Annual Report FY2012

About NEXI
Since its establishment in April 2001, Nippon Export and Investment Insurance (NEXI) has been
providing export and investment insurance to protect Japanese businesses from risks involvedin overseas transactions that cannot be covered by private-sector insurance. We provide
reassurance and support to Japanese companies by anticipating changes in the market at all
times, appropriately responding to customer needs, and eﬃciently and eﬀectively conducting
insurance business so that they may engage in international transactions with peace of mind
and without fear of uncertain risks.

By implementing our customer-ﬁrst policy,
NEXI will continue to:(i) Improve the quality of our service;(ii) Broaden the range of risk coverage;(iii) Promote eﬃcient operations; and(iv) Increase management transparency.

CONTENTS
2

Message from the Chairman

252012 Financial Results

32012 Business Overview

31

Fourth-Term Objectives

9

2012 Performance Highlights

33

Customer Service Charter

15

Review of Performance

35

Profile of NEXI

19

Underwritten Projects
Regarding figures in this Annual Report1

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 a result 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 unless otherwise
noted.

Message from the Chairman

In presenting this annual report for fiscal year 2012, I would like toexpress our sincerest gratitude for your support and cooperation for
Nippon Export and Investment Insurance (NEXI).
In FY2012, the world economy was still suffering from the effects of the
eurozone debt crisis, and financial institutions and exporters in the US
and Europe faced a difficult situation. On the other hand, Japanesecompanies showed an even stronger presence in trade financing andlarge-scale projects overseas. In this context, NEXI was committed toenhancing the competitiveness of Japanese companies in global markets
and securing a stable supply of Japan's energy resources. Among othermeasures, we provided insurance for such projects as an LNG project inAustralia, the largest ever NEXI-covered project in terms of insured
value, and the Intercity Express Programme in the UK, which is firstultra long-term (30 years) support project ever undertaken by NEXI.
Since its establishment in 2001, NEXI has been seeking to improveinsurance products and services by implementing a customer-first policy
at all times. In 2012, we took various steps to make effective tradeinsurance products available to more and more customers. We enhanced
our SME overseas business support network with regional banks,
reduced premium rates, broadened the scope of eligible customers, andstrengthened our fronting scheme in response to changing tradingneeds.
Although we are seeing some positive signs in the Japanese economy,
thanks partly to a weaker yen and higher stock prices, the current global
economy remains uncertain. Given the economy s ongoing globalization,
NEXI will be providing high-quality trade insurance services that satisfy
the diverse needs of Japanese companies, through the combined effortsof the public and private sectors, so that they may survive and thrive
amid global competition.
As we move forward with all of these undertakings, we appreciate yourcontinued understanding and support.

Kazuhiko Bando
Chairman and CEO
June 20132

2012 Business Overview
Enhancing NEXI s trade insurance services to meetthe various needs of even more customers
Increased support for overseas developmentof SMEs

New services in response to changing
trading needs●●

In FY2012, NEXI further supported the rapidly
growing overseas development of SMEs by
expanding a support network for SME s overseas
business with 18 regional or other banks.
The support network is intended to promote theuse and diffusion of trade insurance through a totalof 29 regional or other banks that are business
partners with SMEs. In February 2013, a network
meeting was held to offer an opportunity for mutual
information exchange among banks.

The total amount of exports and sales byoverseas Japanese subsidiaries has increased tosurpass direct exports from Japan.
In this context, NEXI has covered risks ofcollection of receivables for third country exportsof overseas Japanese subsidiaries by introducing
fronting services (arrangements in which a local
insurer s primary insurance contract is 100%
backed by NEXI s reinsurance) through Japanese
insurance companies abroad. Under reinsurance
agreements with Mitsui Sumitomo Insurance Co.,
Ltd., Tokio Marine & Nichido Fire Insurance Co.,
Ltd., and Sompo Japan Insurance Inc., NEXI
underwrote a total of 76 transactions in FY2012,
about seven times more than the previous year, inmany sectors such as machinery and chemicals.
We also developed a new fronting insurance
product to support the domestic sales of overseas
Japanese subsidiaries (available since May 2013 inThailand, Singapore and Hong Kong).

New overseas fronting service
Japan
Scene from a support network meeting for SMEs

In terms of insurance products, the Export Credit
Insurance for SMEs was fundamentally revised in
April 2012.
By reducing premium rates, increasing the claims
payment limit, and providing insurance to
middle-ranking enterprises, NEXI underwrote 435transactions in FY2012, up about 50 percent fromthe previous year. In addition, the free buyer credit
check for SMEs was continued.
NEXI is also providing support for SMEs incollaboration with Shoko Chukin Bank. Measures
include a favorable loan program that uses
NEXI-covered export receivables as collateral.
NEXI will earnestly continue to support theoverseas development of SMEs.

3

Parentcompany

Thailand, Singaporeand Hong Kong

Third
country

ExportCustomer company contract Buyer(overseas Japanese subsidiary)

Investment
Reinsurance
Insurance
contract

Local
Japanese
insurer

Domestic
sales
contract

Buyer

Buyer

Buyer

New Fronting Scheme

Enhanced support system for investment●

To meet various forms of investment by Japanesecompanies, we improved the trade insurance
system so that it covers subordinated loans as well
as reinvestment destinations.

2012 Business Overview

Establishing a global support network
Reinsurance agreements with
Asian ECAs

Reinsurance agreement with EDC of
Canada●●NEXI concludes reinsurance agreements withExport Credit Agencies (ECAs) in Asian countries/
regions to support third-country exports anddomestic transactions by the Asian subsidiaries ofJapanese companies. NEXI's reinsurance based onthese agreements enables local ECAs to cover
more risks associated with the transactions ofoverseas Japanese subsidiaries.
Currently, NEXI has reinsurance agreementswith Singapore, Malaysia, Indonesia, Thailand,
Taiwan, and Hong Kong. In April 2012, we
expanded the scope of reinsurance with Indonesia
by including domestic transactions in the coverage.
In addition, NEXI held reinsurance seminars inHong Kong, Jakarta and Bangkok to enhance local
Japanese subsidiaries understanding of this topic.

NEXI entered into a reinsurance agreement withExport Development Canada (EDC) in September
2012. Through this agreement, NEXI provides
reinsurance to EDC for exports of Canadianresources to Japan. The agreement contributes tothe stable supply of energy resources to Japan byfacilitating trade with Canada, a nation possessing
abundant supplies of oil, natural gas and coal. The
agreement also allows NEXI to provide reinsurance
to EDC concerning exports by Japanesesubsidiaries located in Canada.

Business cooperation agreementwith Bangkok Bank●

To facilitate SMEs financing for their overseas
operations, NEXI signed a business cooperationagreement in January 2013 with Bangkok Bank in
Thailand, which is one of the top recipients ofJapanese subsidiaries in the ASEAN region. The
agreement allows NEXI to provide insurance forshort-term loans extended by Bangkok Bank toJapanese SMEs subsidiaries in Thailand, which is
expected to further facilitate financing to SMEs.

Scene from the signing ceremony for the agreement with
Bangkok Bank

Reinsurance agreement and MOU
with private credit insurers●

Many Japanese subsidiaries operating overseas
use European private credit insurance; however,they are often not provided with a sufficient credit
limit due to the reduced underwriting capacity of
those insurers following the eurozone debt crisis.
Under these circumstances, NEXI sought toglobally support the business of Japanesecompanies operating overseas. Efforts here include
signing a comprehensive reinsurance agreement in
February 2013 with Euler Hermes of Germany, theworld's largest private credit insurer, and an MOU
in March 2013 to promote reinsurance cooperation
with Coface of France, the world's second largest
private credit insurer.

Scene from the signing ceremony for the MOU with Coface4Supporting strategic priority sectors
Support for exports of infrastructure
systems●

With huge demand for infrastructure expected mainly in
Asian countries, NEXI is supporting exports ofinfrastructure-related systems, including those for railways
and utilities such as electricity and water supply.
In recent years, infrastructure projects have been
becoming larger and requiring more time, while thelending environment has been changing with the credit
crunch resulting from the eurozone financial crisis andimplementation of new financial regulations such as BaselIII. Under these circumstances, NEXI has proceeded withsuch measures as securitization of NEXI-insured loans
using trustee schemes, thereby creating an environmentthat supports and facilitates loans by private banks andfinancing for Japanese companies.
Furthermore, we provide support to overseas
Japanese subsidiaries to achieve cost competitivenessby locally producing products and shipping materials
through insurance for Local Buyer s Credit (co-financewith the Japan Bank for International Cooperation or
JBIC for third-country exports and domestic sales ofoverseas Japanese subsidiaries). Our support also
includes providing insurance for loans in local
currencies, with the number of currencies eligible forcoverage now expanded to twenty.
One of the many important projects we underwrote
in FY2012 is the Intercity Express Programme in theUK, an approximately thirty-year leasing of trains withmaintenance services to a UK-based railway business
operator led by Hitachi, Ltd.

Support for the aircraft sector●

For the aircraft sector, we supported the export of
Boeing aircraft based on reinsurance cooperation
with the Export-Import Bank of the United States.
NEXI's support for export transactions of Boeing
aircraft, a considerable portion of the components
for which is supplied by Japanese manufacturers,
grew significantly in FY2012 by about 70 percent
from the previous year. NEXI thus supported boththe US-Japan joint development program and theJapanese aircraft parts industry.

Support for the marine transport sector●

Seeking to improve a difficult situation facing ship
finance that has been lingering since the financial
crisis, NEXI is working on providing Buyer's Credit
Insurance for the marine transport sector. In
FY2012, we assisted Japanese shipbuilders incompeting against China andKorea by, forexample, supporting the export of a domestically-built
bulk carrier that is one of the largest in the world.

Support for the agricultural sector●

NEXI continues to strengthen support forinvestments and loans for overseas agriculturalbusiness and to promote export of agricultural
products in order to ensure food security and foster
the growth of agriculture in Japan. In FY2012, we
supported a project for exporting plant factories
that introduces Japanese wholly-enclosed vegetable
farming technology into Mongolia, where cold
climates make it extremely difficult to growvegetables during winter.

Support for Japanese business inemerging markets●

Intercity Express Programme (Photograph courtesy of Hitachi)

Efforts to secure a stable supply ofnatural resources and energy●

Since the Great East Japan Earthquake, securing astable supply of mineral resources and energy has been
one of Japan's key policy issues. In November 2012, we
provided Overseas Untied Loan Insurance cover for
the Ichthys LNG Project in Australia, the largest
project ever underwritten by NEXI in terms of insured
value. About 70 percent of LNG exports from the
project will be delivered to Japan.
5

NEXI is supporting investments and other businessactivities by Japanese companies in high-risk
emerging markets. After a hiatus of eight years, we
resumed providing trade insurance for loans to
Myanmar in FY2012 to help Japanese companies
develop market opportunities there.
Also in Iraq, we resumed providing Export Credit
Insurance (Comprehensive) in April 2012. In addition,
we further eased the terms of cover in February
2013 and provided cover for about 50 deals in
FY2012.

