Nippon Export and Investment Insurance
Annual Report FY2016

Message
from the Chairman

I have pleasure in presenting the annual report of Nippon Export and Investment Insurance (NEXI) for
FY2016 ended 31 March 2017, and I am truly grateful for your support and cooperation throughout the
fiscal year.
The global economy overall continued to recover moderately throughout FY2016. Although the outlook
became more uncertain during the first half partly reflecting concern about the Chinese economy, declining oil prices and the “Brexit” referendum, some pick-up in the Chinese economy and oil prices seen in
the second half eased the uncertainty, slowing the negative trend in the advanced economies.
In May 2016, Prime Minister Shinzo Abe announced the “Expanded Partnership for Quality Infrastructure” initiative to offer quality infrastructure investment to meet the world’s huge infrastructure demand.
In response to this initiative, NEXI worked out various measures to strengthen its functions, such asincrease in political risk coverage in Overseas Investment Insurance and Export Credit Insurance. NEXI
also made a positive contribution to the strengthening of Japanese companies’ competitiveness by supporting infrastructure projects including power and railway, and other sectors’ projects such as agriculture.
During the fiscal year, we continued to increase support to Japanese SMEs. Today our SME-support
network based on business alliances and cooperative partnerships with local banks and shinkins (credit
associations) covers all 47 prefectures in Japan. NEXI also updated its insurance designed for SMEs, andlaunched Export Credit Insurance for SMEs and AFF Sector in July 2016 to encourage the primary-sector
SMEs to expand business overseas. The number of contracts of our Export Credit Insurance for SMEs
and AFF Sector continued to grow in FY2016.
On April 1, 2017, NEXI completed transition from Incorporated Administrative Agency to a special
stock company wholly owned by the government to improve its managerial flexibility, efficiency andmobility while strengthening coordination with the government by reflecting Japan’s policy. As the “new”
NEXI, we are continuously responsible for offering the best possible support for our customers and all the
executive officers and staff members of NEXI have renewed determination to fulfill our responsibility as
the sole provider of Japan’s trade and investment insurance system. We will work to meet our customers’
needs by quickly responding to their changing business environment, striving for self-improvement,always willing to take on new challenges, nurturing diversity and expertise, and strengthening the organization. We appreciate your continued understanding and support.

Kazuhiko Bando

Chairman and CEO
Nippon Export and Investment Insurance
July 2017

Contents
About NEXI …………………………………………………

5

Proﬁle of NEXI ………………………………………………

6

Business Operation and Management System ………

8

Organization Chart ………………………………………… 10
Access Map………………………………………………… 11

TOPICS❶ …………………………………………………… 12

NEXI's Business …………………………………………… 13
Trade and Investment Insurance − How It Works …… 14
Insurance Products to Support Your Business ……… 15
Application Procedure
for Trade and Investment Insurance …………………… 22
International Cooperation ………………………………… 26
TOPICS❷ …………………………………………………… 28

FY2016 Review of Performance………………… 29

Performance Highlights …………………………………… 30
Review of Performance …………………………………… 36
Business Overview ………………………………………… 40
Underwritten Projects …………………………………… 46
Underwritten Projects（SMEs related） ………………… 52

FY2016 Financial Results ……………………………… 59
FY2016 Financial Review ………………………………… 60

Financial Statements ……………………………………… 61
N o t e s ………………………………………………………… 64

Figures in this Annual Report
In principle, ﬁgures in this report are rounded to the nearest unit. Therefore, the sum of individual ﬁgures may deviate from the sum presented.
Figures that fall below a unit as 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.

About NEXI
Proﬁle of NEXI ……………………………… 6
Business Operationand Management System ……………… 8
Organization Chart…………………… 1 0

Access Map ……………………………… 1 1〉5
Annual Report FY2016 〉

About NEXI

Profile of NEXI
Organization Name

Nippon Export and Investment Insurance

Date of Establishment

April 1, 2017

Acts

Trade and Investment Insurance Act

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

Competent Minister

The Minister of Economy, Trade and Industry

Capital

JPY169,352,324,369 - (100% State-owned)

Executive Officers

Chairman and CEO…………………………………………… Kazuhiko Bando
President ……………………………………………………… Masafumi Nakada
Managing Executive Officer, Member of Board ………… Keiji Wada
Managing Executive Officer, Member of Board ………… Kohei Okada
Member of Board …………………………………………… Hideo Teramoto
Audit & Supervisory Board Member (Full-Time)…………… Keishi Nakamura
Audit & Supervisory Board Member………………………… Akio Otsuka
Audit & Supervisory Board Member………………………… Tomoyo Matsui

Number of Employees 167 (as of April 1, 2017)
Scope of Business1)To conduct trade and investment insurance business operations complying with the provisionof Chapter III of the Trade and Investment Insurance Act.
2)To conduct business incidental to the business stated in 1) above.
3)To underwrite reinsurance for international institutions, foreign governments or foreigncompanies who underwrite insurance (including reinsurance) which indemnifies losses similar
to the losses covered by the trade and investment insurance, for the liability incurred by suchinsurers.
4)To underwrite reinsurance for Japanese insurance companies who underwrite insurance(excluding ordinary insurance) other than the trade and investment insurance deemednecessary to carry out the purpose of sound development of foreign transactions as prescribedby Cabinet Order, for the liability incurred by such insurers under the said insurance.
5)To cede reinsurance of the liability held by NEXI under the Trade and Investment Insurance
Act to international institutions, foreign governments or foreign companies who underwrite
insurance (including reinsurance) which covers the risks similar to those covered by the tradeand investment insurance.

Brief History

Jul 1999
Dec 1999
Apr 2001
Jul 2015
Apr 2017

Enactment of Act on General Rules for Incorporated Administrative Agency
Enactment of Act Revising a Section of the Trade and Investment Insurance Act
Establishment of Nippon Export and Investment Insurance (NEXI) as an
Incorporated Administrative Agency
Enactment of Act Revising a Section of the Trade and Investment Insurance Act
Establishment of Nippon Export and Insurance (“new” NEXI) as a special stockcompany(Since 1950, the trade and investment insurance was handled by the Ministryof Economy and Trade, Industry (the former Ministry of International Trade andIndustry))

Domestic Offices

Head Office: Tokyo, Branch Office: Osaka

Overseas Offices

Paris, New York and Singapore〈 Annual Report FY2016
6〈｜Executive Officers

About NEXIOn April 1, 2017, Nippon Export and Investment Insurance (NEXI) was transferred into a 100% government-owned special
stock company from an incorporated administrative agency, and has been newly established as Nippon Export and Investment
Insurance. This transformation is aimed to strengthen NEXI’s ties with the government, so as to better reflect the intentions of
the government policies in NEXI’s business, and also to improve the flexibility, efficiency and mobility of business managementat NEXI. Simultaneously, the Special Account for Trade Reinsurance held by the government was abolished, and all assets andliabilities of the account were succeeded by the “new” NEXI. Having abolished the government provided reinsurance system, inthe event of emergency where NEXI is faced with a difficulty in funding, countermeasures will be taken by the government asprescribed in the Trade and Investment Insurance Act to ensure secure payment of insurance claims.
〈Outline of various measures taken to accommodate the transformation of NEXI into a Special Stock Company〉〜March2017

Government (General Accounts, etc.)

April
2017〜

after transformation
into Special Stock Company
Government (General Accounts, etc.)

Special Account for Trade Reinsurance

Cession

NEXI(Incorporated Administrative Agency)
Trade andInvestment Insurance
Insured (Companies, Financial Institutions)

Trade and Investment
Insurance Business(Financially Independent)

Underwriting Requirements

Guarantee

Trade and Investment
Insurance Business(Financially Independent)

NEXI(Special Stock Company)
Trade andInvestment Insurance
Insured (Companies, Financial Institutions)〉7
Annual Report FY2016 〉

FY2016 Review of Performance FY2016 Financial Results｜NEXI Transformed into a Special Stock Company

NEXI's Business

Back Row (from left): Hideo Teramoto (Member of Board), Keiji Wada (Managing Executive Officer, Member of Board), Tomoyo Matsui(Audit & Supervisory Board Member), Keishi Nakamura (Full Time Audit & Supervisory Board Member)
Front Row (from left): Akio Otsuka (Audit & Supervisory Board Member), Kazuhiko Bando (Chairman and CEO), Masafumi Nakada(President, Member of Board), Kohei Okada (Managing Executive Officer, Member of Board)About NEXI

Business Operation and Management System｜Corporate Governance
Surveillance, Evaluation and Business Execution
In addition to the establishment of organs such as the Boardof Directors and the Audit & Supervisory Board in compliancewith the Companies Act, NEXI strengthens the surveillance andevaluation functions by establishing the Evaluation Committee,
the Management Council, and the Corporate GovernanceCommittee, aimed to also enhance its mobility in businessexecution.
General Meetingof Shareholders
Independent
Accounting Auditor

Audit &
Supervisory Board

the outside director of the company. This organ evaluates andadvises on the operation and management status of NEXI as well
as issues to be consulted by the Board of Directors regarding
NEXI's management.

④Management Council

The Management Council is a conference body composedof executive officers and others, and deliberates importantmanagement issues (except for issues to be addressed by the
Corporate Governance Committee).

⑤Corporate Governance Committee

The Corporate Governance Committee is a conference bodycomposed of directors and other members, and deliberates
important issues concerning corporate governance and internal
control of the company.

Board of Directors
Evaluation
Committee
Chairman & CEO
Internal
Audit GroupManagement
Council
Corporate GovernanceCommittee①Board of Directors

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

②Audit & Supervisory Board

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

③Evaluation Committee

The Evaluation Committee consists of outside experts and〈 Annual Report FY2016
8〈Government Involvement
NEXI is a 100% government owned company and we operate
our trade and investment insurance business under the controlof supervision by the competent minister and inspections by the
Board of Audit and the competent ministry, etc.

