinary income

1,600

Gain on government grants
Income before income taxes

74

Amount1,600−

Income taxes-current

32

Income taxes-deferred(19)

Total income taxes

12

Net loss(12)

Annual Report FY2019

(1) The breakdown of net premiums written is as follows.

Loss on bad debts (commercial risk)

JPY 250 million

Debt recovery expenses (underwritten)

JPY 114 million

Recovery expenses (inward reinsurance)

JPY 11 million
JPY 426 million
JPY 801 million

Premiums written

JPY 42,127 million

Foreign exchange loss (subrogation expenses)

Reinsurance premiums paid

(JPY 5,449 million)

Total

Total

JPY 36,678 million

NEXI Review of Performance

Subrogation expenses

Notes:

Business with related parties is as follows.

(2) The breakdown of net claims paid is as follows.

(Millions of Yen)

Insurance claims paid

JPY 57,058 million

Total

−
JPY 57,058 million(3) The breakdown of commissions is as follows.
Commissions for agencies and others

JPY 1 million

Commissions for outward reinsurance(JPY 891 million)

Total(JPY 890 million)(4) The breakdown of provision for underwriting reserves (ﬁguresin parentheses are reversal of provision) is as follows.
JPY 2,310 million

Provision for underwriting reserves foroutward reinsurance related to the above

JPY 3,565 million

Net (a)(JPY 1,256 million)

Provision for other underwriting reserves (b)JPY 13,522 million

Total (a + b)

JPY 12,266 million(5) The breakdown of interest and dividends income is asfollows.
JPY 3,119 million

Interest and dividends from securities

JPY 6,059 million

Other interest and dividends
Total

−

Ministry
Major
ofshareholder FinanceDirectly
held
100%

Trade and
Proceeds
investment
frominsurance government
administration
grants1

1,600

−

−

Transaction terms and decision policies of transaction terms, etc.
Note 1. The grants are provided to partially compensate for the impact thatdebt deduction for heavily indebted poor countries (HIPCs), etc. hason the trade and investment insurance business.
Note 2. The ﬁgure does not include consumption tax, etc.

Gain on government grants recorded as extraordinary
income refers to grants provided by the government
to partially compensate for the impact that debt
deduction for HIPCs and others has on the trade andinvestment insurance business.
Net loss per share is JPY 0.83.
Net loss for the current ﬁscal year, the basis forcalculating net income or loss per share, is JPY 12 million,
with the full amount of the loss being related to commonshares.
The average number of common shares during the ﬁscal
year was 15 million.
The diluted net loss per share is not given since there are
no dilutive shares.

About NEXI and
Organizational Operation

Interest from bank deposits

EntityInsurance Products

Provision for unearned premiums (before
the deduction of underwriting reserves foroutward reinsurance)Type

NEXI Activities

Reinsurance claims recovered

Ratio of RelationshipAmount of Account BalancevotingTransaction transactions
at end2
title
rights, etc. with partyof year

JPY 9,178 million

Amounts are rounded off to the nearest integer unit.
(6) The breakdown of subrogation income and subrogation
expenses is as follows.
Subrogation income
JPY 10,784 million

Interest from receivables subrogated bypaying claims (political risk)

JPY 3,588 million

Recovery of receivables subrogated bypaying claims (commercial risk)

JPY 1,716 million

Interest from receivables subrogated bypaying claims (commercial risk)

JPY 26 million

Recovery of transferred claims
Recovery received
Recovery received of overseas inward
reinsurance
OthersTotal

FY2019 Financial Results

Recovery of receivables subrogated bypaying claims (political risk)

JPY 93 million
JPY 5,777 million
JPY 78 million
JPY 28 million
JPY 22,090 million

Annual Report FY2019

75

FY2019 Financial Results

Financial Statements etc.
Statement of Changes in Shareholders’ Equity (April 1, 2019 – March 31, 2020)(Millions of Yen)

Shareholders’ Equity
Capital Surplus

Share Capital

Beginning balance

169,352

Retained Earnings
Other retained
earnings
Total retained
earnings

Total
shareholders’equityTotal net
assetsLegal capitalsurplus

Total capitalsurplus625,553625,553

(19)

(19)

794,887

794,887

−

(12)

(12)

(12)

(12)

Retainedearnings
brought forward

Changes during the year
Net loss
−

−

−

(12)

(12)

(12)

(12)

169,352

625,553625,553

(31)

(31)

794,875

794,875

Total change during the year
Ending balance

Notes:
Type and number of issued shares and treasury shares(Thousands of Shares)

Number of shares as Increase during theof April 1, 2019fiscal year 2019

Decrease during the Number of shares as
fiscal year 2019
of March 31, 2020

Issued shares
Common shares

15,000−−15,000Total

15,000−−15,000Note: NEXI holds no treasury shares.

Stock acquisition rights and treasury stock acquisition rights
There are no applicable matters.

Dividends
There are no applicable matters.