2012 Business Overview

Toward an Environmentally Sustainable Society
Environmental and Social
Considerations in Trade Insurance●

To fulfill its social responsibility vis-à-vis theenvironment, NEXI established Guidelines on
Environmental and Social Considerations in Trade
Insurance. These Guidelines are based on the OECD s
Recommendation of the Council on Common
Approaches for Officially Supported Export Credits
and Environmental and Social Due Diligence (theCommon Approaches ). Based on the Guidelines,
NEXI will continue to assure that project companies
give
appropriate
environmentalandsocialconsiderations to projects to be underwritten. Morespecifically, projects are classified into three categories
based on their possible impact on the environment(i.e., Category A, B, or C in descending order of theintensity of environmental impact) using Screening
Forms submitted by exporters. For Category A, forexample, an on-site visit will be conducted.
In addition, Objection Procedures are incorporated
to ensure NEXI's compliance with the Environmental
Guidelines. An independent Environmental Guidelines
Examiner is assigned to report directly to the
Chairman.
In FY2012, environmental reviews (including
on-site visits) were implemented for 70 projects thatwere subject to Screening.

Screening results in FY2012 by category
Category B 4.3％

Category A
17.1％

Category C
78.6％

Screening results in FY2012 by region
Other 7.1％
Africa 1.4％
Oceania & Paciﬁc
Ocean countries 4.3％
Middle East 7.1％
Europe & NIS 10％
Central and South America
17.1％

Asia
52.9％

※The Middle East includes Turkey.
Central and South America includes Mexico.
Europe & NIS include Russia and Central Asia.

Support for exports of Japaneseenvironmental technologies●

NEXI is actively supporting exports of environmental
technologies, including those that reduce carbon dioxide
emissions. In FY2012, we encouraged exports ofadvanced Japanese environmental technologies by
underwriting a variety of projects. Among them wererenewable energy projects (hydropower) in Vietnam
and Colombia, the Intercity Express Programme in the
UK that is adopting railway cars with lower
environmental load, and export of Boeing aircraft that
produce less emissions due to their reduced weight.

Simpler and more efficient environmental
review procedures for insurance users●

On-site visit concerning development of a salt lake

NEXI revised a cooperation agreement onenvironmental review for a buyer s credit with JBIC in
July 2012, thus strengthening cooperation between thetwo organizations. This revision will help develop anddeepen opportunities to further share and exchange
information with JBIC, thereby facilitating ourenvironmental reviews and leading insurance users tosimpler and more efficient procedures.
6

Disseminating information to enhance better understanding oftrade and investment insurance
NEXI seminars on trade insurance●

NEXI regularly holds seminars on trade insurance
services in order to enhance customers
understanding of trade insurance and to promote
effective use of our services. Aimed mainly at
first-time users of trade insurance, these seminars
provide an outline of the trade insurance systemand explain such fundamental items as credit
control, claims payment, debt recovery, and types of
insurance. In July 2012, the seminars were held inTokyo, Osaka and Nagoya, and attended by as
many as 501 participants, which was a record high.

Scene from a debt recovery seminar

NEXI-sponsored symposium at the 2012 Annual
Meetings of the IMF and the World Bank●

Scene from a trade insurance seminar

Looking to take advantage of the opportunity
presented by Japan s hosting the Annual Meetingsof the IMF and the World Bank in October 2012, we
held a NEXI-sponsored symposium on hedging
risks involved in Japanese business development in
Asia. The seminar introduced NEXI s activities andsought to spread knowledge of the trade insurance
system, and invited experts from external
institutions and representatives of partner
institutions to discuss and provide information on
business in Asia. The symposium was attended by
301 people, approximately 91% of whom indicated ina questionnaire that they found the proceedings
highly helpful and informative.

NEXI seminars on debt recovery●

NEXI regularly holds seminars to provide
practical information about recovering overseas
debts. Guest lecturers with extensive experience indebt recovery from international law firms and ouroverseas partner servicers are invited to discussand explain with concrete examples the economic
trends and recovery processes of South Asia, theMiddle East and Europe. In FY2012, the seminar
was co-hosted by the Japan Foreign Trade Council
in February 2013 in Tokyo. It was attended by arecord 243 attendees.
Scene from a symposium

NEXI seminars with regional partner banks●

To support SMEs in cooperation with Japaneseregional banks, we held 31 workshops with
employees of those banks (948 participants in total),
and also co-sponsored 26 customer seminars (1,453
participants in total) in FY2012.
7

2012 Business Overview

Closer ties with relevant overseas organizations to deliver state-of-the-art
trade insurance services
Berne Union meetings●

The Berne Union (the International Union ofCredit and Investment Insurers) is a forum where
ECAs from numerous countries around the world,international organizations, and private insurers
discuss common issues related to export credit
insurance and investment insurance from atechnical perspective. Since the first meeting in
Berne, Switzerland, in 1934, the union s membershiphas grown to 49 institutions in total as of April 2013.
The union holds regular biannual meetings; the2012 spring meeting was held in April in Brussels
and the autumn meeting was held in October in
Stockholm.

Bilateral meetings●

NEXI holds annual bilateral meetings with ECAs
and government officials of Austria, Korea, China,
Germany and France, respectively. During themeetings, attendees exchange information andhonest views about a wide range of topics, includinginternational financial situations, each country s
activities, potential country risks, and projects
supported by the institutions of both sides.
Through these regular meetings, relations arefurther strengthened and information on tradeinsurance trends in each country is shared between
NEXI and its partner institutions.

G11 meeting●

The G11 meeting annually brings together
government officials and ECA representatives fromeleven countries, including: Brazil, Canada, China,
France, Germany, Italy, India, Japan, Russia, UK andUSA. The latest G11 meeting was held in Tokyo for
the first time in March 2013 and was hosted by
NEXI.
At the meeting, top representatives had an open
discussion about the world economic situation andtrends in trade insurance, including the OECD
Arrangement on Officially Supported Export
Credits. In addition, guest speakers were invitedfrom private financial institutions to further review
and recognize the roles expected of ECAs.
Participants took the opportunity to enhancemutual cooperation and ties by sharing common
perceptions of problems facing countries in terms oftrade finance and their solutions.

Scene from a bilateral meeting with Korea

Training program on trade insurance for Asian
ECA professional staff●

The Ministry of Economy, Trade and Industry ofJapan invites ECA staff members and relevant
government officials in countries where tradeinsurance systems are in a developmental stage totraining held under its Program for the Facilitationof Cooperation on Trade Insurance. Lectures areprovided by the NEXI staff. In FY2012, participants
were invited from eight countries, including Brazil,
India, Indonesia, Myanmar, Russia, Taiwan,
Thailand, and Vietnam. Moreover, a special guest
lecturer was also invited from SACE, the Italian
ECA, to offer a program that enables participants
to learn about efforts and activities by not only
Japan but also European ECAs.

Scene from the G11 meeting

Scene from a training program for Asian ECAs

8

2012 Performance Highlights
Economic Trends
Japanese exports decreased for the second consecutive year in FY2012, by 2.1% to about JPY 63.9 trillion, mainly
due to weaker exports of ships, electronic components (including semiconductors), and construction and mining
machinery. Exports to Asia were about JPY 34.9 trillion (down by 3.3%), of which China decreased to about JPY
11.3 trillion (by 9.1%). Exports to the US increased to JPY 11.4 trillion (by 10.4%) while exports to the EU
decreased to about JPY 6.4 trillion (down by 14.1%).
（Japan's exports）
Total Exports
Year-on-year change(%)（Millions of yen）
FY2007

FY2008FY2009FY2010FY2011FY2012

85,113,381

71,145,593

59,007,879

67,788,838

65,288,487

63,940,544

9.9(16.4)(17.1)

14.9

(3.7)

(2.1)

（Source：Trade Statistics, Ministry of Finance）

Trends of the Trade and Investment Insurance Program
300

200

100

0

-100

Outstanding Borrowings
JPY 0 billion-200

Peak of Insurance
Claims Payments
JPY 341.9 billion

-300

-400

-500

Premium income
Recoveries and other income
Claims paid
Outstanding borrowings at year-end-600

Peak of Outstanding Borrowings
JPY 688.6 billion-700（Billions of yen）
Fiscal Year

1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Premium income 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
Recoveries andother income

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

Claims paid

37.6 62.7 80.5 141.5 164.3 169.0 109.5 164.8 142.7 198.6 341.9 148.2 128.0 80.6 57.1 44.4 30.2 16.7 21.6 32.4 49.9 65.1 23.0 12.9 3.7 2.4 3.8 17.2 10.4 8.6 8.4 4.4

Outstanding
borrowings at
year-end---- 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

Note: The amount is based on cash.

9

0

0

0

0

0

0

0

0

0

0

0

0

0

0

（Billions of yen）

2012 Performance Highlights

Underwritten AmountThe total underwritten amount in FY2012 decreased by 2.8% to about JPY 8.3 trillion compared to theprevious fiscal year.
（Fiscal Year）

2008

9.7

2009

8.2

2010

8.6

2011

8.5
8.3

2 012
0

3

6

9

12
（Trillions of yen）

Comprehensive Export
Insurance with Simpliﬁed
Procedure 0.2%

Underwritten Amount by Insurance Type

Export Bill Insurance 0.1%

In line with the decrease in exports, Export Credit Insurance

Reinsurance 1.0%

decreased by 13.5% to JPY 6.2 trillion from the previous fiscal

Buyer's Credit Insurance 1.5%

Trade Insurance forStanding Orders fromSpeciﬁc Buyer 0.1％

Overseas Investment
Insurance 6.4%

year.
On the other hand, Overseas Untied Loan Insurance increased

Overseas Untied Loan
Insurance 16.5%

by 149.4% to JPY 1.4 trillion in line with an increase inlarge-scale projects.

Export Credit Insurance
74.1%

Underwritten Amount by Region

North America 3.3％

Amount for Asia was the largest at about JPY 4 trillion or 44.9%of the total amount followed by Central America at 10.1% andSouth America at 9.9%.
The amount for Oceania accounted for 9.3% of the total amount,increasing by 460.9% compared to the previous fiscal year due
to large-scale project coverage.

International Organizations 1.9％

Africa 5.0％
Middle East 6.6％
Europe 8.9％

Asia
44.9％

Oceania 9.3％
South America 9.9％Central America 10.1％

Top Ten Countries and Regions of Underwritten Amount in FY2012（Millions of yen）

Country/Region

Underwritten amountComposition (%)

6

Korea

506,390

6.1

7

Brazil408,296

4.9

7.7

8

Vietnam

327,904

4

7.1

9

U.S.A.