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

｜Compliance
As a policy-based financial institution responsible for the tradeand investment insurance system, NEXI positions complianceas one of our most important management issues to stay awareof our public mission and social responsibility by observing thelaws and regulations to operate always with a sense of fairness.
The following are the initiatives we follow:

Maintaining Awareness and Thoroughnessof Compliance Rules◦NEXI conducts education and awareness-raising activities oncompliance so that all executive officers and staff members(including dispatched workers) conduct their tasks incompliance with the applicable laws and regulations and the
Articles of Incorporation, in a sound and appropriate manner.

Compliance Status Monitoring by the◦NEXI’s Corporate Governance Committee (mentioned
above) is a conference body with the purpose of deliberating
important internal control related issues, and monitoring
compliance system implementation status.

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

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

｜Risk Management
As a governmental agency and the sole specialized institution
responsible for the trade and investment insurance businessin Japan, it is our intention to provide security to even morecustomers who conduct foreign transactions, and to promote
efforts in implementing the growth strategy of Japan by

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

②Cash Management / Liquidity Risk

NEXI's funds are reserves necessary for payment of future
insurance claims.
In light of this nature of our funds, while aiming for efficiency,
we prioritize and ensure high safety and liquidity in our cash
management so as to be prepared for responding to claim
payments with appropriate timing and amount.

③Large-Scale Disaster Risk

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

④Operational Risk

NEXI regards operational risk as risks pertaining to internal
processing procedures, behaviors of our executive officers andstaff members, insufficient development of computer systems
and occurrence of other exogenous events. Such risks are
categorized so as to be controlled and managed in an appropriatemanner.
Also, in order to enhance the effectiveness of operational risk
management, we foster the awareness of such risks among our
executive officers and staff members, and foster a corporate
culture which values discipline in one’s behavior.

〉9
Annual Report FY2016 〉

FY2016 Review of Performance FY2016 Financial Results

Compliance and Promotion①Insurance Underwriting Risk

NEXI's BusinessCorporate Governance Committee

proactively responding to the diverse needs of our customers. In
order to fulfill our future social roles, NEXI has constructed thefollowing framework for appropriate risk management.

About NEXI

◦NEXI stipulates internal rules concerning confidential
information management, information security policies andother information management by developing a frame toappropriately store and manage confidential information andinformation assets, and strives to disseminate and thoroughly
comply with our compliance rules.
◦NEXI prepares a compliance manual which outlines basic
matters concerning compliance that should be known
by the executive officers and staff members as well as
important laws and regulations which must be observed. The
manual also provides a comprehensive explanation on ourinternal compliance-related rules to help promote a better
understanding pertaining to compliance issues among our
executive officers and staff members.

About NEXI

Organization Chart（as of April,2017)

General Management andPublic Relations Group

GeneralManagement andAdministration
Department

Personnel Group
Procurement and AdministrationGroup

Treasury Group
Policy Contract Group

Corporate Planningand Policy Office

Corporate
Governance
Department
Internal Audit Group

Environmental
Guidelines Examiner

Audit & Supervisory Board
Members
Audit & Supervisory Board

Environmental
Guidelines
Examiner
Secretariat

Audit Secretariat

Evaluation
Committee

General Meetingof Shareholders

Board ofDirectors

Business Process
andIT Management
OfficePolicy and Legal Group

Risk Management GroupAccounting Group
Business Process Management
Group

Information System Group
Project Management Group

Customer Support Group
Underwriting
Department

Comprehensive Insurance Group
Overseas Investment Insurance
Underwriting Group

Reinsurance Underwriting Group

Chairman andCEOManagement Group
Structured andTrade FinanceInsurance
Department

Independent
Accounting
AuditorCorporate Planning andInternational Relations GroupManagement
CouncilPower Group
Natural Resources GroupⅠ
Natural Resources GroupⅡ
Infrastructure Group

Asset Management
Department
Corporate
GovernanceCommittee

Claims Service Group
Recovery Group

Credit Analysis Group
Credit Department

Personnel
Committee

Environment GroupCountry Risk Analysis Group
Credit Administration Group

Osaka Branch

Underwriting Group

Paris Representative Office
Overseas Offices

New York Representative Office
Singapore Representative Office〈 Annual Report FY2016
10〈Access Map
Domestic
Offices

Overseas
OfficesHead Office

Paris Representative Officec/o JETRO 27, rue de Berri 75008 Paris, France
Phone: 33-(0)1-4261-5879
Fax: 33-(0)1-4261-5049
About NEXI

Chiyoda First Building, East Wing 5th
Floor, 3-8-1 Nishikanda, Chiyoda-ku,
Tokyo 101-8359 Japan
Phone: 81-(0)3-3512-7650
Fax: 81-(0)3-3512-7660

JR
Suidobashi Sta.

JR Chuo Line
Met

West
EXIT

ropo

Suidobashi
West Ave.

NEXI

Sun Light Bldg.

ve.

uni A

Yasuk

SUBWAY Jinbocho Sta.
Jyounancreditassociation

Sendaimae
Crossing

SubwayHanzomonLine

New York Representative Officec/o JETRO 565 Fifth Avenue, 4th Floor, New York, NY 10017 USA
Phone: 1-212-819-7769
Fax: 1-212-997-0464
B.D.F.M 47-50 street/6th Avenue
Rockefeller
Center 48th Street

NEXI NY

46th Street
45th Street

Osaka Branch

44th StreetthPenn Station 43 Street

Aioi Nissay Dowa Insurance
Yodoyabashi Building 8th Floor, 3-122 Kitahama, Chuo-ku, Osaka City,
Osaka 541-0041, Japan
Phone: 81-(0)6-6233-4019
Fax: 81-(0)6-6233-4001

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

Grand
CentralTerminal

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

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

Higashi-Umeda Sta.
Tanimachi Subway Line

Route1

Midosuji
Subway Line
Hanshin Expressway loop LineOye
Dojima River
BridgeYodoyaBridgeMizunoOsaka City Oﬃce

Yodoyabashi Sta.

Bank ofJapan

Midosuji st.

Higobashi Sta.

Tosabori st.

a Sta.

Tosabori River

Kita-Shinchi Sta.

42th Street
th

Umed

JR Tozai Line.

Sta

NIshi-Umeda Sta. YotsuhashiSubway Line

JR

ka

a
Os

Port Authority

Fifth Avenue

47th Street

Yodoyabashi Sta.

NEXI ,Osaka

Aioi Nissay Dowa Insuarance
Yodoyabashi Building

Keihan Line

Mizuho BankNEXI Singapore〉11
Annual Report FY2016 〉

FY2016 Review of Performance FY2016 Financial Results

ita Sta.

KudanshSubwayShinjuku
Line

Park Avenue

ine
No.5
EXIT

A4
EXIT

A2
EXIT

Vanderbilt Avenue

way

iL

za

To
SenshuUniv.

Madison Avenue

e.

ress

Av

Toei Subway

Mita Line
Ohara
Bookkeeping
SchoolVilla Fontaine
KUDANSHITA

NEXI's Business

Exp

iro
Kitanomaru
SquareHakusan Ave.

Chiyoda First Bldg.
EAST Wing

litan

ej

M
No.7
EXIT

NEXI Paris

East
EXIT

TOPICS ❶When should you consider using Trade Insurance？
Case

Case

2

1

When considering

When considering

making a new

business withinvestment or

a new buyer.

providing a new loan.

Case

Case

3

4
When the export

with long pre-shipment

transaction amountperiods or exportingwith an existing

commodities

customer is expanding.

that are difficult to resell.

Case

Case

５

6
When there is a change
in the payment termfrom advanced payment
to deferred payment.

When considering export

When you wish to hedge
your risks for transactions
with a specific country.

Trade Insurance is useful when faced with new business situations
you have not experienced before.

〈 Annual Report FY2016
12〈NEXI's Business
Trade and Investment Insurance− How It Works …………………………… 14
Insurance Products
to Support Your Business ………………… 15
Application Procedure forTrade and Investment Insurance ……… 22
International Cooperation ……………… 26〉13
Annual Report FY2016 〉

NEXI's Business

Trade and Investment Insurance – How It Works
Trade and Investment Insurance covers risks pertaining to overseas business transactions, such as export/import, overseas investment or
financing conducted by Japanese companies or banks, which cannot be covered by marine insurance.
The purpose of Trade and Investment Insurance is to support and promote the development of overseas business by mitigating the risks
associated with foreign trade and overseas investment.

Governmentof Japan100%
EquityInsurance
Contract

Japanese
Company

Export,Investment,
Financing, etc.

Foreign Countries
ForeignCompanies
Overseas Projects

Trade and Investment Insurance covers the losses incurred by Japanese companies or banks, etc. due to the occurrence of risks such as:Commercial Risk※

Political Risk※
Restriction or suspension imposed on foreign exchange banking
transactions, Restriction or suspension imposed on importState of war, civil war, revolution, etc.
Delay in transmitting foreign currency, caused by paying country
High custom duties imposed, terrorism
Sanctions imposed by UN or foreign countries other thandestination countries
Expropriation
Natural disaster, or any other state of emergency for which any
contracting party has no fault

Non-payment by counterparty extending over 3 months(Except for cases where the exporter is deemed liable for claims
made by counterparty, such as damages or defects.)
Bankruptcy of counterparty
Any cause equivalent to bankruptcy

Unilateral cancellation of export contracts made before theshipment by foreign governments, etc.

(Cover on unilateral cancellation by a private buyer is provided only
under a separate special policy.)