76

Annual Report FY2019

NEXI Review of Performance

Statement of Cash Flows (April 1, 2019 – March 31, 2020)(Millions of Yen)

Account Title

AmountCash flows from operating activities
Premiums received

40,836

Insurance claims paid

(57,050)(1)Commissions
Proceeds from collection of receivables subrogated by paying claims

33,171(5,383)

Payment for operating and administrative expenses(5,015)NEXI Activities

Payment for allocation of collection from receivables subrogated by paying claims(105)

OthersSubtotal

6,452Interest and dividend income received

12,698

Income taxed refund (paid)

48
(210)

OthersNet cash provided by (used in) operating activities

18,988Cash flows from investing activities(128,803)

Payments into time deposits

Insurance Products

Proceeds from repayment of time deposits

78,098(169,254)

Purchase of securities
Proceeds from sales and redemption of securities

3,647

Total from asset management activities(216,312)(Total from operating and asset management activities)(197,324)

Purchase of tangible fixed assets(43)

Purchase of intangible fixed assets

(881)
(0)

OthersNet cash provided by (used in) investing activities(217,237)

Cash flows from financing activities
1,600

Net cash provided by (used in) financing activities

1,600(1,160)Effect of exchange rate changes on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents(197,809)

Cash and cash equivalents at the beginning of the year

1,102,896

Cash and cash equivalents at the end of the year

Notes:Cash and cash equivalents in the statement of cash
flows comprise cash on hand, deposits that can bewithdrawn at any time, and short-term investmentsthat are readily convertible into cash and bear only
minor risks with respect to fluctuation of value with
their redemption deadline arriving within about threemonths from the acquisition date.

905,087

The reconciliation of the balance of cash and cash
equivalents at the end of the year and the amounts ofitems presented in the balance sheet is as follows.

FY2019 Financial Results

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

About NEXI and
Organizational Operation

Proceeds from government grants received(Millions of Yen)At the end of the current fiscal year
Cash and bank deposits

1,054,592

Time deposit(128,819)

Other bank deposits＊(20,687)

Cash and cash equivalents at the end of the year

905,087＊ Other bank deposits are not included in the scope of cash and cash equivalents dueto the following reason. Under the debt relief agreement between the governments ofJapan and Cuba, the Cuban government opened an account at Banco Nacional de
Cuba under the name of “NEXI.” The use of withdrawals from the account is restricted
to activities including Cuban-peso denominated projects related to the development of
Cuba approved by both governments, with the account’s users making a repayment of
the equivalent amount in Japanese yen.

Amounts are rounded off to the nearest unit.

Annual Report FY2019

77

FY2019 Financial Results

Financial Statements etc.
Details of account items
Balance Sheet
Account item

Details

Receivables subrogatedby paying claims

Of the rights acquired under Article 42 of the Trade and Investment Insurance Act, the item consists of receivables
subrogated by paying claims (political risk), receivables subrogated by paying claims (commercial risk), expected
receivables subrogated by paying claims (political risk), expected receivables subrogated by paying claims(commercial risk) and transferred claims.

Accrued premiums

Accrued premiums associated with insurance application.

Reinsurance accounts
receivable

The accrued portion associated with underwriting insurance with Japanese insurance companies.

Foreign reinsurance
accounts receivable

The accrued portion and portion of advancement payments associated with underwriting insurance andreinsurance with overseas insurance companies.

Accrued income

Total amount of accrued interests from securities and receivables subrogated by paying claims (political risk) at theend of the fiscal year.

Outstanding claims
reserves

The amount needed to pay claims that are already made but not yet recorded as expenses or that are not yet
made but the occurrence of events is already notified (excluding notification of the delay in the performance ofobligations).

Unearned premiums

Of premiums written, the amount equivalent to liabilities to cover the remaining period of coverage at the end of the
fiscal year, specified in insurance contracts and others.

Contingency reserves

The amount to prepare for possible future risks, in order to ensure the fulfillment of obligations based on insurance
contracts and others.

Statement of Income
Account item

78

Details

Net premiums written

Direct premiums written adjusted by reinsurance premiums, with inward reinsurance premiums added and outward
reinsurance premiums deducted.

Subrogation income(expenses)

The item includes profit from recovery of receivables subrogated by paying claims, interest income, foreignexchange profit or loss, and loss on bad debts.

Investment income(expenses)

The item includes interests from financial assets such as bank deposits and securities, investment income such as
dividends, foreign exchange profit or loss, and gain or loss on sales.

Net claims paid

Claims paid less reinsurance claims collected.

Acquisition of receivables
subrogated by paying
claimsValue at the time of recognition of acquiring receivables subrogated by paying claims (excluding transferred claims).

Commissions

The item includes commissions for outward reinsurance, agencies, and others.

Gain on government grants

Grants received, related to matters including debt forgiveness deemed necessary to fulfill international obligations
under Article 36 of the Trade and Investment Insurance Act.

Annual Report FY2019

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

Inquiries
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Corporate Planning and Policy Office
Phone : +81-(0)3-3512-7665 Fax : +81-(0)3-3512-7688
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