246,737

3

6.3

10

Taiwan243,166

2.9Country/Region

Underwritten amountComposition (%)

1

Australia

781,434

9.4

2

Panama(ﬂag of convenience vessel)

691,758

8.3

3

China

642,642

4

Thailand586,345

5

Indonesia

519,87910

Outstanding Commitment
Total outstanidng commitment at the end of FY2012 increased by 5.4% to about JPY 12.9 trillion compared tothe previous fiscal year.
（Fiscal Year）

2008

12.1

2009

11.4

2010

11.9

2011

12.2
12.9

2 012
0

3

6

9

12

15
（Trillions of yen）

Outstanding Commitment by Insurance TypeThe outstanding commitment for Export Credit Insurance was

Reinsurance 2.6%

the largest at about JPY 8.2 trillion or 63.2% of the total amount,followed by Overseas Untied Loan Insurance at about JPY 2.2 Buyer's Credit Insurance 8.0%
trillion or 17.4%.

Trade Insurance forStanding Orders fromSpeciﬁc Buyer 0.1%

Overseas Investment
Insurance 8.7%

Overseas Untied Loan
Insurance 17.4%
Export Credit
Insurance
63.2%

Outstanding Commitment by Region
The outstanding commitment for Asia was the largest at about
JPY 5.6 trillion or 41.9% of the total amount, followed by theNorth America 2.8％

Middle East at about JPY 1.8 trillion or 13.9%.

Central America 4.6％

International
Organizations
1.5％

Africa 5.9％
South America 7.9％
Oceania 8.2％

Europe 13.3％
Middle East 13.9％

11

Asia
41.9％

2012 Performance Highlights

Premium Income
Premium income in FY2012 increased by 16.2% from the previous fiscal year to about JPY 38.8 billion.

（Fiscal Year）

2008

37.8

2009

40.2

2010

39.8

2011

33.4
38.8

2 012
0

10

20

30

40

50
（Billions of yen）

Premium Income by Insurance Type
Premium income for Overseas Untied Loan Insurance was thelargest at about JPY 17.9 billion, or 46.2% of the total amount,due to large-scale project coverage, followed by Export Credit
Insurance at about JPY 11.9 billion, or 30.8%.

Trade Insurance for Standing
Orders from Speciﬁc Buyer 0.8%

Export Bill Insurance
0.3%
Comprehensive Export
Insurance with Simpliﬁed
Procedure 0.1％

Buyer's Credit Insurance 3.9%
Reinsurance 8.3%
Overseas Investment
Insurance 9.6%

ExportCreditInsurance
30.8%

Overseas
UntiedLoan
Insurance
46.2%

Recoveries
The amount of recoveries in FY2012 increased by 35.9% from the previous fiscal year to about JPY 24 billion.
Recoveries of claims associated with commercial risk events accounted for 2% of the total recoveries, with theremaining 98% associated with political risk events such as rescheduling.

（Fiscal Year）

40.4 1.5

2008
17.5

2009

3.1

14.3 1.3

2010
2011

Political Risk Events
Commercial Risk Events

17.3 0.3

2 012

23.5 0.5
0

10

20

30

40

50
（Billions of yen）

12

Insurance Claims Paid
Claims paid in FY2012 were down by 47.2% to about JPY 4.4 billion. This was because claims paid due tocommercial risk events decreased compared to the previous fiscal year, when a large-scale commercial risk
event occurred.
（Fiscal Year）

16.9 0.3

2008
3.3

2009

7.2
4.0

2010
2011

4.6

1.3

Political Risk Events
Commercial Risk Events

7.0

2 012 0.4

4.0

0

5

10

15

20
（Billions of yen）

Insurance Claims Paid (By Region)
Amount of claims paid for African transactions was the largest at about JPY 2.3 billion or 52.0% of the total
amount, largely due to a commercial risk event concerning exports to Liberia.

Political/Commercial Risk

Political Risk

Middle East 0.1％

Asia 2.7％

Middle East 1.5％

North America 0.1％

South America 9.7％

Commercial Risk
South America 0.3％ North America 0.1％
Asia 3.0％

EuropeAfrica52.0％

Europe
35.3％

39.1％

Africa57.5％

South America
98.5％

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

Country/Region

13

Total

Commercial Risk

Political Risk

1

Liberia

2,297

0

2,297

2

Ukraine

1,165

0

1,165

3

Argentina

418

418

0

4

Italy

156

0

156

5

France

155

0

155

2012 Performance Highlights

Insured Events in FY2012 (Based on the data as of the end of May 2013)

Insured Events by Risk（ Year-on-Year Change ）Both political and commercial risk events increased in number and amount in FY2012. The reported
715 events amounted to JPY 39.6 billion in total. The political risk event increase was caused by events
in South America and the Middle East, and the commercial risk events increased due to the eurozone
crisis.
Claims payment in FY2012 amounted to about JPY 4.4 billion (59 events). Insured events increased in
number while claims paid decreased, as most of the payments in arrears were paid before insurance
claims were made.
（Millions of yen）
Type of Risks
AmountNumberAmountOccurrenceof Events Commercial Risk Events Number
Amount Total
Number Total
AmountPolitical Risk Events
NumberAmountClaims Paid Commercial Risk Events
NumberAmount Total
Number Total
Political Risk Events

FY201011,283
139
46,872285
58,154
424
3,972
52
4,603
91
8,574
143

FY2011
11,33399
3,974
133
15,307
232
1,342
15
7,017
34
8,359
49

FY2012Year-on-Year Change (%)
23,303
105.6
522
427.3
16,262
309.2
193
45.1
39,565
158.5
715
208.2
424
(68.4)
2(86.7)
3,993(43.1)
57
67.6
4,416
(47.2)
59
20.4

Note：The number and amount of insured events are based on Notice of Occurrence of Insured Risk and Notice of Occurrence ofLosses received during each fiscal year.

Changes in Amount of Insured Events and Claims Paid (FY2010 - FY2012)
Political Risk Events（Millions of yen）

2010

Commercial Risk Events（Millions of yen）

2010

Occurrence of Events
Claims Paid

2011

2012

Occurrence of Events
Claims Paid

2011

2012

0

10,000 20,000 30,000 40,000 50,000

010,000 20,000 30,000 40,000 50,000

Occurrence of Insured Events by Region
In FY2012, 98% of political risk events (in terms of amount) occurred in South America and Asia
(including the Middle East). Major causes of the events were restriction of currency exchanges due
to foreign currency quota (South America) and other events outside Japan (Middle East). Most of thecommercial risk event amount was associated with Africa (accounting for about 66%) due tooccurrence of a large-scale bankruptcy.

Amount of Insured Events by Region (FY2012)
Political Risk Events（Millions of yen） Commercial Risk Events
17,471

18,00012,00016,00012,0008,000

10,000
6,000

6,000
5,408

4,000

4,000
2,000
0

10,696

10,00014,0008,000（Millions of yen）

00

Europe North and South
Central America
America

AfricaOceania

0
Asia

2,000

424

0

2,104

Asia

1,366

1,387

707

Europe North and South
Central America
America1
AfricaOceania14

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

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

Type of Insurance

FY2008FY2009FY2010FY2011FY2012

Export Credit Insurance

8,344,955

6,231,455

7,308,903

7,110,487

6,151,894

74.1(13.5)One year or less

3,679,428

2,747,597

3,498,241

3,321,146

3,451,195

41.6

3.9

More than one year

4,665,528

3,483,858

3,810,662

3,789,341

2,700,699

32.5(28.7)

Buyer's Credit Insurance

41,33591,382

239,764

343,996

123,2901.5(64.2)

Export Bill Insurance

25,886

19,98620,19916,54912,2950.1(25.7)

0

0

0

0

0

0.0

−

345

107

0

254

1

0.0

−

281,717

213,193219,229440,367

530,106

6.4

20.4

984,806

1,606,754

741,082549,068

1,369,370

16.5

149.4

5,928

9,653

11,761

10,311

9,331

0.1

(9.5)

444

646

624

567

1,304

0.0

130.0

−

−

1,392

14,34019,1620.2

33.6

41,552

25,88539,99851,834

83,3111.0

60.7

9,726,968

8,199,062

8,582,951

8,537,772

8,300,064

100.0

(2.8)

Export Bond Insurance
Prepayment ImportInsurance
Overseas Investment
Insurance
Overseas Untied Loan
Insurance

Trade Insurance for Standing
Orders from Speciﬁc Buyer

Export Credit Insurance for
SMEs

Comprehensive Export Insurancewith Simpliﬁed Procedure

Reinsurance
Total(Note 1) The total is based on the actual underwritten amount calculated by applying the exchange rate of the date of contract, not basedon methods for responding to the exchange rate. (The same applies to the table below.)(Note 2) In accordance with the BU rules, export credit insurance with credit terms of more than one year includes figures on insurance forcapital goods, even if the credit period is one year or shorter. (The same applies hereafter)(Note 3) The floating interest coverage option in Buyer's Credit Insurance and Overseas Untied Loan Insurance is evaluated with an amountcalculated using the maximum rate (20% per annum).（The same applies to the table below)

Underwritten Amount by Region（Millions of yen）

RegionComposition(%)

Year-on-yearchange (%)

FY2008FY2009FY2010FY2011FY2012

Asia

4,437,621

3,604,106

4,506,009

4,381,676

4,003,749

44.9

(8.6)

Middle East

1,220,586

793,380

711,115

947,276

591,102

6.6(37.6)

Europe1,284,625

987,617965,790895,278795,756

8.9(11.1)

North America

617,350

842,520

302,121261,013

293,729

3.3

12.5

Central America

1,147,354

1,029,527

1,065,227

1,086,265

903,42110.1(16.8)South America

844,275

363,382

601,494

825,627

883,707

9.9

7.0

Africa739,050

526,435

469,999479,742447,219

5.0

(6.8)

Oceania

251,302463,329

580,589

148,645833,730

9.3

460.9

58,023

106,123

160,254

116,006

167,9721.9

44.8

International Organizations(Note 1) Classification used to compute the above amount: Pre-shipment: Country of the shipment consignee; Post-shipment: Country of
the payer (or country of the guarantor when guaranteed)(Note 2) The amount includes transactions that are doubly computed, i.e. for both pre-shipment (country of the consignee) andpost-shipment (country of the payer).
(Note 3) The amount is classified in International Organizations instead of regions when guaranteed by an international organization.
(Note 4) Central Asia is included in Asia. (The same applies hereafter.)(Note 5) Central and Eastern Europe and Russia are included in Europe. (The same applies hereafter.)15

Review of Performance

Outstanding Commitment (As of fiscal year end)
Outstanding Commitment by Insurance Type（Millions of yen）

Composition Year-on-yearchange (%)(%)

Type of Insurance

FY2008FY2009FY2010FY2011FY2012

Export Credit Insurance

9,336,297

7,959,765

8,184,301

8,099,696

8,167,551

63.2

0.8

One year or less

2,396,838

2,022,794

2,601,992

2,337,812

3,097,421

24.0

32.5

More than one year

6,939,458

5,936,971

5,582,309

5,761,884

5,070,13039.3(12.0)