Occurrence of such event

The following losses will be covered:Pre-shipment risk

Post-shipment risk

Overseas investment risk

Losses incurred due tofailure of shipment

Losses incurred due tofailure to collect receivables,
service fees, or loans

Losses on investment assets
as a result of discontinuationor suspension of a joint venture※Political Risk : Risks caused by force majeure events for which the contracting parties have no fault. (Also referred to as Country Risk)※Commercial Risk : Risks caused by  the fault of the contracting opponent. (Also referred to as Credit Risk)〈 Annual Report FY2016
14〈Insurance Products to Support Your Business
NEXI offers the following array of insurance products:｜Insurance Products for Trade
Export Credit Insurance

  Pg.16

Insurance for export, intermediary trade, andtechnical cooperation

Insurance for License Export

This insurance covers the non-payment risk to intellectual
property provided by Japanese companies, such as patents,
know-hows, and copyright royalties.

from Specific Buyer		      Pg.17

Comprehensive Export Insurance with
Simplified Procedure    Pg.17

This insurance covers risks such as pre-shipment risks andnon-payment risks of Japanese companies who export or trade
continually and repeatedly to a number of buyers.

Export Credit Insurance for SMEs and AFF
Sector			   Pg.18

This insurance covers the risk of non-repayment of loans madeby Japanese commercial banks to foreign borrowers to be used
for the purchase of goods imported from Japan.

Overseas Untied Loan Insurance

Pg.19

This insurance covers losses from non-repayment of loans
made by Japanese commercial banks or other entities to foreign
governments or foreign companies for overseas business or
projects, or losses incurred by Japanese commercial banks
or other entities as a guarantor for a loan made by financial
institutions.

Loan Insurance for Natural Resources
and Energy

Pg.20

This insurance covers the risks of non-repayment of loans
made by Japanese commercial banks to projects which benefit
Japan by securing a stable supply of natural resources and energy
or protecting the rights and interests in natural resources owned
by Japanese companies.

Overseas Investment Insurance

Pg.21

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

This insurance covers the risks of non-payment for exports
conducted by Japanese small and medium-sized enterprises(SMEs) and those engaged in the business of agriculture, forestry
and fishery (AFF Sector).

Export Bill Insurance

Pg.18

This insurance covers losses incurred by Japanese commercial
banks due to the buyer’s non-payment of matured bill of
exchange purchased by the bank.

Prepayment Import Insurance

Pg.18

This insurance covers the risks of Japanese importers who
import on advanced payment terms not being refunded of their
payment in the event the shipment does not arrive.
〉15
Annual Report FY2016 〉

FY2016 Review of Performance FY2016 Financial Results

This insurance covers risks such as pre-shipment risks and nonpayment risks of Japanese companies who continually export or
conduct intermediary trade with specific buyers.

Pg.19

NEXI's Business

Trade Insurance for Standing Orders

Buyer’s Credit Insurance

About NEXIThis insurance covers risks such as pre-shipment risks or nonpayment risks pertaining to export, intermediary trade, andtechnical cooperation conducted by Japanese exporters.

Insurance for Investment and
FinancingNEXI's BusinessInsurance Products to Support Your BusinessInsurance Products for Trade｜Export Credit Insurance
Insurance for export, intermediary trade, and technical cooperation
This insurance covers losses incurred when a Japanese company undertaking export, intermediary trade, or providing technicalcooperation such as construction work is unable to export the goods due to (i) force majeure such as war, revolution, terrorism, import
restriction/suspension, or natural disasters, or (ii) bankruptcy of the business counterpart (importer). This insurance also covers losses
incurred when the exporter is unable to collect receivables after shipment or after providing technical cooperation, due to the abovementioned reasons.
ExportExport Credit Insurance

Japanese
Exporter

Unable to export

××Unable to collect

Foreign
Importerreceivables

Intermediary Trade
Foreignmanufacturer(Country A)
Unable to ship

×Japanese
Intermediary
TraderForeignimporter×Unable to collect (Country
B)
receivables(Note) We offer Export Credit Insurance in two separate ways:“Specific Insurance”provides cover for a single business contract, whereas,“Comprehensive Insurance (for business entities)”which provides cover for all business
contracts within the scope described in the policy for the entire company.

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

〈 Annual Report FY2016
16〈Trade Insurance for Standing Orders
from Specific Buyer
Trade Insurance for Standing Orders
from Specific Buyer

Insurance for companies who continually

Scope of coverage provided by NEXI

transact business with specific buyers

Country B
Buyer①Country B
Buyer②

Japanese
ExporterCountry B
Buyer③（Subsidiary）

Country A
Buyer

Insurance cover notavailable depending
on country category
or buyer category.

Comprehensive Export Insurancewith Simplified Procedure

Insurance for companies who transact continually

Scope of coverage
provided by NEXI

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

Country A
Buyer ①Country A
Buyer ②
Japanese
ExporterCountry B
Buyer ③(Note) The risks covered by this insurance are equivalent to those of
Export Credit Insurance.

Commercial risk of the customer’ s subsidiary is not covered.
Not available depending on country category or buyer category.

〉17
Annual Report FY2016 〉

FY2016 Review of Performance FY2016 Financial Results

Comprehensive Export Insurance with
Simplified Procedure

Country A Country C
off-cover off-cover
country Buyer
Buyer

NEXI's Business(Note) The risks covered by this insurance are equivalent to those of
Export Credit Insurance.

About NEXIThe features of this insurance are as follows:◦Setting an insurance claim payment limit to each buyer based on
the estimated transaction value for the year with the buyer.
◦Simplified application procedures: This insurance does not require
insurance application for each export contract. All insurable
export contracts made during the insurance contract period areautomatically covered.

Country B
Buyer④

Scope of coverage desired by exporter

This insurance is suitable for transactions with a buyer or buyers towhom a Japanese exporter repeatedly supplies products.

Credit risk ofexporter’ s
subsidiarynot covered.

NEXI's BusinessInsurance Products to Support Your BusinessExport Credit Insurance for SMEs and
AFF Sector
Insurance for supporting exports conductedby Japanese SMEs and those engaged in theJapanese
SME or AFF

business of agriculture, forestry and fishery
Export Credit Insurance for SMEs and AFF Sector exclusively supports
the export activities of Japanese small and medium-sized enterprises(SMEs) and organizations related to agriculture, forestry and fisheries (AFF
Sector). It covers losses incurred due to inability to collect receivables.
Simple application procedures and speedy payment of insurance claims
are implemented to cater to the needs of SME and AFF customers.
Furthermore, applicants of this insurance who wish to receive a loan
may simultaneously apply for a creation of pledge on the right to claim
insurance.

Export Credit
Insurance
for SMEs and
AFF Sector

Export×

Unable to collectreceivables

Foreign
Buyer

Loan
Creation of Pledge

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

Export Bill Insurance
Japanese
Commercial
Bank×

Unableto Remit
Send Bill

Foreign
Collecting
Bank×Application
for Negotiation

Japanese
Exporter(Drawer)Presentationof Bill

Export Contract

Insolvency

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

〈 Annual Report FY2016
18〈Insurance for Investment and Financing｜Buyer’s Credit Insurance
Insurance for loans, etc. such as for payment of

Buyer’s Credit
Insurance

export goods. (Buyer’s Credit)
JBIC※Japanesecommercial
banks, etc.

Japanese
Exporter×

Unable to Repay
Loans, etc.

Export Contract

Foreign
Importer※NEXI provides the insurance only to Japanese commercial
banks who extend loans etc. in cooperation with the Japan
Bank for International Cooperation (JBIC).

NEXI's Business｜Overseas Untied Loan Insurance
Insurance for loan or bond purchase for overseas

Overseas
Untied Loan Insurance
Japanese
Companyor Bank,etc.※

Loan/Purchaseof Bonds

×

Foreign
Government or
ForeignCompany
Unable to Repay

Insurance for guarantee of obligation
This insurance also covers losses suffered by a Japanese company orcommercial bank※ that extended guarantee to the borrowings, etc. by its
overseas subsidiary, a foreign government or company. The losses may be
incurred when the guarantor fulfilled the obligation because of the failureof repayment of the borrowings due to force majeure including war,
revolution, prohibition of foreign currency exchange, and suspension ofremittance.
※ NEXI may provide cover to foreign companies or banks, etc. who
finance the projects which are particularly needed for the purpose ofpromoting the sound development of Japan’s external transactions(e.g. projects which promote important resource acquisition or which
promote Japanese companies’competitiveness).

Bank

×

Insurance forguarantee ofobligation

Financing,etc.
Unableto Repay

Japanese
Debt Guarantee
Company※or Bank,etc.

Foreign Company
Overseas AffiliatedCompany, Joint
Venture, etc.

〉19
Annual Report FY2016 〉

FY2016 Review of Performance FY2016 Financial Results

business or projectThis insurance covers losses suffered by a Japanese company orcommercial bank※ that provided a foreign government or company withbusiness funds untied to exports from Japan or that purchased bonds
issued by a foreign government or company for the purpose of financing.
The losses may be incurred when the Japanese company or commercialbank is unable to collect the loan or when bonds are not redeemed due toforce majeure including war, revolution, prohibition of foreign currency
exchange, and suspension of remittance or bankruptcy/default of theborrower or the bond issuer.

About NEXIThis insurance covers losses suffered by a Japanese commercial bank orother financial institution as a result of providing loans, etc. (including
bond purchase and surety obligation) to a foreign importer who purchases
goods and services from a Japanese exporter. Losses may be incurred
when the Japanese commercial bank is unable to receive repaymentof the loans or bonds due to (i) force majeure such as war, revolution,prohibition of foreign currency exchange, suspension of remittance andnatural disaster or (ii) bankruptcy or default of the importer. The financial
terms and conditions for the loan agreements, etc. must be in line withinternational agreements. (See Page 28.)