Buyer's Credit Insurance

524,937

500,438

577,707832,267

1,032,720

8.0

24.1

6,373

4,992

5,137

3,323

3,336

0.0

0.4

0

0

0

0

0

0.0

−

345

107

0

0

0

0.0

−

809,504

790,936

776,508

944,798

1,117,154

8.7

18.2

1,247,619

2,030,689

2,155,666

2,129,124

2,241,104

17.4

5.3

10,554

11,952

16,22615,147

15,340

0.1

1.3

83

161

168

145

499

0.0

244.5

−

−

1,332

5,830

5,959

0.0

2.2

124,769

147,313

174,558

219,207

330,7852.6

50.9

12,060,482

11,446,354

11,891,603

12,249,536 12,914,446

100.0

5.4

Export Bill Insurance
Export Bond Insurance
Prepayment ImportInsurance
Overseas Investment
Insurance
Overseas Untied Loan
Insurance

Trade Insurance for Standing
Orders from Speciﬁc Buyer

Export Credit Insurance for
SMEs

Comprehensive Export Insurancewith Simpliﬁed Procedure

Reinsurance
Total(Note 1) For transactions in foreign currency, the amount is based on the exchange rate of each fiscal year-end.
(Note 2) The floating interest coverage option of Buyer's Credit Insurance is evaluated with an amount calculated using the maximum rate
(20% per annum).（The same applies to the table below)

Outstanding Commitment by Region（Millions of yen）

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

FY2008FY2009FY2010FY2011FY2012

Asia

4,852,423

4,305,435

4,826,289

5,223,394

5,591,707

41.9

7.1

Middle East

3,228,462

2,531,022

2,096,943

1,919,569

1,852,988

13.9

(3.5)

Europe1,133,428

1,237,234

1,361,156

1,563,996

1,778,936

13.3

13.7

North America

616,611

869,422840,569

651,853375,7262.8(42.4)

Central America

681,062735,762754,325

698,215

620,925

4.6(11.1)South America

788,489

750,377

675,266

824,239

1,050,016

7.9

27.4

Africa796,105

903,281864,959

890,361

788,076

5.9(11.5)

249,099

349,574

744,995

774,131

1,092,066

8.2

41.1

95,667

158,757

227,419

218,854

202,893

1.5

(7.3)

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

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

Type of Insurance

FY2008FY2009FY2010FY2011FY2012Composition (%) Year-on-year change (%)

Export Credit Insurance

17,70813,59615,157

14,074

11,94330.8(15.1)One year or less

4,786

3,866

5,754

5,462

5,025

13.0

(8.0)

More than one year

12,922

9,730

9,403

8,611

6,918

17.8

(19.7)

Buyer's Credit Insurance

1,422

1,155

6,869

3,953

1,524

3.9

(61.5)

Export Bill Insurance

221

184

185

146

111

0.3

(24.0)

Export Bond Insurance

0

0

0

0

0

0.0

−

Prepayment ImportInsurance
Overseas Investment
Insurance
Overseas Untied Loan
Insurance

3

1

0

0

0

0.0

−

2,669

2,956

2,595

3,177

3,718

9.6

17.0

14,592

21,425

13,477

10,065

17,924

46.2

78.1

196

283

399

391

321

0.8

(17.9)

5

6

6

6

12

0.0

102.4

Trade Insurance for Standing
Orders from Speciﬁc Buyer

Export Credit Insurance for
SMEs

Comprehensive Export Insurancewith Simpliﬁed Procedure

Reinsurance
Total

−

−

6

38

38

0.1

0.7

953

597

1,064

1,528

3,207

8.3

109.8

37,76940,20339,75733,37838,797

100.0

16.2

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

Type of Insurance

FY2008

Export Credit Insurance 17,124
Buyer s Credit Insurance

FY2009

Political Commercial
16,85800FY2010

Political Commercial

FY2011

Political Commercial

FY2012

Political Commercial

266 9,591

3,268

7,346

3,972

3,375 7,157

1,342

97

0

97 1,20901,209 1,165

0

187

16

0

16

34

0

0

6,323

Political Commercial

Composition(%)

Year-on-yearchange (%)(57.0)

3,079

424

2,655

69.7

1,165 1,165

0

1,165

26.4

(0.0)

34

3

0

3

0.1

(91.5)

5,815

Export Bill Insurance

31

0

31

187

0

Export Bond Insurance

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0.0

−

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0.0

−

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0.0

−

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0.0

−

4

0

4

429

0

429

1

0

1

0

0

0

168

0

168

3.8

−

0

0

0

2

0

2

3

0

3

2

0

2

0.0

(43.2)−

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

0

0

0

−

−

−

−

−

−

0

0

0

0

0

0

0

0

0

0.0

Reinsurance

0

0

0

137

0

137

0

0

0

0

0

0

0

0

0

0.0

−

17,15916,858301 10,441

3,268

7,173

8,574

3,972

4,603 8,359

1,342

7,017

4,416

424

3,993

100.0

(47.2)

Total

Insurance Claims Paid (By Region)
RegionAsia
Middle East
EuropeNorth America
Central America
South America
AfricaOceania
Total
17

FY2008

Political Commercial（Millions of yen）

FY2009

Political Commercial

FY2010

Political Commercial

FY2011

Political Commercial

FY2012

Political Commercial

Composition(%)

Year-on-yearchange (%)

235 5,971

0

48

0

0

5,624

121

0

121

2.7

(97.8)

0237

0237 1,075

11

1,064

5

5

0

6

6

0

0.1

25.0

0

7

150

0

150 1,249

0

1,249 1,262

0

1,262 1,560

0

1,560

35.3

23.6

23

13

9

38

35

3 2,119

0

2,119

0

0

0

2

0.0

15,547

15,49750 2,680

2,677

3 2,974

2,851

123

88

77

10

0

0

0

0.0

1,347

1,347

0 1,207556

651 1,084

1,084

0

974

951

23

430

418

12

9.7

(55.8)

0

0

0

0

0

0

26

26

0

407

309

99 2,297

0

2,297

52.0

464.3

1

158

0

158

0

0

0

0

0

301 10,441

3,268

7,173 8,574

3,972

4,603 8,359

1,342

235

0

0

0

7

1

0

17,15916,8585,971

48 5,624

0

2

0

0

0

0.0

7,017 4,416

424

3,993

100.0

0

(100.0)(47.2)

Review of Performance

Recoveries
Recoveries by Risk
（Millions of yen）
Composition Year-on-year(%)
change (%)

Type of Risks

FY2006

FY2007

FY2008FY2009FY2010FY2011FY2012

Political Risk

235,065

54,28440,393

17,451

14,327

17,33023,531

98.0

35.8

Commercial Risk

12,247

3,181

1,462

3,064

1,313

338

486

2.0

44.0

Total

247,31257,46541,855

20,515

15,64017,66824,017

100.0

35.9

Recoveries by Region（Millions of yen）
Composition Year-on-year(%)
change (%)

Region

FY2006

FY2007

FY2008FY2009FY2010FY2011FY2012

Asia

23,874

7,451

6,354

8,397

5,523

5,673

6,298

26.2

11.0

Middle East

2,112

2,520

1,404

1,342

1,357

3,510

8,172

34.0

132.8

Europe100,373

31,96725,349

2,515

1,028

814

1,154

4.8

41.8

North America

0

0

1

0

778

1

30

0.1 2900.0

Central America

3,051

2,483

480

571

193

510

241

1.0

(52.7)South America

35,435

6,882

2,230

1,705

1,155

1,176

1,536

6.4

30.9

Africa82,466

6,160

6,037

5,985

5,608

5,970

6,587

27.4

10.3

Oceania

0

3

1

0

0

14

0

247,31257,46541,855

20,515

15,64017,66824,017Total

0.0 (100.0)
100.0

35.9

Recoveries in FY2012● Recoveries by Risk
Recoveries for FY2012 increased by 35.9% (JPY 6.4 billion) to JPY 24 billion from the previous fiscal year s
JPY 17.6 billion.
Looking at a breakdown by type of risk, recoveries for commercial risk events accounted for about 2% (JPY
0.5 billion) of the total recoveries, and recoveries for political risk eventｓsuch as rescheduling accounted forthe remaining 98% (JPY 23.5 billion). The commercial risk event recoveries declined for two consecutive
years due to a decrease in large-scale project recoveries.

● Recoveries by Region and Country
In a breakdown by region, recoveries from the Middle East accounted for the largest share of 34%, or JPY
8.1 billion, up by 132% from the previous fiscal year. Debts of JPY 6.6 billion were recovered from Iraq and
JPY1.4 billion were recovered from Jordan.
Recoveries from Africa accounted for the second largest share (26.2%), increasing by 11% from the previous
fiscal year to JPY 6.5 billion. The amounts recovered include JPY 6.1 billion from Egypt, JPY 0.3 billion from
Libya, and JPY 60 million from Gabon.
Recoveries from Asia were JPY 6.2 billion (JPY 5.1 billion from Indonesia, JPY 1.0 billion from Myanmar, and
JPY 0.1 billion from Pakistan). Recoveries of JPY 1.5 billion were from South America (JPY 0.9 billion from
Argentina, JPY 0.3 billion from Ecuador, and JPY 0.2 billion from Chile), and recoveries from North andCentral America were JPY 0.2 billion (JPY 0.1 billion from Dominican Republic, JPY 80 million from Antigua
and Barbuda, and JPY 30 million from Canada).
As for recoveries by country, countries with the largest recoveries were Iraq, Egypt, Indonesia, Jordan, andMyanmar. These five countries accounted for about 85% of the total recoveries from 34 countries.
Recoveries from Iraq increased in this fiscal year because the country started to repay principal in July
2011.

18

Underwritten Projects
Asia
VietnamVinacomin s Bauxite Mining and Alumina Refinery Project in Lam Dong Province
Vietnam National Coal and Mineral Industries Holding Corporation Limited （Vinacomin）, Vietnam s
state-owned coal mining firm, decided to develop a bauxite mine and construct the country s first alumina
refinery in Lam Dong Province.
Citibank Japan Ltd., Mizuho Corporate Bank, Ltd., Sumitomo Mitsui Trust Bank, Limited, and The Bank ofTokyo-Mitsubishi UFJ, Ltd. agreed to provide loans of USD 300 million for this project, and NEXI provided
Overseas Untied Loan Insurance for these loans.
The annual production of alumina is expected to be about 600 to 650 thousand tons, of which Marubeni
Corporation has the right to purchase 160 to
180 thousand tons. The project will help
secure stable supply of resources forJapanese businesses by ensuring a
procurement source for alumina andproviding a long-term supply of aluminum toJapanese companies, both in Japan andoverseas.
The insurance contract was entered into in
March 2013.
Photograph courtesy：VinacominSingapore

Export of Equipment for a Desalination Plant
This is a project to export key desalination plant components from Mitsui & Co. Plant Systems, Ltd. ofJapan to Hydrochem (S) Pte Ltd of Singapore. Hydrochem is a subsidiary of Hyflux Ltd., a global
desalination plant supplier and one of the world s leading fully-integrated water solutions companies, with
operations and projects in Southeast Asia, China, India and the Middle East and North Africa.
In June 2012, Mizuho Corporate Bank, Ltd. agreed to extend a loan for the purchase of key components
for Hyflux s Tuaspring Desalination Plant in Singapore, one of Asia s largest seawater reverse osmosis
desalination plants, and NEXI provided Buyer s Credit Insurance for Mizuho s loan.
Through Mitsui, Toray Industries Inc supplied reverse osmosis (RO) membrane elements and Torishima
Pump Mfg. Co., Ltd supplied high pressure pumps. Tuaspring Desalination Plant, which will commence
operations in the third quarter of 2013, will add another 318,500 m3/day of desalinated water toSingapore s water supply. Desalinated water, together with water with local catchments, imported waterand NEWater, provide a diversified and sustainable watersupply for Singapore.
Japanese companies have a competitive advantage in thefield of water treatment membrane and high pressure
pumps for seawater desalination plants, especially in termsof energy conservation and the environment. Even as thefinancial market remains difficult, NEXI will continue toprovide financial support for exports by Japanesemanufacturers with a reputation for advanced technology.
The insurance contract was entered into in June 2012
Photograph courtesy : Hyﬂux Ltd

19

Underwritten Projects

South America
Colombia

Drummond Coal Mines Investment
ITOCHU Corporation has acquired a 20 percent stake in Colombian coal mining operations owned byDrummond Company Inc. of the US. ITOCHU and Drummond are planning to increase their current coalproduction of about 30 million tons per annum to about 35 to 40 million tons by expanding mining areas,
railways and port facilities.
NEXI provided Overseas Investment Insurance to cover ITOCHU s investment made to acquire thestake through its US subsidiary. NEXI also provided
Overseas Untied Loan Insurance to support
ITOCHU's guarantee of its subsidiary s borrowing forthe acquisition.
The coal interest acquired by ITOCHU accounts forabout 4 percent of Japan s annual coal imports. As the
project is expected to contribute to stable energy
supply to Japan, NEXI applied coverage in the form ofInvestment and Loan Insurance for Natural Resources
and Energy.
The insurance contract was entered into in October
2012.

Photograph courtesy : ITOCHU Corporation

Chile

Cochrane Coal-Fired Power Project
Mitsubishi Corporation has decided to construct and operate a 472MW coal-fired power plant at thenorthern end of Chile together with AES Gener, a Chilean company. When it begins commercial operation,
the project will supply electricity under power purchase agreements to a number of projects andcompanies, including the Sierra Gorda Copper Mining Project, an undertaking in which Japanesecompanies are participating and for which NEXI decided to provide Overseas Untied Loan Insurance(Investment and Loan Insurance for Natural Resources and Energy).
The project company, Empresa Electrica Cochrane
SpA, raised USD 1.0 billion through project financing, of
which USD 250 million was provided in the form of loans
by Japanese financial institutions (Sumitomo Mitsui
Banking Corporation, Mizuho Corporate Bank, Ltd., and
The Bank of Tokyo-Mitsubishi UFJ, Ltd.). NEXI
provided Overseas Untied Loan Insurance for theseloans.
This project promotes Japanese business expansion
overseas and supports infrastructure development in
the Sierra Gorda Copper Mining Project, which is anundertaking that contributes to stable natural resources
supplies to Japan.
Photograph courtesy : Mitsubishi Corporation
The insurance contact was entered into in March 2013.

20

Oceania
Australia

Australia Ichthys LNG Project
The Ichthys LNG Project is a large-scale LNG development project led by INPEX CORPORATION,
together with Total S.A. of France, Tokyo Gas Co., Ltd, Osaka Gas Co., Ltd, Chubu Electric Power Co., Inc,and Toho Gas Co., Ltd of Japan. The project is developing a new gas-condensate field called Ichthys
located about 200km offshore Western Australia. It will send the natural gas it produces to Darwin fromnewly constructed offshore production facilities through an 889-km subsea gas pipeline. The natural gas
will be liquefied at an onshore LNG plant in Darwin for export.
Of the USD 20 billion that Ichthys LNG Pty Ltd, the project company, raised in project financing, a portion
was provided by loans from Japanese banks, among them Mizuho Corporate Bank, Ltd., The Bank ofTokyo-Mitsubishi UFJ, Ltd. and Sumitomo Mitsui Banking Corporation. NEXI s Overseas Untied Loan
Insurance (Investment and Loan Insurance for
Natural Resources and Energy) was provided tocover loans of USD 2.75 billion, the largest amountever underwritten by NEXI.
The project will produce and ship 8.4 million tons of
LNG per year, about 70 percent of which will be
exported to Japan. Through its involvement in thisproject, INPEX has become the first Japanesecompany to plan, construct and operate an LNG
project as operator. The project is expected tocontribute to stable energy supply to Japan.
The insurance contract was entered into in
December 2012.

Photograph courtesy : INPEX CORPORATION

21

Underwritten Projects

EuropeUK

Intercity Express ProjectThrough its affiliate in the United Kingdom, Agility Trains West Limited, Hitachi, Ltd. concluded acontract for an Intercity Express Programme that is an initiative of the UK Department for Transport.
The project will completely replace older intercity trains that have been in service for over three decades.
Hitachi will come into possession of trains and maintenance yards through Agility, and will continuously
lease trains in maintained condition for a period of around thirty years.
NEXI provided Overseas Untied Loan Insurance for loans extended to Agility by Japanese financial
institutions (The Bank of Tokyo-Mitsubishi UFJ, Ltd., Mizuho Corporate Bank, Ltd., Sumitomo Mitsui
Banking Corporation, Mitsubishi UFJ Trust and Banking Corporation and Sumitomo Mitsui Trust Bank,
Limited).
The new set of high-speed trains will reduce thetravel time between London and the southwestern
UK. And the introduction of bi-mode trains that canswitch back and forth between electric power inelectrified sections and diesel power in non-electrified
sections will reduce environmental impact.
NEXI's insurance coverage for this project will help
increase opportunities for Japanese companies toexpand their railcar businesses overseas, and will also
contribute to the Japanese government's policy of
promoting exports of packaged infrastructure
systems.
The insurance contract was entered into in July 2012.

Photograph courtesy : Hitachi, Ltd

22

Middle East
Jordan

IPP3 Diesel Power Plant Project
Mitsubishi Corporation has launched a project for the construction and operation of a 573MW diesel
power plant in eastern Amman, Jordan, with Korean and Finnish companies. Following the start ofcommercial operation, electricity from the plant will be sold to the National Electric Power Co. (NEPCO)
based on a power purchase agreement.
Three Japanese banks (The Bank of Tokyo-Mitsubishi UFJ, Ltd., Mizuho Corporate Bank, Ltd. and
Sumitomo Mitsui Banking Corporation) agreed to provide aloan of USD 181 million to the project company, Amman
Asia Electric Power PSC, and NEXI provided Overseas
Untied Loan Insurance for the loan.
The insurance that NEXI provides for the projectcontributes to Japanese business expansion in the Middle
East. NEXI will continue to actively support Japanesebusiness overseas.
The insurance contract was entered into in January 2013.

Photograph courtesy：Amman Asia Electric Power Co.

23

Underwritten Projects

AfricaEthiopia

A project to export Boeing 787s to Ethiopian Airlines
NEXI provided reinsurance for Boeing s export of B787 aircraft to Ethiopian Airlines based on areinsurance agreement concluded with the Export-Import Bank of the United States. The project involves
the procurement of 10 highly fuel-efficient 787s by Ethiopian Airlines.
NEXI has supported the export of a total of 183 Boeing aircraft to 29 airlines since the reinsurance
agreement was signed in 2004.
Japanese companies participated as partners in the joint development and production of the Boeing 787.
Thus, Japanese technologies are used in a broad range of components, including the wings, fuselage, tires
and cabin. NEXI will continue to support exports of aircraft parts by Japanese suppliers throughreinsurance associated with exports by Boeing.
The insurance contract was entered into in August 2012.

Photograph courtesy : Boeing

24

2012 Financial Results
Fiscal Year 2012 in Review
On June 21, 2013, the Incorporated Administrative Agency Nippon Export and Investment Insurance (NEXI)
submitted financial statements and other financial information for FY2012 ended March 31, 2013 (its 12th year ofoperation) to the Minister of Economy, Trade, and Industry.

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

8th
(FY2008)

9th(FY2009)

10th(FY2010)

11th(FY2011)

12th(FY2012)

Ordinary proﬁt (loss)

1,899

5,724

5,777

9,006

8,404

Ordinary income

13,306

17,286

17,111

16,24016,866(Underwriting income)

10,051

12,504

11,084

10,5389,910(reference) Premium of original insurance written

36,816

39,606

38,69331,84935,59010,051

10,784

11,075

8,972

9,908

−

1,713

−

1,562

−

3,153

4,409

5,869

5,503

6,524

−

198

−

31

182

Ordinary expenses

11,408

11,562

11,334

7,234

8,462

(Underwriting expenses)

3,774

4,431

4,184

1,394

3,185

(reference) Insurance claims paid

17,15910,441

8,574

8,359

4,416

Net claims paid

1,582

976

749

741

388

Provision for outstanding claims reserves

2,198

−

1,768

−

342

Provision for outstanding commitments reserves

912

3,012

2,409

690

2,466

77

−

76

−

−

Net premium written
Reversal of outstanding claims provision(Investment income)(Foreign exchange gain)(Foreign exchange loss)

7,543

7,116

7,075

5,840

5,261

Extraordinary proﬁt (loss)(3,360)11,00915,83017,59912,022

Net proﬁt (loss)(1,461)

16,733

21,607

26,605

20,426

Total assets

305,703

315,683

339,262

371,754368,664

Net worth

265,359

282,092

303,699

330,304

321,002(Operating and administrative expenses)(Note) Extraordinary profit (loss) includes valuation of profits or losses related to government-invested assets.