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

Japan

Overseas resource project company

Offtaker

Off-take
Production
facility
Miningconcession

Proceeds fromresource sales

Borrowings
Subordinatedloan
Shareholder’sequityEscrow Account at
a first-class bankin developed country

Lending
Senior loan
Investment and
Loan Insurance for
Natural Resources

Japanese Banks andFinancial Institutions

Energy andresources

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

〈 Annual Report FY2016
20〈｜Overseas Investment Insurance
Insurance for investment (equity investment, etc.)

Investment

Foreign Company
Overseas AffiliatedCompany, Joint
Venture, etc.

× Unable toRemit Dividends

×Discontinuation ofBusiness Activities※NEXI can provide cover for premium (goodwill, etc.) paidby an investor to secure a stake in natural resources orto become a shareholder.

Overseas
Investment
Insurance

Overseas
Investment
Insurance
Country Y

Country A

Japanese
Company

×Discontinuationof Business

Investment

Activities

Subsidiary

Country B
Investment

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

Overseas
Investment
Insurance

Subsubsidiary
B

Overseas
Investment
Insurance
Country Y
Investment
出資

×Japanese
Company

Investment
Subsidiary

Subsubsidiary
A

×Discontinuationof Business
Activities

出資
Investment

SubsubsidiaryB

In addition to the above mentioned Overseas Investment Insurance, which mainly provides cover on investments (equity investment,etc.), there is another type of Overseas Investment Insurance which covers rights and acquired profits (real estate, etc.).
〉21
Annual Report FY2016 〉

FY2016 Review of Performance FY2016 Financial Results×

SubsubsidiaryA

Investment

NEXI's Business

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

Japanese
Company

About NEXIThis insurance covers losses suffered by a Japanese company
with a subsidiary or a joint venture in a foreign country. The
losses are incurred when the relevant subsidiary or the joint
venture is forced to discontinue business due to force majeuresuch as war, terrorism and natural disasters. The insurance also
covers losses incurred when a Japanese company is unable toremit dividends to Japan due to prohibition of foreign currency
exchange or suspension of remittance.

Overseas Investment
Insurance

NEXI's Business

Application Procedure for Trade and Investment Insurance
Making an application
The chart below describes the application procedure summary for Export Credit Insurance.

If you are a first-time user of Export
Credit Insurance, it is necessary toregister for an Insurance User Code
(Shipper Code).
※If you have your shipper code already,re-registration is not necessary.

Consideration of whether or not
to use insurance

Trade Insurance User (Shipper)
Registration

Presentation of estimatedpremium amount・
Buyer credit review
Credit rating registration〈 Annual Report FY2016
22〈Already registered

As it may take some time tocomplete our review, please makesure you consult with us well inadvance. Especially, in the case ofloan agreements or overseas investments with repayment periods
exceeding two years, we determine
whether or not we can accept yourinsurance application by conducting
an investigation on a case by casebasis, and thus prior consultation at
an early stage is very important.

Not yet registered

Foreign buyer registration

Trade insurance user (shipper)
registration

Prior consultation

Prior Consultation

Foreign Buyer Registration

Before applying for our insurance, registration of your business counterpart (counterparty toexport contract or payer including
an ILC bank) is necessary.

Insured period

Head Office Underwriting Department
Customer Service Group
Toll Free 0120-671-094
Comprehensive Insurance Group
Toll Free 0120-675-094
Osaka Branch Office Underwriting Group
Toll Free 0120-649-818

You will also find more information on
insurance application procedures on
our website.
(http://www.nexi.go.jp)〉23
Annual Report FY2016 〉

FY2016 Review of Performance FY2016 Financial Results

Please contact the following numbers formore detailed information or inquiries.

NEXI's Business

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

The application period is 5 businessdays from the shipment date (after
the contract date). The insurer's
obligation period starts after theapplication.

First day of insured period

Insurance application date /Insurance contract date

Date of export contract

Insurance Application Period

Elimination
Period (5 days)

Coverage fornon-payment risks

About NEXI

Coverage forpre-shipment risks

NEXI's Business

Application Procedure for Trade and Investment Insurance
Insurance claim payment
The chart below describes the procedure summary for Export Credit Insurance.
Delegation of Authority to Exercise Rights

At the time of making insurance claims, the insured needs to delegate
authority to NEXI in exercising all rights as creditor under the export
contract. (For other insurance types, the delegation of authority may
be after claims payment.)

Covenant for loss prevention

Deadline for insurance claim

Delegation of authority to NEXI

Claim for insurance

Deadline for notificationof loss event

Occurrence of insured event

Occurrence of event that
may lead to loss

Insurance contract date

Claimspayment

In principle, claims payment
will be made within 2 months
from the date of insurance
claim.

Notification of event that may
lead to loss

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

Notification of insured event

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

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

〈 Annual Report FY2016
24〈Maximize
About NEXI

Expedite

Enhance efficiency
Ensuring recovery
utilizing various meansof recovery

Distribution of recoveries

Termination of recovery activity

FY2016 Review of Performance FY2016 Financial Results

Determination of appropriate recovery policy

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

Parties to conduct actual recovery

NEXI and the government of Japan (Negotiations with the debtor country at Paris Club, etc.)
NEXI’s partner collection agencies
InsuredCovenant for the insured (NEXI customer) to cooperate in recovery efforts

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

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

NEXI's Business

Recovery stage

For more details, please contact thefollowing numbers:
Asset Management Department
Toll-Free 0120-673-094
Claims Service Group 03-3512-7663
Recovery Group
03-3512-7658〉25
Annual Report FY2016 〉

NEXI's Business

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

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

EuropeOne-Stop-Shop Reinsurance Agreements
Italy

Servizi Assicurativi Del Commercio Estero（SACE）

2002

Netherlands

NCM※1

2002

Belgium

Ducroire / Delcredere (ONDD) ※5

2002

Germany

Hermes Kreditversicherungs-Aktiengesellschaft (HERMES)※2

2003

Austria

Oesterreichische Kontrollbank Aktiengesellschaft (OeKB)

2003

Finland

FINNVERA PLC (Finnvera)

2004

Spain

Compañía Española de Seguros de Crédito a la Exportación (CESCE)

2005

Switzerland

Swiss Export Risk Insurance (SERV)

2007

FranceBanque Publique d'Investissement (BPifrance)

2016

Czech Republic Export Guarantee and Insurance Corporation (EGAP)

Short-term Reinsurance Agreements
RussiaCooperative Agreements
FranceUK
Germany

Japanese
Company

DREE

2016

1995

Banque Publique d'Investissement (BPifance)

2016

Export Credits Guarantee Department (ECGD) ※4

1995

HERMES※2 / C&L

1996

KfW Bankengruppe (KfW)

2011

ExportProviding reinsurance
for the portion of export bya Japanese Company

Foreign
ECA

Russian Agency for Export Credit and Investment Insurance (EXIAR)

2017

Consortium agreement

Providing export
credit insurance
for the entire
export transaction

ForeignCompany

Exportcontract
ExportThirdCountry
Buyer

Short-term Reinsurance Agreement
NEXI has concluded reinsurance agreements with ECAs in Asia andother regions in order to support export to third countries by Japanesecompanies located in Asian and other countries. This agreement elevates
the underwriting capacity of ECAs in Asia and other regions and further
facilitates Japanese companies to utilize export credit insurance of ECAs
in Asia and other regions to mitigate their international trade risks.
Reinsurance
Contract

ECAs inothercountries

AfricaExport Credit
Insurance

Japanese
Affiliate
Company

Export, etc.

Cooperative Agreements
バイヤー
Buyer

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

Other Cooperative Relations
NEXI has bui lt long-ter m rel at ionships w it h B er neUnion members and international organizations throughmemorandums of understanding (MOUs) and other agreements.
〈 Annual Report FY2016
26〈South Africa

Export Credit Insurance Corporation (ECIC SA)

2005

Middle East
Cooperative Agreements
TurkeyExport Credit Bank of Turkey (TURK EXIMBANK)

IsraelIsrael Foreign Trade Risks Insurance Corporation (IFTRIC) 1997

1996

Abu Dhabi

Mubadala Development Company PJSC (MDC)

2008

Iraq

Ministry of Finance of Iraq

2011

Iraq

Trade Bank of Iraq (TBI)

2011

Iran

Ministry of Economic Aﬀairs and Finance of the Islamic Republic of Iran 2016

Reinsurance Agreements with European and U.S. private-sector insurers
Euler Hermes Deutschland AG (private sector)

2013

COFACE (private sector)

2014

American International Group, Inc. (AIG)2015

Tokio Marine HCC（HCC）

2016

North America
One-Stop-Shop Reinsurance Agreements

Austria

Oesterreichische Kontrollbank Aktiengesellschaft (OeKB) 1996

Italy

Servizi Assicurativi Del Commercio Estero (SACE)

1996

USA

FinlandFinnish Guarantee Board (FGB)※3

1996

Netherlands

NCM※1

1996

Short-term Reinsurance Agreements

Belgium

Ducroire / Delcredere (ONDD)※5

1997

Spain

Compañía Española de Seguros de Crédito a la Exportación (CESCE)

2000

Uzbekistan

Uzbekinvest National Export Import Insurance Company (UZBEKINVEST) 2007

UkraineThe State Export-Import Bank of Ukraine (UKREXIMBANK) 2009

RussiaBank for Development and Foreign Economic Aﬀairs (VEB) 2009

BelarusBelarusbank

2009

RussiaExport Insurance Agency of Russia (EXIAR)

2013

Czech Republic Export Guarantee and Insurance Corporation(EGAP)
Kazakhstan

State Insurance Corporation for the Insurance of Export
Credit and Investment (KEG)※6

2015

Export Development Canada (EDC)2012

Cooperative Agreements
USA

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

CanadaExport Development Canada (EDC)

1997

USA

The United States Department of Energy (DOE)

2009South America
Cooperative Agreements

2006※Currently the names of the institutions below have been changed as follows:※１…NCM=Currently ATRADIUS ※２…HERMES=Currently EULER HERMES GERMANY※３…FGB＝Currently FINNVERA ※４…ECGD=Currently UKEF
※５…ONDD=Currently Credendo ※６…KEG=Currently Kazakh Export

BrazilCompanhia Valedo Rio Doce (VALE)

2008

BrazilPetroleo Brasileiro S.A. (PETROBRAS)

2008

BrazilBanco Nacional de Desenvolvimento Economico e Social (BNDES) 2009

About NEXI

Turkmenistan The State Bank of Foreign Economic Aﬀairs of Turkmenistan (TFEB) 2015

CanadaExport-Import Bank of the United States (US EXIMBANK) 2004

NEXI's Business
FY2016 Review of Performance FY2016 Financial Results

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

Asia/Oceania
One-Stop-Shop Reinsurance Agreements
Australia

Export Finance and Insurance Corporation (EFIC)

2005

Korea

Korea Trade Insurance Corporation (KSURE)

2011

Short-term Reinsurance Agreements
Singapore

ECICS Limited (ECICS)

2004

Malaysia

Export-Import Bank of Malaysia Berhad (MEXIM)

2006

Indonesia

Asuransi Ekspor Indonesia (ASEI)

2009

ThailandExport-Import Bank of Thailand (THAI EXIMBANK)

2009

TaiwanTaipei Export-Import Bank of China (TEBC)

2010

Hong Kong

Hong Kong Export Credit Insurance Corporation (HKECIC)

2012

Cooperative Agreements
Korea

Korea Export Insurance Corporation (KEIC)※7

1994

Singapore

ECICS Limited (ECICS)

1997

TaiwanTaipei Export-Import Bank of China (TEBC)

2005

Indonesia

Asuransi Ekspor Indonesia (ASEI)

2008

China

SINOSURE

2009

Vietnam

PETROVIETNAM

2010

Vietnam

Ministry of Finance of Vietnam

2014

Indonesia

PT Pertamina (Persero)

2015※７…KEIC=Currently KSURE

International Organization
Cooperative Agreements

The European Bank for Reconstruction and Development (EBRD)

1997

Multilateral Investment Guarantee Agency (MIGA)

1999

Export Credit Agencies and Export Financing Institutions of APEC (12 countries and 15 organizations)

1997

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

2008

〉27
Annual Report FY2016 〉

TOPICS ❷Organization for Economic Co-operation and Development（OECD）
Working Party on Export Credits and Credit Guarantees(ECG Meeting and Participants Meeting)
OECD was established in 1961 to discuss various issues of global economy and Japan has been amember since April 1964. The Working Party on Export Credits and Credit Guarantees (ECG) operates
under the OECD Trade Committee, discussing issues within the field of export credits including insurance
provided by NEXI. In addition to discussion on financial conditions for officially supported export credits,
ECG has also focused on responsibility of ECAs on social issues such as the environment andanti-bribery.
As a Japanese ECA, NEXI is actively participating in the discussions in cooperation with the Japanese
government such as METI.

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

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

Anti-bribery Measures
Based on the Convention on Combating Bribery of Foreign Public Officials in International Business,transactions adopted in 1997 and the OECD Council Recommendation on Bribery and OfficiallySupported Export Credits in 2006, created to combat bribery in officially supported export credits, NEXI
is taking appropriate measures to deter bribery in international business.

〈 Annual Report FY2016
28〈FY2016 Review of
Performance
Performance Highlights …………………… 30
Review of Performance …………………… 36
Business Overview ………………………… 40
Underwritten Projects …………………… 46
Underwritten Projects（SMEs related）…… 52＊FY2016 Review of Performance is a review on performance of Nippon
Export and Investment Insurance as Incorporated Administrative Agency.

〉29
Annual Report FY2016 〉

FY2016 Review of Performance

FY2016 Performance Highlights｜Export Trends
Japanese exports in FY2016 declined for the second consecutive year to approximately JPY 71.5 trillion (down by 3.5% comparedto the previous fiscal year) mainly due to a decrease in steel and car exports. By region and country, exports to Asia declined by 2% toapproximately JPY 38.4 trillion, of which exports to China accounted for approximately JPY 12.8 trillion (down by 1.3% compared to theprevious fiscal year). Exports to the U.S. and EU also declined, to approximately JPY 14.1 trillion (down by 6.5%) and approximately JPY 8
trillion (down by 1.5%) respectively.
Japan’s exports(Millions of Yen)

Total Exports

FY2011FY2012FY2013

FY2014FY2015FY201665,288,487

63,939,981

70,856,464

74,667,048

74,115,132

71,525,306

（3.7）

（2.1）

10.8

5.4

（0.7）

（3.5）

Year-on-Year Change (%)(Source: Trade Statistics, Ministry of Finance)｜Trends of the Trade and Investment Insurance Program(Billions of Yen)
300

200

100

0
‒100

Outstanding Borrowings
JPY 0 yen

‒200

Peak of
Insurance Claims Payments
JPY 341.9 billion

‒300
‒400

Premium income‒500

Recoveries and other income‒600

Claims paid

Peak of
Outstanding Borrowings

Outstanding borrowings at year-end

JPY 688.6 billion‒700

Fiscal Year '81 '82 '83 '84 '85 '86 '87 '88 '89 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10
PremimincomeRecoveries andother income

'15

'16

32.8 37.3 34.1 41.3 46.8 33.4 30.4 21.3 34.2 44.8 35.7 44.7 46.2 44.1 43.5 41.0 46.0 45.4 33.2 32.9 37.3 31.3 43.2 38.0 43.8 34.9 36.8 39.3 38.2 34.4 37.7 36.2 40.6 74.6 51.2

24.5

5.5

12.3

3.7

2.4

3.8

Outstanding borrowings at year-end

0

0

0

ー

'12

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
ー

'11

ー

ー

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

Note: The amount is based on cash.

〈 Annual Report FY2016
30〈

0

0

0

0

0

0

17.2 10.4
0

0

'13

'14

31.4 35.7 40.9 44.5

8.6

8.4

4.4

12.2

0

0

0

0

3.1 22.4

7.8

0

0

0

(Billions of Yen)

｜Underwritten AmountUnderwritten Amount by Insurance TypeThe total underwritten amount in FY2016 was approximately JPY 7 trillion, down by 11.2% compared to the previous fiscal year. Export
Credit Insurance declined to approximately JPY 5.4 trillion (down by 11.8% compared to the previous fiscal year) due to declining steel andcar transactions underwritten during the fiscal year, while Overseas Untied Loan Insurance increased to approximately JPY 0.9 trillion (upby 108.1%) as a result of underwriting of large-scale projects.
(Fiscal Year)

6.2

2013

0.1

0.5

6.8

2014

7.0
6.2

2016

5.4

0

0.5
0.1 0.3

0.9

0.6

0.5

0.3 10.2

2.2

7.8

0.4 0.2

0.2 7.0

6
Buyer s Credit Insurance

0.2 8.5

0.7

0.3

4

Export Credit Insurance

0.6

8

Overseas Investment Insurance10（Trillions of Yen）

Overseas Untied Loan Insurance

Other Insurance Types

Underwritten Amount by Region
Asia continued to be the largest in this fiscal year too, with 57.9% (approximately JPY 4.3 trillion) of the total amount, followed by Central
America with 9.9% (approximately JPY 0.7 trillion). The Middle East declined significantly by 48.9% compared to the previous fiscal year
to JPY 0.6 trillion in reaction to underwriting of a large-scale project in the previous fiscal year.
(Fiscal Year)

2015

51.8

2016

9.2

9.5

57.9

0

20
CentralAmerica

Asia

9.9

40

EuropeMiddle
East

13.1

7.9

60

5.0

4.0 2.4 1.3

5.0

3.8 3.5 2.7 1.8

100 （%）

80

South
America

Africa

7.6

3.8

North
America

International
Organizations

Oceania

Top Ten Countries and Regions for Underwritten Amount in FY2016(Millions of Yen)Country/Region

Underwritten
Composition
amountCountry/Region

Underwritten
Composition
amount1

Indonesia

1,484,402

20.0%

6

Belgium

236,895

3.2%

2

China

558,417

7.5%

7

U.S.A.

235,349

3.2%

3

Thailand

456,426

6.1%

8

Singapore

211,331

2.8%

4Panama (flag of convenience vessel)

397,598

5.3%

9

Taiwan194,103

2.6%

5

Korea

298,154

4.0%

10 Hong Kong

164,2862.2%〉31Annual Report FY2016 〉

FY2016 Review of Performance FY2016 Financial Results※Other Insurance Types ＝ Export Bill Insurance, Prepayment Import Insurance, Trade Insurance for Standing Orders from Specific
Buyer, Export Credit Insurance for SMEs and AFF Sector, Comprehensive Export Insurance with Simplified Procedure, Reinsurance

NEXI's Business2015

0.1 8.3

1.4
0.2

About NEXI2012

FY2016 Review of Performance

FY2016 Performance Highlights｜Outstanding Commitment
Outstanding Commitment by Insurance TypeThe total outstanding commitment at the end of FY2016 declined by 2.7% to approximately JPY 15.7 trillion compared to the previous
fiscal year.
(Fiscal Year)

2012

8.2

2013

8.5

1.0

1.1
1.3

1.4

8.8

1.7

1.5

2015

8.7

1.7

1.6

8.2

0

1.6

4

Export Credit Insurance

0.8 16.5

3.7

0.8 16.2

3.4

1.5

8

Buyer s Credit Insurance

0.5 14.3

2.6

2014

2016

0.4 12.9

2.2

3.6

0.9

12

Overseas Investment Insurance

15.7
16（Trillions of Yen）

Overseas Untied Loan Insurance

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

Outstanding Commitment by Region
The outstanding commitment for Asia continued to be the largest at approximately JPY 7.6 trillion (47.4% of the total amount), followedby the Middle East at approximately JPY 2.4 trillion or 14.7%.
(Fiscal Year)

2015

44.8

2016

16.5

47.4

0
Asia

14.7

20
MiddleEast〈 Annual Report FY2016
32〈Europe40
North
America

10.4

6.5

5.0

4.9

5.8

4.6 1.5

9.0

6.1

5.5

5.5

5.3

4.7 1.860
AfricaCentralAmerica

100 （%）

80
South
America

OceaniaInternational
Organizations

｜Premium Income
Premium income in FY2016 declined by 9.6% compared to the previous fiscal year to approximately JPY 46.5 billion.
(Fiscal Year)

2012

38.8

2013

32.0

2014

73.7

About NEXI

2015

51.5

2016

46.5
0

20

40

60

80 (Billions of Yen)

(Note) For details please see page 38.