Profits and Losses
In FY2012, net premium written increased by 9% to JPY 9,908 million compared to the previous fiscal year.
Premium income from Export Credit Insurance decreased as Japanese exports dropped for two consecutive years,
while an increase in Overseas Untied Loan Insurance and Overseas Investment Insurance more than offset thedecrease in Export Credit Insurance. Ordinary income also increased by 4% to JPY 16,866 million as a result offurther exchange of securities for super long-term government bonds with a higher interest rate, which generated
an investment income of JPY 6,524 million.
Net claims paid amounted to JPY 388 million, down 47% from the previous fiscal year, due to a lack of largecommercial risk events. On the other hand, a large-scale project underwritten under the Overseas Untied Loan
Insurance led to an increase in provision for outstanding commitments reserves by 257% to JPY 2,466 million.
Ordinary expenses amounted to JPY 8,462 million, up 17% compared to the previous fiscal year.
As a result, ordinary profit in FY2012 was JPY 8,404 million, down 7% from the previous fiscal year.
Extraordinary profit was JPY 12,022 million, which includes valuation gains from receivables acquired bysubrogation that were successfully recovered according to rescheduling agreement.
Net profit for the fiscal year was therefore JPY 20,426 million.
25

2012 Financial Results

Financial Statements
Balance Sheet (As of March 31, 2013)（Millions of yen）

Account title

AmountAccount title(Assets)

Amount(Liabilities)

Cash and cash equivalents

10,937

Outstanding claims reserves

1,673

Securities

274,238

Reserves for outstanding commitments

22,673233,025

Amount due to the reinsurer

12,767

Receivables subrogated by paying claims
Accrued income

1,727

Deposits received

Accrued premium

10,912

Advance insurance premium

4,591

Reinsurance credit

3,177

Accrued amount payable

5,228

Buildings

30

99

Accrued bonuses

101

885

Reserves for retirement allowance

365

Accounts receivable

135

Other liabilities

234

Deposits

397

Total liabilities

47,662

Software363

Other assets

578（Note ２）Equipment and ﬁxtures（Note ３）

Allowance for uncollectible receivables(167,809)(Net Worth)
CapitalGovernment investment
Capital surplus（Note ４）

104,352
143,402

Retained earnings

Total assets

368,664

Third term period reserve fund carried forward

52,822

Unappropriated retained earnings

20,426(of which proﬁt for the current year)

20,426

Total retained earnings

73,248

Total net worth

321,002

Total liabilities and net worth

368,664(Notes)１．
Amounts between 1 million yen and 0.5 million yen were rounded up to 1 million yen. Amounts less than 0.5 million yen
were omitted.
２．
Accumulated depreciation on buildings is JPY 202 million.
３．
Accumulated depreciation on equipment and fixtures is JPY 827 million.
４．
The breakdown of capital surplus is as follows:（Millions of yen）

Valuation diﬀerence of receivables subrogated by paying claims

45,386

Valuation diﬀerence of capitalized amount

98,015(Total)143,402

26

Statement of Income（April 1, 2012‒March 31, 2013）（Millions of yen）

Account title

AmountOrdinary income
Underwriting income
Net premium written (Note 2)
Interest income on receivables subrogated by paying claims
Investment income
Income from interest
Interest on securities
Gain on sales of securities
Foreign exchange gain
Other
Other ordinary income
Ordinary expenses
Underwriting expenses
Net claims paid (Note 3)
Provision for outstanding claims reserves
Estimated amount of insurance claims recovery (Note 4)
Provision for outstanding commitments reserves
Operating and administrative expenses
Other
Other ordinary expenses
Ordinary proﬁt
Extraordinary income
Proﬁt relating to in-kind contribution of receivables acquired by government subrogation (Note 5)
Reversal of provision for uncollectible receivables relating to in-kind contribution of receivables acquired by government subrogation
Extraordinary loss
Losses relating to in-kind contribution of receivables acquired by government subrogation (Note 5)
Other extraordinary loss
Net proﬁt(Notes)
1. Amounts between 1and 0.5 million yen were rounded up
to 1 million yen. Amounts less than 0.5 million yen wereomitted.
２．Breakdown of net premium written（Millions of yen）

Premium of original insurance written
Refund of premium paid for reinsurance
Premium received for reinsurance
Premium paid for reinsurance（Net）
３．Breakdown of net claims paid

５．The profits and losses related to assets invested by thegovernment were recognized as extraordinary income
and loss.
(1)Breakdown of profit relating to in-kind contribution ofreceivables acquired by government subrogation

35,5901,830
3,207(30,719)
9,908（Millions of yen）

Insurance claims paid
Reinsurance claims recovered
Refund of insurance claims paid
Refund of reinsurance claims received
（Net）

4,416
(4,022)
(70)
64
388

16,866
9,910
9,908
3
6,524
2
5,054
1,468
182
250
250
8,462
3,185
388
342
(11)
2,466
5,261
16
16
8,404
12,024
4,924
7,100
2
1
0
20,426（Millions of yen）

Interest income
Foreign exchange gain
Bad debt recovered（Total）

3,628
1,276
20
4,924

(2)Breakdown of losses relating to in-kind contribution ofreceivables acquired by government subrogation（Millions of yen）

４．Breakdown of the estimated amount of insurance claims recovery

Other extraordinary loss
（Total）

1
1（Millions of yen）

（1）
Capitalized and evaluated amount of subrogated receivables in connection with rescheduling agreements
1) Provision for uncollectible receivables
6（2）
Capitalized and evaluated amount of subrogated receivables in relation to commercial risk claims paid
1) Commercial-risk subrogated receivables(386)2) Diﬀerence of estimated value between the current year and the previous year concerning
7
subrogated receivables capitalized in line with the outstanding claims provision
3) Bad debt loss
24) Provision for uncollectible receivables
391（3）
Subrogated receivables recovered (not capitalized)(31)（Total）(11)
27

2012 Financial Results

Statement of Cash Flows（April 1, 2012‒March 31, 2013）（Millions of yen）

Ⅰ．
Cash ﬂows from operating activities
Premium received

36,176

Reinsurance premium paid

(24,367)

Insurance claims paid

(4,349)

Reinsurance claims received

7,224

Income from recovery of receivables subrogated by paying claims

24,057

Payment of recovered receivables subrogated by paying claims(14,003)

Income from recovery of receivables subrogated to the government

9,025

Payment of recovered receivables subrogated to the government(9,188)Personnel expenses(1,312)Other operating expenses(3,318)327

Other
Subtotal

20,272
8,753

Interests received−

Interests paid

(32,473)

Payment to the national treasury
Net cash provided by operating activities(3,448)Ⅱ．
Cash ﬂows from investing in activities
Purchase of securities(50,053)

Redemption and sale of securities

54,428Purchase of ﬁxed assets(452)

Reversal of deposits

9

Net cash (used in) provided by investing activities

3,933

Ⅲ．
Cash ﬂows from ﬁnancing activities
Net cash (used in) providaed by ﬁnancing activities
Ⅳ．
Foreign exchange diﬀerence related to cash and cash equivalents
Ⅴ．
Net increase (decrease) in cash and cash equivalents

−
11
496

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

10,441

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

10,937(Notes)１．
Amounts between 1 million yen and 0.5 million yen were rounded up to 1 million yen. Amounts less than 0.5 million yen
were omitted.
２．
Breakdown of cash at the end of the current year by line item of balance sheet（Millions of yen）

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

10,937
Total 10,93728NotesI. Important Accounting Principles

1. Accounting procedures for depreciation⑴Depreciation of tangible fixed assets
Depreciation of tangible fixed assets is calculated by adopting a straight-line
depreciation method. Useful life and residual values are calculated
based on the same methods and standards stipulated in the Corporation
Tax Act.
⑵Amortization of intangible fixed assets
Amortization of trademark rights has been calculated using a straight-line
depreciation method that fixes its residual value at ¥0, in accordance withthe estimated useful life stipulated in the Corporation Tax Act. Amortizationof computer software being used in-house is calculated by a straight-line
depreciation method that views the usability period (4 years) as estimateduseful life and sets its residual value at ¥0.
Calculation basis of reserves for retirement allowances and estimates
２．
To prepare for retirement allowance payments to board members andemployees, a reserve is provided based on 100% of the amount of
retirement allowances required by the rules for payment of retirement
allowances to board members and by those that apply to employees,
respectively. In accordance with the statement of administrative
services costs, estimated increases in retirement allowances with noreserves set aside are computed by deducting retirement allowance
estimates at the end of the previous fiscal year for those who resigned
from the amount arrived at by deducting the retirement allowance
estimate at the end of the previous fiscal year from the retirement
allowance estimate at the end of the current fiscal year for all
employees at the end of the current fiscal year.
３．
Calculation of reserves for outstanding commitments, outstanding
claims reserves, receivables subrogated by paying claims, andallowances for uncollectible receivables
Reserves for outstanding commitments, outstanding claims reserves,receivables subrogated by paying claims, and the allowances foruncollectible receivables are dealt by calculating the respective amounts inaccordance with the following ordinance: Concerning the calculation
methods ordained by the Ministry of Economy, Trade, and Industry,
pursuant to the articles of the ministerial ordinance with regard to thefinance and accounting of the Incorporated Administrative Agency Nippon
Export and Investment Insurance (2001.03.27 Trade No.2).
４．
Calculation of accrued bonuses
Accrued bonuses for board members and employees are provided
based on the amount remaining in the fiscal year according to the rules
for remuneration of board members and employees, respectively.
５．
Valuation standards and methods for securities⑴Held-to-maturity securities are valued at amortized cost (using a straight-line
method)⑵Other securities without market value are stated at cost using the moving
average cost method.
６．
Valuation of foreign-currency receivables and payables
Foreign-currency receivables and payables are converted
Japanese yen at fiscal year-end exchange rates.

８．
Accounting procedure for consumption tax
Consumption tax accounting is based on the tax included method.
９．
Decommissioning liabilities
Restoration liabilities under the office lease have not been recorded as
decommissioning liabilities because it is impossible to make a fair andreasonable estimate of them due to the unspecified lease period and thelack of a present plan to vacate the currently leased office.
１０．
Changes to accounting principles
No changes to the accounting principles from the previous fiscal year.
１．
Financial instrumentsａ．
Management of financial instruments held by NEXI
NEXI is engaged in the trade and investment insurance business.
Recoveries of receivables subrogated by paying claims are invested insecurities to strengthen NEXI s financial base. The securities held by
NEXI include government, municipal, and government-backed bonds.
b. Financial instruments and risk
Receivables subrogated by paying insurance claims are exposed to
debtor countries or debtors credit risk. Securities are exposed tointerest rate and market fluctuation risks.
c. Financial instruments and risk management29

2. Fair value of financial instruments
The carrying amounts, fair value, and differences on the balance sheet
as of the end of the fiscal year 2012
（Millions of yen）

(1) Cash and cash equivalents(2) Securities
Held-to-maturity securities(3) Receivables subrogated by paying claims
Receivables subrogated by paying claims
Allowance for uncollectible receivables(*)(Net)(4) Accrued premium(5) Reinsurance credit
Assets(6) Amount due to the reinsurer
Liabilities

Carrying amount Fair value Differences−
10,937
10,937274,238 304,021

29,783233,025(167,809)
65,216
65,216
10,912
10,912
3,177
3,177
364,479 394,262
12,767
12,767
12,767
12,767−−−29,783−−(*) Allowance for uncollectible receivables associated with receivables
subrogated by paying claims is deducted.
(Note1) Fair value measurement of financial instruments and securities⑴Cash and cash equivalents
Fair value of deposits with no stated maturity is equal to carrying value,
since it approximates the carrying value.
⑵Securities
Fair value of securities is based on the quoted market value or value
quoted by financial institutions. Carrying amount, fair value, anddifferences of held-to-maturity securities (in accordance with theaccounting standards for incorporated administrative agencies andnotes) are as follows.
（Millions of yen）

Type of securities

Carrying
amountFair
value

Fair value >Carrying amountGovernment andmunicipal bonds

266,739

296,522

Fair value ≦Carrying amountGovernment andmunicipal bonds

into

７．
Calculation of opportunity costs in the statement of administrative
services costs
Interest rates for the calculation of opportunity costs relating toinvestments by the government at the yield of 10-year government
bonds (0.560%) have been applied.