Export Bill Insurance 0.2%

Trade Insurance for Standing
Orders from Speciﬁc Buyer 0.4%

Comprehensive Export Insurancewith Simpliﬁed Procedure 0.2%

Reinsurance 1.1%

Export Credit Insurance for SMEs
and AFF Sector 0.2%

Buyer s Credit Insurance 7.3%
Overseas Investment
Insurance 11.3%

Overseas Untied
Loan Insurance

47.4%

Export Credit
Insurance

31.9%｜Recoveries
The amount of recoveries in FY2016 was approximately JPY 44.5 billion, up by 8.8% compared to the previous fiscal year. Recoveries ofclaims associated with political risk events, including debt rescheduling, accounted for 99.3% of the total recoveries. The remaining 0.7%
was associated with commercial risk events.
(Fiscal Year)

2012

23.5

2013

0.5 24.0
30.9

2014

0.5 31.4

32.1

2015

3.6

35.7

40.7

2016

0.2 40.9
44.1

0

20

25

0.3

30

35
Political Risk Events

40

44.5
45 (Billions of Yen)

Commercial Risk Events〉33
Annual Report FY2016 〉

FY2016 Review of Performance FY2016 Financial Results

Overseas Untied Loan Insurance earned the largest
premium income of JPY 22.0 billion (47.4% of the total
amount) in FY2016, followed by Export Credit Insurancewith approximately JPY 14.8 billion (31.9%) and Overseas
Investment Insurance with approximately JPY 5.3 billion(11.3%).

NEXI's BusinessPremium Income by Insurance Type

FY2016 Review of Performance

FY2016 Performance Highlights｜Claims Paid
Claims paid in FY2016 declined by 65.3% to approximately JPY 7.8 billion compared to the previous fiscal year, in reaction to claims paidin the previous fiscal year to indemnify a large-scale political risk event.
(Fiscal Year)

2012

0.4

2013

0.4

2014

0.9

4.0

4.4
11.8

2.2

12.2

3.1

2015

18.6

2016

1.0

22.4

7.8

6.8

0

3.8

5

10

15

20

Political Risk Events

25 (Billions of Yen)
Commercial Risk Events

Insurance Claims Paid (by Region)
In terms of region, the amount of claims paid for Asia was the largest at approximately JPY 3.7 billion (47.1% of the total amount).
Political/Commercial Risk
Oceania
3.0%

Europe3.1%
North America
6.5%
Middle
East
11.2%

Asia
47.1%

Africa11.4%

Political Risk

Commercial Risk

Middle East
2.9%

South
America
32.0%

South
America
17.8%

Europe
3.6%

Africa3.4%

North America
7.4%
MiddleEast
12.4%

Africa65.2%

SouthAmerica
15.7%

Top Five Countries/Regions with the Largest Insurance Claims Paid
(Millions of Yen)Country/Region

Total

Political Risk

Commercial Risk

1

Vietnam

2,037

0

2,037

2

Chile

1,060

0

1,060

3

Singapore

905

0

905

4

United Arab Emirates

843

0

843

5

Nigeria

824

651

173

〈 Annual Report FY2016
34〈Oceania
3.4%

Asia
54.0%

Insured Events in FY2016(Based on the data as of May 15, 2017)｜Occurrence of Events by Risk ―Year-on-Year Change―
The reported occurrences of risk events totaled JPY 33.5 billion. Reported political risk events remained more or less unchanged
compared to the previous fiscal year, as fewer risk events were reported in Africa while a large-scale risk event was reported in SouthAmerica. Reported commercial risk events increased due to substantial amount of payment arrears resulting from public buyers’
procedural delays.
Claims paid for political risk events declined compared to the previous fiscal year as no large-scale claims were made during this fiscal
year. On the other hand, claims paid for commercial risk events increased due to delay in performance of obligations.
(Millions of Yen)FY2014

Political Risk Events

FY2015
10,563

Commercial Risk Events

20,127

Amount Total

30,322

Political Risk Events
Commercial Risk Events

3,102

ClaimsPaid

Amount Total

9,506（10.0）

15,57324,026

54.3

26,13633,532

28.3

867

18,5711,000（94.6）

2,235

3,824

6,782

77.4

22,395

7,782（65.3）※There are some cases where debts are paid after reporting of occurrence of a risk event, resulting in no claims made or claims made next
fiscal year. There are therefore some gaps between the amount of occurrence of events and amount of claims paid.

Occurrence of Events and Claims Paid

(FY2014 – FY2016)

Political Risk Events
10,195867

2014

10,563

2015

2016
0

18,571

9,506

1,000
5,000

10,000Commercial Risk Events

20,127

2,235

2015

15,00020,00015,573

3,824

2016

Occurrence of Events(Millions of Yen)

24,026

6,782
0

5,000

Claims Paid

10,00015,00020,00025,000Occurrence of Events

30,000Claims Paid

｜Occurrence of Events by Region
Approximately 90% of political risk events in FY2016 occurred in South America as large-scale risk events. The remaining 10% occurredin Africa and Asia (including the Middle East). Risk events in South America included events associated with natural disasters (earthquake,
red tide, etc.).
Occurrence of Events by Region (FY2016)
Political Risk Events（Millions of Yen）

10,000

8,226

8,000

Commercial Risk Events
20,00012,000

4,000

8,000

0

242

M

/
Asia
East
iddle

0
e

0

d
h
h an
Sout
Nort rica
rica
e
Ame
l Am
a
r
t
n
e

p
Euro
C

16,97316,000

6,000

2,000

（Millions of Yen）

1,037
a

Afric

3,885

4,000
0

ania
Oce

1,182

0
M

/
Asia
East
iddle

e

999

721

d
h
h an
Sout
Nort rica
rica
e
Ame
l Am
a
r
t
n
e

p
Euro

a

Afric

266

ania
Oce

C

〉35
Annual Report FY2016 〉

FY2016 Review of Performance FY2016 Financial Results

2014(Millions of Yen)

NEXI's Business

10,195

Occurrenceof Events

Year-on-Year
Change (%)

FY2016

About NEXI

Type of Risk

FY2016 Review of Performance

FY2016 Review of Performance｜Underwritten AmountUnderwritten Amount by Insurance Type(Millions of Yen)
Type of Insurance

Composition(%)

Year-on-Yearchange（％）

FY2012FY2013

FY2014FY2015FY2016

6,151,894

6,849,345

6,965,265

6,169,724

5,444,109

78.3（11.8）One year or less

3,451,195

3,855,361

3,855,510

3,217,940

2,754,179

39.6（14.4）

More than one year

2,700,699

2,993,984

3,109,755

2,951,783

2,689,930

38.7

（8.9）

Buyer's Credit Insurance

123,290

193,845286,390489,827

113,5971.6（76.8）

Export Bill Insurance

12,295

14,153

12,008

13,795

11,6140.2（15.8）

1

5

84

454

99

0.0

（78.2）

Overseas Investment Insurance

530,106

611,679

471,487

571,993

323,045

4.6（43.5）

Overseas Untied Loan Insurance

1,369,370

706,030

2,173,094

437,326

910,078

13.1

108.1

Trade Insurance for Standing Orders
from Specific Buyer

9,331

7,420

8,134

5,383

5,384

0.1

0.0

Export Credit Insurance

Prepayment Import Insurance

Export Credit Insurance for SMEs
and AFF Sector

1,304

2,740

4,332

9,223

9,516

0.1

3.2

Comprehensive Export Insurancewith Simplified Procedure

19,162

23,58937,17340,754

48,121

0.7

18.1

Reinsurance

83,311

108,365

207,007

94,00889,1981.3（5.1）

8,300,064

8,517,171

10,164,974

7,832,488

6,954,763

100.0（11.2）

Total(Note 1) The underwritten amount is based on the amount as determined at the signing date of an insurance contract. The total is based on the actual
underwritten amount calculated by applying the exchange rate of the insurance contract date, not the insured amount based on the insurance
option for transactions in foreign currency. (The same applies to the table below.)(Note 2) In accordance with the BU rules, Export Credit Insurance with credit terms of more than one year includes figures on insurance for capital
goods, even if the credit period is one year or less. (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 amount calculatedusing the maximum rate (20% per annum). (The same applies to the table below.)