II. Financial Instruments⑴Country risk management
In concluding insurance contracts (that could cause the acquisition ofreceivables subrogated by paying insurance claims), NEXI s Country
Risk Analysis Group conducts risk assessments by gathering
information through the Berne Union and OECD as well as researchingand evaluating country risk. Concluded contracts are monitored by the
Monitoring Committee for continued risk management.
⑵Credit risk management
For the management of credit risk of an export contract counterparty(overseas buyer), NEXI s Credit Administration Group conducts a credit
check and assessment of overseas buyers.
⑶Market risk management
Market risk, such as interest rate and price fluctuation associated withinvestment in securities, is managed by the Fund Operation Meeting that
discusses NEXI s investment policies and checks investment statuses.
In addition, NEXI s Accounting Group, the secretary of the Fund
Operation Meeting, monitors the bond market and liquidity risks.
d. Supplementary explanation regarding fair value of financial instruments
Fair value of financial instruments is based on quoted market price. If themarket price is not available, fair value is based on reasonably assessedvalue. Fair value of financial instruments is measured based on certain
assumptions, and might differ if measured based on different assumptions.

Total

Differences
29,783

7,500

7,499

(1)

274,238

304,02129,783

The aggregate sales price of held-to-maturity securities sold during
the business year is JPY 22,467 million. The aggregate gain on sale is
JPY 1,468 million. These securities, which were purchased before theprevious medium term, were sold for payment to the national treasury
and for the reinvestment into higher yielding securities in response to
the changing interest-rate environment. Therefore, they continue to beclassified as held-to-maturity securities in accordance with theprovision of Note 23 (1) and (2) of the accounting standards forincorporated administrative agencies.
⑶Receivables subrogated by paying claims
Regarding receivables subrogated by paying claims, allowances foruncollectible receivables are recorded pursuant to the ordinanceConcerning the calculation methods specified by the Ministry of
Economy, Trade, and Industry, pursuant to the articles of the ministerial
ordinance with regard to the finance and accounting of theIncorporated Administrative Agency Nippon Export and Investment
Insurance (2001/03/27 Trade No.2).
(i)Allowances for uncollectible receivables associated with receivables
subrogated by paying political risk claims are calculated using a ratiothat is based on the valuation by the global financial market regarding
repayment prospects of each debtor country or by using a given ratio.
(ii)Allowances for uncollectible receivables associated with receivables
subrogated by paying commercial risk claims are calculated in two
different ways. For receivables from debtors that are actually or nearly2012 Financial Results（Millions of yen）
bankrupt, allowances are calculated by deducting foreclosure
estimates and estimated amounts recoverable under a payment
guarantee. For receivables from other debtors, allowances are obtainedby calculating loss estimates based on the present value of estimatedfuture cash flow or estimated amounts recoverable by foreclosure orunder a payment guarantee. Fair value of receivables subrogated bypaying claims is equal to the carrying value at the fiscal year end lessallowances for uncollectible receivables, since it approximates this net
carrying value.
⑷Accrued premium, ⑸ Reinsurance credit, and ⑹ Amount due to the reinsurer
Fair values of accrued premiums are equal to the carrying value, since itapproximates the carrying value as they are settled in a short period of time.
(Note2) Expected payment and redemption amount of money claims andsecurities with maturity after the fiscal year end

More
More
More
More
More
than
than
than
than
1 year 1 year 3 years 5 years 10 years than20
or lesstoTototo
3 years 5 years 10 years 20 years years

Undetermined(*)

Securities
Held-to-maturity
Securities

7,500

‑

25,00026,500 214,500‑

Receivables
subrogated bypaying claims

14,57922,13018,32743,19040,013‑ 94,786

Total

22,07922,13043,327

69,690 254,513‑ 94,786‑(*)The receivables subrogated by paying claims that are inarrears are classified as Undetermined.

III. Important Multi-year Obligation
Not applicable

IV. Important Subsequent Events
V. Account Titles Used by NEXI

Not applicable(1) Balance sheet
Account title

Description

Receivables
subrogatedby paying claims

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

Accrued income

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

Accrued premium

Accrued insurance premiums associated with insurance applications.

Reinsurance credit

Amounts receivable from the government, such as reinsurance claims.

Outstanding claims
reserves

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

Reserves foroutstanding
commitments

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

Amount due to thereinsurer

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

Allowance foruncollectible receivables

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

Advance insurance
premium

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

Capital surplus

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

(2) Statement of income
Account title

Description

Net premium written

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

Provision for outstanding
claims reserves

Provision for outstanding claims reserves for the current fiscal year.

Net claims paid

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

Estimated amount of
insurance claims recovery

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

Provision for outstanding
commitments reserves

Provision for outstanding commitments reserves for the current fiscal year.

Extraordinary income
Extraordinary loss

Interest income and reversal of provisions for uncollectible receivables relating to assets invested by the government (receivables
subrogated by paying claims).
Recovery and other expenses relating to government-invested assets (receivables subrogated by paying claims).

VI. Other Accounting Information Necessary to Understand NEXIs Current Situation
According to the basic policy for FY2013 budget compilation (cabinet decision dated January 24, 2013), the review plan on the special account reformand system and organization of Incorporated Administrative Agency shall be frozen for the time being except for decisions made before the date, and thegovernment will continue to discuss the review and reform.

30

Fourth-Term Objectives
NEXI has set its medium-term objectives for the fourth term of FY2012 to FY2015 and will implement measures andpolicies based on these objectives.
According to the decisions made at the cabinet meeting of January 2012, and based on the Strategy for Rebirth of Japan,
NEXI will continue to work to achieve greater effectiveness and flexibility of management, integrating our service moreclosely with the government's policy direction. NEXI will be required to improve and expand the trade insurance business,
as well as reinforce the operating framework of the insurance approval process and risk management, in order tostrengthen the competitiveness of Japanese companies and enhance customer convenience.
Considering that trade insurance is financed by premiums from customers without recourse to government subsidy, we
will work to achieve a truly efficient and effective management style based on the cost-benefit relationship between theinsurance business s income and its operating and personnel costs.

1

Measures to improve the quality of NEXI s services and other operations（１）Product Improvement
Our actions will be in response to the Japanese trade and industry policy while proactively addressing customer
needs in the changing business environment. Our products will aim at providing high quality services equivalent
with other countries to secure the international competitiveness of Japanese companies.

（２）Improvement of services
By adopting a customer perspective at all times, every effort will be put into improving services and building
relationships of trust with our customers.

（３）System streamlining to reinforce risk management and ensure fair operation
We will streamline the system by developing human resources to reinforce management of risks and claims
assessment, as well as internal controls and compliance.

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

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

31Fourth-Term Objectives

2

Improvement in business efficiency（１）Promotion of efficient business operations
NEXI s trade insurance system is being operated independently, without subsidy from the government, with its solesource of revenue being the insurance premiums received from insurance users. Therefore, when making
disbursements, we will be thoroughly cost-conscious and fully consider cost-effectiveness in order to improve theefficiency of our business operations.

(1) In accordance with the medium-term objectives, we will make necessary improvements toward more advanced risk analysis and assessment, alongwith improving publicity activities. At the same time, necessary actions to improve operational efficiency such as rationalization of the operatingprocess, enhancement of staff abilities, and promotion of outsourcing will be undertaken. Also, as needed, the structure of the organization andpersonnel assignments will be revised according to the workload. Necessary steps will be undertaken to increase cost-effectiveness in all areas,
including personnel expenses, by carefully evaluating the appropriateness of each expenditure, by using cheaper sourcing, and by efficient usage ofthe operating expenses.
(2) Based on the incorporated administrative agency reform, we will take into account the government employees pay scales and curb our overall
personnel expenditures.
By revising ability-based benefits and other benefits while maintaining necessary staff expertise in areas such as international financing, we willappropriately decrease the Laspeyres Index.
(3) In principle, NEXI s entrance into new procurement contracts will be based on competitive procurement processes such as competitive tendering.
Non-competitive bidding or application will be avoided as much as possible, and will try to steadily implement reforms based on a program forreviewing no-bid contracts.
(4) We will seek to promote the efficiency of operations by outsourcing part of our office work and business operations to private financial institutions,etc.

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

3

Improvement in composition of finances（１）Financial base reinforcement
In order to continuously and stably offer our customers assured peace of mind, we ensure the maintenance of asound financial foundation. In concrete terms, we will improve the efficiency of business operations and hold down
expenditures by thorough risk management. In addition, we will set up an appropriate insurance premium charge
system and reinforce appropriate management and recovery of debts incurred by insured risks in order to securea steady revenue stream.

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

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

4

Responding to the new system based on the administrative reform
We will ensure a smooth transition to a new special company wholly owned by the government without the tradereinsurance special account. This will include a quick implementation of necessary measures such as strengthenedrisk management and internal controls.

5

Fostering personnel with high degree of expertise
As an expert organization providing quality services that meet customers needs, we will implement an improved
personnel system and raise the expertise level of our staff through a more comprehensive in-service training
system and place a high priority on the development of expertise. We will also continue to recruit staff memberswith expertise in fields such as international financing, the legal system, country risks, business finance, and trade.
32