Underwritten Amount by Region(Millions of Yen)
RegionComposition(%)

Year-on-Yearchange（％）

FY2012FY2013

FY2014FY2015FY2016

4,003,749

4,694,526

4,550,431

4,355,905

4,301,688

57.9

（1.2）

Middle East

591,102926,125

1,294,219

1,102,195

563,277

7.6（48.9）

Europe795,756

1,029,919

1,040,255

796,639

583,6677.9（26.7）

North America

293,729

332,822

1,563,728

337,919

258,849

3.5（23.4）

Central America

903,421733,386

714,656

776,265

737,377

9.9

（5.0）

South America

883,707569,857

762,599

419,867

281,2253.8（33.0）

Africa447,219494,062

588,410316,201

372,290

5.0

17.7

Oceania

833,730

259,023

107,481

113,280

134,017

1.8

18.3

International Organizations

167,972

155,064

266,871

198,002202,747

2.7

2.4

Asia

(Note 1) Classification used to compute the above amount: Pre-shipment: Country of the shipment consignee; Post-shipment: Country of the payer (orcountry of the guarantor when guaranteed).
(Note 2) The amount includes transactions that are doubly computed, i.e., for both pre-shipment (country of the consignee) and post-shipment (countryof the payer).
(Note 3) The amount is classified under International Organizations instead of regions when guaranteed by an international organization.
(Note 4) Central Asia is included in Asia. (The same applies hereafter.)(Note 5) Central and Eastern Europe and Russia are included in Europe. (The same applies hereafter.)〈 Annual Report FY2016
36〈｜Outstanding Commitment (As of fiscal year end)
Outstanding Commitment by Insurance Type(Millions of Yen)
Type of Insurance

Composition(%)

Year-on-Yearchange（％）

FY2014FY2015FY20168,167,551

8,495,228

8,787,636

8,668,299

8,228,003

52.3

（5.1）

One year or less

3,097,421

3,569,810

3,750,003

3,333,628

2,919,982

18.6（12.4）

More than one year

5,070,130

4,925,418

5,037,633

5,334,671

5,308,021

33.7

（0.5）

1,032,720

1,320,215

1,652,424

1,707,182

1,572,559

10.0

（7.9）

3,336

3,810

3,628

4,274

4,083

0.0

（4.5）

0

0

82

301

2

0.0

（99.4）

Overseas Investment Insurance

1,117,154

1,399,630

1,532,427

1,629,657

1,505,887

9.6

（7.6）

Overseas Untied Loan Insurance

2,241,104

2,600,398

3,706,172

3,372,761

3,568,782

22.7

5.8

Trade Insurance for Standing Orders
from Specific Buyer

15,34012,172

10,718

9,483

7,335

0.0

（22.7）

499

978

1,638

3,287

3,046

0.0

（7.3）

5,959

8,671

15,283

13,772

16,1360.1

17.2

330,785

481,361

753,112748,522821,880

5.2

9.8

12,914,446

14,322,464

16,463,122

16,157,539

15,727,713

100.0

（2.7）

Export Credit Insurance

Buyer's Credit Insurance
Export Bill Insurance
Prepayment Import Insurance

Export Credit Insurance for SMEs
and AFF Sector

Comprehensive Export Insurancewith Simplified Procedure

Reinsurance
Total

Outstanding Commitment by Region(Millions of Yen)
RegionComposition(%)

Year-on-Yearchange（％）

FY2012FY2013

FY2014FY2015FY2016

Asia

5,591,707

6,603,603

7,522,859

7,408,459

7,632,828

47.4

3.0

Middle East

1,852,988

1,889,077

2,322,733

2,717,377

2,366,263

14.7（12.9）

Europe1,778,936

1,869,743

1,978,460

1,723,385

1,447,178

9.0（16.0）

North America

375,726

474,068

1,102,231

1,068,542

984,374

6.1

（7.9）

Central America

620,925642,637

710,345814,936

877,224

5.5

7.6

South America

1,050,016

1,059,399

1,215,882

955,999

859,829

5.3（10.1）

Africa788,076815,499

969,552

828,640

884,574

5.5

6.8

Oceania

1,092,066

1,198,756

834,769

756,155

750,154

4.7

（0.8）

202,893

246,227

247,975

247,502285,255

1.8

15.3

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

※As the FY2015 Outstanding Commitment indicated in this FY2016 Annual Report reflects corrections made after the publication of
FY2015 Annual Report, part of the figures are different from the ones in the FY2015 Annual Report.

〉37
Annual Report FY2016 〉

FY2016 Review of Performance FY2016 Financial Results(Note 1) The total amount is calculated based on the actual insured amount by using the exchange rate as determined at each fiscal year-end (including
the outstanding amount underwritten in previous years), not the insured amount based on the insurance option for transactions in foreign
currency. (The same applies to the table below.)(Note 2) The floating interest coverage option of Buyer's Credit Insurance is evaluated with an amount calculated using the maximum rate (20% perannum). (The same applies to the table below.)

NEXI's Business

FY2013

About NEXIFY2012

FY2016 Review of Performance

FY2016 Review of Performance｜Premium Income
Premium Income by Insurance Type(Millions of Yen)
Type of Insurance

FY2012

Export Credit Insurance

One year or less

FY2013

Buyer's Credit Insurance

15,18813,858

14,838

6,918

7,703

8,941

8,777

9,598

5,612

132

0

Overseas Investment Insurance

Overseas Untied Loan Insurance

4,471

321

263

17,92438

Comprehensive Export Insurancewith Simplified Procedure

Reinsurance
Total

0

3

24

39

83

281

31,99485

7,840

73,679（74.1）

0.0（86.5）

0.2

11.3

166

0.4

22,04451,46946,516（16.9）
（9.3）

47.4

85

3,038

9.4

7.3

5,264

105

3.1

20.6

0

99

7.1

11.3

109

194

Year-on-Yearchange
（％）

31.9

3,378

5,802

15,231

Composition
(%)

5,240

131

38,514

3,771

38,797

13,030

5,035

43

3,207

6,586

6,078

12

Export Credit Insurance for SMEs
and AFF Sector

5,081

111

0

3,718

Trade Insurance for Standing Orders
from Specific Buyer

6,247

3,899

111

Prepayment Import Insurance

FY2016

13,315

1,524

Export Bill Insurance

FY2015

11,943
5,025

More than one year

FY201444.7（14.7）

0.2

2.5

0.2

526

6.2

1.1

（82.7）

100.0

（9.6）

(Note 1) Unlike the underwritten amount that is based on the insurance contract date, the premium income is recorded at the start of the insurer’s
obligation period. The premium income and underwritten amount may be recorded in different fiscal years.

｜Insurance Claims Paid
Insurance Claims Paid (by Insurance Type and by Risk)
Type of Insurance
Export Credit Insurance
Buyer's Credit Insurance
Export Bill Insurance
Prepayment Import Insurance
Overseas Investment Insurance
Overseas Untied Loan Insurance
Trade Insurance for Standing Orders
from Specific Buyer
Export Credit Insurance for SMEs
and AFF Sector
Comprehensive Export Insurancewith Simplified Procedure

Reinsurance

FY2013

FY2014FY2015

Political Commercial

Political Commercial

Political Commercial

Political Commercial

3,079

424

2,655

9,675

0

9,675

2,709

582

3

0

3

14

0

14

0

0

1,165
0
0
0

168
2
0
0

4,416

Total

(Millions of Yen)FY2016FY2012

0
0
0
0

1,165
0
0
0

1,723
0
0
0

0

168

368

0

0

17

0
0

424

2
0

0

436

3,993 12,234

0
0
0
0

1,723
0
0
0

0
0
0
0

0

368

99

0

17

8

0
436

0
0

436 11,798

1

285

3,102

0
0
0
0

2,127 21,926 18,571
0

0

0

0

0

0

0
0
0

0
0
0

0

99

221

0

8

0

0
285

1
0

2

245

0
0
0

3,355

3,499

1,000

2,499

0

31

0

31

0
0
0

136

245

2,943

0

2,235 22,395 18,571

0

2

0

867

0

1,047

221

0

114

0

0
0

Political Commercial

3,824

0

13

7,782

0
0
0

114
0
0

0

1,047

0

136

0

2,943

0
0
1,000

0

13

6,782

Composition Year-on-Year(%)
change（％）

45.0 （ 84.0）
1.5

-

0.0

-

0.4
0.0

13.5

-

0.0 （100.0）
1.7 5,687.2
0.2 3,518.9

37.8 1,099.6

100.0 （65.3）

Insurance Claims Paid (by Region)
RegionAsia

Middle East
EuropeNorth America

Central America
South America

FY2013

FY2014FY2015

Political Commercial

Political Commercial

Political Commercial

Political Commercial

121

0

121

1,560

0

1,560

0

0

72

2,297

0

6
2
0

6
0

430

418

0

0

Africa

2,297

Total

4,416

Oceania〈 Annual Report FY2016
38〈(Millions of Yen)FY2016FY2012

0

424

841

0

841

1,334

1,777

869

0

9,532

436

9,096

2

7

0

7

12
0

1,777

5
0

3,993 12,234

0
0

72

0

0

0
0

0

1,334

1,059

0

1,059

3,662

0

869

24

20

4

245

0

0

980

0

980

0

276

0

276

2,235 22,395 18,571

3,824

459

459

0

0

0

5

440

408

0

0

0

436 11,798

0

3,102

Political Commercial

0

867

0
0

1,472
0

0
0

31 18,584 18,551
0

0

0

1,472
0

0

3,662

0

245

872

29

503

0

0

0

843
503
0

33

1,384

320

1,064

0

232

0

232

884

7,782

652
1,000

233

6,782

Composition Year-on-Year(%)
change（％）

47.1

245.8

3.1

920.8

11.2 （40.8）
6.5-

0.0 （100.0）

17.8 （92.6）
11.4
3.0

220.3
-

100.0 （65.3）

｜Recoveries
Recoveries by Risk
(Millions of Yen)
Type of Risks

FY2010FY2011FY2012FY2013

FY2014FY2015Composition(%)

FY2016Year-on-Yearchange（％）

14,327

17,33023,53130,86532,137

40,66744,141

99.3

8.5

Commercial Risk

1,313

338

486

509

3,572

201

327

0.7

62.7

Total

15,64017,66824,017

31,37535,70840,86744,468100.0

8.8

Recoveries by Region(Millions of Yen)
RegionFY2010FY2011FY2012FY2013

FY2014FY2015Composition(%)

FY2016Year-on-Yearchange
（％）

5,673

6,298

7,278

8,979

9,039

5,895

13.3

（34.8）

Middle East

1,357

3,510

8,172

11,173

11,227

11,528

11,95326.9

3.7

Europe

1,028

814

1,154

1,512

2,860

572

594

1.3

3.8

North America

778

1

30

0

1

1

4

0.0

196.3

Central America

193

510

241

3,246

3,015

1,519

1,534

3.4

1.0

South America

1,155

1,176

1,536

1,558

2,361

10,771

20,33745.7

88.8

Africa

5,608

5,970

6,587

6,608

7,266

7,437

4,152

9.3

（44.2）

0

14

0

0

0

0

0

0.0

-

15,64017,66824,017

31,37535,70840,86744,468

100.0

8.8

Total

Recoveries in FY2016
Recoveries by Risk

The recovery amount in FY2016 increased by 8.8% (approximately JPY 3.6 billion) to approximately JPY 44.5
billion compared to the previous fiscal year’s approximately JPY 40.9 billion.
Recovery amount relating to political risk events such as Paris Club rescheduling amounted to approximately
JPY 44.1 billion (up by 8.5% compared to the previous fiscal year) while recovery amount relating to commercial
risk events was approximately JPY 0.3 billion, up by 62.7% from the previous fiscal year.