Customer Service Charter

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

Ⅱ NEXI s Pledge to Customers
We are committed to:（1）Providing insurance products that make our customers
feel secure and protected when conducting overseas
transactions（2）Providing advice to our customers from the preliminary
stage of planning（3）Promptly responding to inquiries and acting in theinterests of our customers（4）Meeting our customers demands and business needs（5）Promptly completing assessment and payment of
insurance claims, and（6）Promptly allocating recoveries（1）Providing insurance products that make our customers
feel secure and protected when conducting overseas
transactions(ⅰ)If you suspect that your international transactions,
including exports, foreign investments, or overseas
loans, may incur risk, please visit our website(http://www.nexi.go.jp) and go to the insurance productsection, or contact NEXI s Customer Relations Office.
(ⅱ)We can send our staff to your office at your request to
provide further information on our insurance productsthat support and protect your international business.
Please feel free to contact us.
（2）Providing advice to our customers from the preliminary
stage of planningIf you plan to initiate international transactions, such asexports or overseas investments, NEXI is ready to serveyou. We will be pleased to talk with you at an early stageof your project s formation and propose the mostappropriate insurance products to minimize any risk
involved.
（3）Promptly responding to inquiries and acting in theinterests of our customers(ⅰ)If you have any questions about insurance products,
please call or email our Customer Relations Office or
the relevant group in charge.
(ⅱ)Our premium calculator is available on the NEXI website
to estimate your insurance premium. If you give us
information on your planned transaction, the group in
charge can generally estimate the premium on thesame day of your inquiry, or on the following business
day at the latest. (For medium or long-term non-L/Gtransactions, however, we will respond within five33

business days.) If the group in charge finds it difficult to
respond to your inquiry within the specified time limits,
it will promptly notify you to that effect along with thereason for the delay and the expected date of response.
(ⅲ)Should the group in charge find any inadequacy in a
pre-application form, insurance application form, orother form that you have submitted (other thanenvironment-related forms), we will notify you within fivebusiness days of our receipt at the latest.
(ⅳ)If you have any questions about NEXI s insurance
system with regard to a specific project, please informthe group in charge or the Customer Relations Office.
We will respond within five business days at the latest.
Should we find it difficult to respond within the statedperiod, we will promptly notify you to that effect with thereason for the delay and the expected date of response.
（4）Meeting our customers demands and business needs(ⅰ)We would be very appreciative if you could give us
sufficient time when consulting with us, as ourassessment may take longer than expected. If it
becomes necessary to accelerate procedures (forexample, because an export contract is proceeding
more rapidly than anticipated), please inform us.
(ⅱ)Your business needs are always important to us and wewill do our utmost to meet your accelerated deadline. If
we find it difficult to meet the new deadline, we will
immediately inform you of how long it will take tocomplete the necessary procedures.
（5）Promptly completing the assessment and payment of
insurance claims(ⅰ)As soon as we receive an insurance claim form, we willassess the details in light of the insurance policy
provisions to determine the amount of the claim to be
paid. We will then make a payment within the stipulated
time. This is generally within two months of receipt of
the claim; however, in a situation where more time isrequired for assessment, this rule does not apply. For an
application for insurance claims, we may request thatyou execute the obligations of notification and of loss
prevention and reduction that are stipulated in such
documents as insurance policy provisions. In addition,
we may also request that you submit all necessary
documents stipulated in the insurance policy provisions
and other regulations within a specified time.
(ⅱ)In the event that an inadequacy is found in a submitted
claim form or other document in light of insurance policy
provisions or other regulations, we will notify you nolater than three business days after receiving the
document.
(ⅲ)We would appreciate your understanding andcooperation, including early submission of documents
necessary for assessment, so that we may pay claims
within the period stipulated in the insurance policy
provisions or other regulations.
（6）Promptly allocating recoveries(ⅰ)When all or part of a subrogated claim is recovered, we
will promptly allocate the recovery in accordance withinsurance policy provisions and other contracts.
(ⅱ)In allocating a recovery in accordance with a Paris Clubdebt rescheduling program or other program, we will in
principle complete procedures of remittance to youraccounts by the business day following theconfirmation of receipt of the full amount in NEXI s
account.

Customer Service Charter

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

Ⅳ Your Comments and Complaints
Enhancing customer satisfaction is our constant aim. If you
experience difficulty with any procedure or have a complaint
about our services, please do not hesitate to contact us. Yourproblem will be addressed promptly.

（1）Please visit our website for comprehensive information on
our insurance products and services.
The NEXI website includes the following information(ⅰ) R e c e n t d e v e l o p me n ts (i nc l ud i ng ch a n g e s ins y s t e m s , c o v era g e co n d i ti o n s , a n d re c e nt
u n d e r w r i t t e n p r o j ec ts )(ⅱ) D e s c r i p t i o nofour
i ns u ran c e
prod u c ts
( p a m p h l e t s a r e av ai l a b l e)(ⅲ) T e r ms o f c o v erag e b y co u n try /reg i on(ⅳ) I n s u r a n c e a p p li c a ti on p roc e d u res(ⅴ) I n s u r e d e v e n t s a n d s u b s e q u e n t p roc e d u res(ⅵ) P r e m i u m c a l c ul ato r(ⅶ) D o w n l o a d a b l e a p p l i c a ti on forms(ⅷ) R u l e s c o n c e r ni ng tra d e i n s u ran c e (i nc l ud i ng
i n s u r a n c e p o l i cy p rov i s i on s fo r a l l of NE X I s
i n s u r a n c e p r o d uc ts )(ⅸ) E n v i r o n m e n t a l co n s i de rati on s(ⅹ) P r o c u r e me n t i nfo rmati on(ⅺ) W e b m a g a z i n e e -NE X I(ⅻ) W E B s e r v i c e（1）We will do whatever is necessary to resolve any problem（2）Our annual report (in Japanese and English) offers theresults of our trade insurance business and our financial
statements.
Other publications are also available, including the NEXI
corporate brochure and leaflets on our insurance products(in limited numbers). Please feel free to call the General
Management and Public Relations Group (Phone: 81(0)3-3512-7655) or the Customer Relations Office.
（3）For inquiries regarding our website, annual report, andany other public relations matters, please contact theGeneral Management and Public Relations Group.
(Phone: 81-(0)3-3512-7655)

specific project, please provide the details to theyou may encounter. Please provide us with the details of
the problem and what you wish to be done. We will
immediately find the source of the problem and resolve it.
（2）If you have any complaints about our services or ourhandling of your project, please inform the Customer
Relations Office.
(ⅰ)For any complaints about our services, please provide
the details to the Customer Relations Office in writingor via email. The Customer Relations Office will examine
your problem and inform you of how it will be dealt with.
If it is difficult for us to take immediate action, we will
provide the reason for the difficulty and how we intend
to proceed(ⅱ)If you have any complaint about our handling of a
Customer Relations Office in writing or via email. The
Customer Relations Office will review the details andprovide the results of its review without delay. If
immediate action cannot be taken, the Customer
Relations Officer will inform you of the reason and when
the problem will be resolved.

お客様窓口について
Customer
Relations Office（1）NEXI has established a Customer Relations Office to provide more efficient services to our customers in accordance with ourcustomer-first policy.
（2）The Customer Relations Office offers customer support by seeing the situation from the customer s viewpoint. Any inquiry or
request concerning trade insurance and specific project would be appreciated. We will take prompt action regarding thesematters.
Information about NEXI s sections and groups in charge is also available on our website.
Customer Relations Office (Head Office)Phone ……………… 81-(0)3-3512-7712
Fax …………………… 81-(0)3-3512-7687
E-mail …………………… info＠nexi.go.jp

Customer Relations office (NEXI, Osaka)

Phone ……………… 81-(0)6-6233-4019
Fax …………………… 81-(0)6-6233-4001

From 9:00 a.m. till noon and from 1:00 p.m. till 5:30 p.m., Monday through Friday(except holidays, year-end and New Year holidays)

34

Profile of NEXI

From the left: Keiji Wada（Vice Chairman）, Kazuhiko Bando（Chairman and CEO）,
and Fuminori Inagaki（Vice Chairman）

Members of the Board and the Audit Board
Chairman and CEO …………… Kazuhiko Bando
Vice Chairman ………………… Keiji Wada
Vice Chairman ………………… Fuminori Inagaki
Corporate Auditor（Full Time）… Takeshi Oiwa
Corporate Auditor（Part Time）… Takashi Imai

Takeshi Oiwa
（Corporate Auditor）

35

Takashi Imai
（Corporate Auditor）

Profile of NEXI

Name

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

Date of
Establishment

April 1, 2001

Acts

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

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

Competent
Minister

The Minister of Economy, Trade and Industry

CapitalJPY 104.4 billion (Fully contributed by the Japanese Government)(Unchanged from the previous year)

Number of
Full-time
Employees

143 (As of April 1, 2013)

Scope ofBusiness

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

Brief History

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

Oﬃce

Head oﬃce
Chiyoda First Building, East Wing 3rd Floor, 3-8-1 Nishikanda, Chiyoda-ku, Tokyo, 101-8359
Japan
Phone: 81-(0) 3-3512-7650
Fax: 81-(0) 3-3512-7660
Osaka Branch
Aioi Nissay Dowa Insurance Yodoyabashi Building 8th Floor,
3-1-22 Kitahama,Chuo-ku,Osaka City,
Osaka, 541-0041 Japan
Phone: 81-(0) 6-6233-4019
Fax: 81-(0) 6-6233-4001
Overseas Oﬃces
NEXI Paris, NEXI New York, and NEXI Singapore（See page 38.）

Main Insurance
Products

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

URL

http://www.nexi.go.jp

36Organization Chart（as of July, 2013）

Planning and
Administration
Department

Chairman and CEO

General Management and Public Relations Group
Strategic Planning Group
Legal Group
Personnel Group

Vice Chairman

Procurement and Administration GroupAccounting Group
Treasury Group
System Oﬃce
System Administration Group
System Development & Statistics GroupCounselor
Asset Management
Department
AuditorExaminer
Secretariat

Claims Service Group
Recovery Group
Recovery Services Group

Underwriting
Department

Business Planning Group
Customer Relations Oﬃce
Underwriting Group

Compliance
Committee

Reinsurance Underwriting Group
Comprehensive Contract Aﬀairs Group
Individual Contract Aﬀairs Group

Statistics Committee

Structured and Trade
Finance Insurance
Department

Power & Mining GroupOil & Gas Group
Infrastructure Group

Financial Risk
Management
Department

Credit Analysis and Control Group
Environment GroupCountry Risk Analysis Group
Credit Administration Group

NEXI, Osaka

Underwriting Group
Customer Relations Oﬃce

Overseas Oﬃces

NEXI, Paris
NEXI, New YorkNEXI, Singapore

37

Contact Information
Head Office
Chiyoda First Building, East
Wing 3rd Floor, 3-8-1
Nishikanda, Chiyoda-ku,
Tokyo, 101-8359 Japan
Phone: 81-(0)3-3512-7650
Fax: 81-(0)3-3512-7660

Overseas Offices
c/o JETRO 27 rue de Berri 75008 Paris France
Phone: 33-(0)1-4261-5879 Fax: 33-(0)1-4261-5049

c/o JETR0 1221 Avenue of the Americas, 42 Fl,
McGraw-Hill Bldg. New York N.Y. 10020 USA
Phone:1-212-819-7769 Fax:1-212-819-7796

Osaka Branch
Aioi Nissay Dowa Insurance
Yodoyabashi Building 8th Floor,
3-1-22 Kitahama,Chuo-ku,
Osaka City, Osaka
541-0041 Japan
Phone: 81-(0)6-6233-4019
Fax: 81-(0)6-6233-4001

c/o JETR0 16 Raﬄes Quay#38-05, Hong Leong Bldg.
Singapore 048581
Phone: 65-6429-9582 Fax: 65-6220-7242

NEXI,Osaka

Aioi Nissay Dowa
Insurance
Yodoyabashi Building

38

Nippon Export and Investment Insurance
Chiyoda First Building, East Wing 3rd Floor, 3-8-1 Nishikanda,
Chiyoda-ku, Tokyo, 101-8359 Japan
Phone: 81-(0)3-3512-7650 Fax: 81-(0)3-3512-7660
http://www.nexi.go.jp
Inquiries
General Management and Public Relations Group,
Planning and Administration Department
Phone: 81-(0)3-3512-7653 FAX: 81-(0)3-3512-7660
E-mail: info@nexi.go.jp