Recoveries by Region and Country

With regard to recoveries by region, recovery value in South America was approximately JPY 20.3 billion which
accounted for about half of the total recoveries (45.7%). The amount includes approximately JPY 19.7 billion in
Argentina (including non-Paris Club debt recoveries of approximately JPY 8.6 billion caused by a political risk
event) and approximately JPY 0.5 billion in debts of Ecuador.
Recovery value in the Middle East accounted for the second largest share next to South America, at 26.9% orapproximately JPY 11.9 billion. The amount includes approximately JPY 9.7 billion in debts of Iraq and approximately JPY 1.6 billion in debts of Jordan.
The recovery amount in Asia was approximately JPY 5.8 billion, accounting for 13.3% of the total recoveries. It
includes approximately JPY 5.1 billion in Indonesia and approximately JPY 0.4 billion in Myanmar.
In other regions, approximately JPY 4.1 billion were recovered in Africa (including Egypt’s approximately JPY 4.0
billion), approximately JPY 1.5 billion in Central America (including Cuba’s approximately JPY 1.1 billion and theDominican Republic’s approximately JPY 0.3 billion), and approximately JPY 0.5 billion in Europe (including
approximately JPY 0.4 billion in Serbia and approximately JPY 0.1 billion in Bosnia and Herzegovina).

〉39
Annual Report FY2016 〉

FY2016 Review of Performance FY2016 Financial Results

5,523

NEXI's Business

Asia

Oceania

About NEXI

Political Risk

FY2016 Review of Performance

FY2016 Business Overview
Enhancing Capability to Implement the“Partnership for Quality Infrastructure”
and“Initiative to Expand Export”
Responding to the “Partnership for Quality Infrastructure”
and “Initiative to Expand Export of Quality Infrastructure”
announced by Prime Minister Shinzo Abe in May 2015 and May
2016, NEXI implemented seven improvements: longer-term
investment insurance coverage, 100% political risk coveragein loan insurance and investment insurance, creation of new
insurance to cover sub-sovereign risk, operational improvement
in local buyer’s credit insurance, introduction of interest swap
insurance special clause, and increased coverage for mezzanine
finance (subordinated loan, preference shares). Also, following
the stipulation under the “Initiative to Expand Export of Quality
Infrastructure” which ensured NEXI’s sufficient financial basefor more aggressive insurance activity, a JPY 65 billion direct
investment into NEXI was approved in the FY2016 second
supplementary budget.

｜Supporting the Strategic Priority Sectors
Support for Overseas Infrastructure Development
Based on the "Infrastructure Systems Export Strategy"(determined at the Meeting of the Management Council
for Infrastructure Strategy in May 2013. Revised in May
2017), the Government of Japan is targeting to receive orders
for infrastructure systems with approximately 30 trillion
yen in amount during 2020. In fiscal year 2016, NEXI has
provided export insurance for projects such as the Doha
Metro construction and maintenance project in Qatar, as wellas insurance to cover project finance for geothermal power
generation projects in the Republic of Indonesia which takeson the risks associated with underground geothermal resource
for the first time. NEXI will continue to actively support
infrastructure exports.

(Photograph courtesy of Qatar Railways Company)〈 Annual Report FY2016
40〈Contributing to Stable Supply of Natural
Resources and Energy
For Japan, a stable mineral and energy resource supply is
an important policy concern. NEXI supports projects that
contribute to this Japanese policy via energy stake acquisition
by Japanese firms, energy production, and sale to Japanesebuyers. In FY2016, for example, NEXI provided loan insurance
for Tangguh LNG expansion project of Republic of Indonesia in
which about a 46% energy resource stake is held by a Japanesecompany and part of the produced LNG is sold to Japanese
corporations.

Support for the Agriculture Sector
NEXI is strengthening support to encourage financing andinvestment in overseas agriculture and agricultural exports toassure Japan’s food security. During the first half of FY2016,
NEXI provided insurance to support loans for Asociacionde Cooperativas Argentinas C.L. of Argentine Republic, thecountry’s largest agricultural cooperative. In the second half,
NEXI also provided loan insurance for the country’s major
independent oilseed crushing company Vicentin S.A.I.C.
NEXI supported these two agricultural projects contributing
to stable food supply to Japan following the support to Amaggi,
the major grain company in the Federative Republic of Brazil in
FY2014 and CAGSA of the Republic of Argentina in FY2014.

Support for the Aircraft and Ship Sectors
For the aircraft sector, NEXI is ready to support export of the
Mitsubishi Regional Jet (MRJ), a Japanese regional jet developedby Mitsubishi Aircraft Corporation. NEXI is also continuing tosupport export of Japanese aircraft components via reinsurance
provided for Boeing’s aircraft cooperative project that has been
joined by Japanese heavy industrial companies.
In the ship sector, ship orders that had declined following
the 2008 financial crisis continued to show a recovery due tothe yen’s depreciation, which led to an improved competitiveenvironment, and higher replacement demand for fuel-efficient(Photograph courtesy of Mitsubishi Aircraft Corporation)

ships. The demand is especially high for high value-added ships
in which Japanese shipbuilders have competitive advantage, andNEXI has received a number of inquiries about insurance forship export financing.
NEXI will continue to promote ship exports and projects that
contribute to the development of Japan’s aircraft industry.

TICAD and NEXIAt the TICAD VI conference, NEXI signed an agreement to
set up an export credit line of USD 40 million (NEXI portion)
for Eastern and Southern African Trade and Development Bank(PTA Bank).
The credit line to PTA Bank is in the form of co-financingof up to USD 80 million offered by Sumitomo Mitsui Banking
Corporation (SMBC) and Japan Bank for International
Cooperation (JBIC). NEXI provided Buyer’s Credit Insurance forthe financing extended by SMBC.
Loans provided via PTA Bank based on the credit line aremainly used by buyers in Sub-Saharan African countries when
they purchase Japanese machinery and equipment. By using
PTA Bank’s customer network, loans can become available tobuyers in broader trans-border region and can be provided
more quickly. Financing based on this credit line is expected
to become a useful financing tool for Japanese companies
considering African business.

In December 2016, Russian Federation President Vladimir
Putin visited Japan as Russia’s President for the first time ineleven years, and talked with Japanese Prime Minister Shinzo
Abe in Nagato, Yamaguchi Prefecture, and Tokyo. During Mr.
Putin’s visit, NEXI made two achievements which would help
expand Japanese business opportunities in Russia and further
strengthen the bilateral partnership.
One of them is a reinsurance agreement with the Russian
ECA EXIAR. Based on the agreement, NEXI is now able tostart considering a support framework through reinsurance forexports to third countries by Japanese companies locating in
Russia. NEXI and EXIAR agreed to support exports by Japanesecompanies in Russia.
The other achievement is the signing of two MOUs for creationof credit line for Alfa-Bank, Russia’s major private-sector bank.
NEXI is now under discussion with Russia on the creation of
credit line.
Through these efforts, NEXI would like to contribute tobusiness expansion of Japanese companies in Russia and deeper
relationships between the two countries.

(Reinsurance Agreement Signing Ceremony)〉41
Annual Report FY2016 〉

FY2016 Review of Performance FY2016 Financial Results

Export Credit Line for PTA Bank

｜Supporting Russian Business

NEXI's BusinessIn August 2016, the 6th Tokyo International Conference on
African Development (TICAD VI) was held in Republic of
Kenya, for the first time outside of Japan. Starting in 1993 topromote high-level policy dialogue between African leaders anddevelopment partners, TICAD had been held every five years
in Japan. From the sixth conference, it is held every three years
alternately in Africa and Japan.
More than 11,000 representatives participated in the conference
and side events, including Japanese representatives from 77
companies and education institutions, and representatives ofinternational and regional institutions from 53 African countries.
NEXI made a presentation about its roles and supports in
African projects at JETRO’s Japan-Africa Business Conference.

(Japan-Africa Business Conference MOU Signing Ceremony)

About NEXITokyo International Conference on
African Development (TICAD)

FY2016 Review of Performance

FY2016 Business Overview｜Supporting Cuban Projects
Debt Relief Measures for Cuba
Following Paris Club’s agreement in December 2015 on debt
relief measures for Republic of Cuba to support its return tothe international community, the government of Japan and thegovernment of Cuba concluded an exchange of notes (E/N) in
September 2016 concerning relief measures for Cuba’s tradeinsurance debt owed to NEXI which had been in arrears for 30
years since 1986.
Under the E/N, the Cuban government agreed that they pay
NEXI about JPY 36.2 billion of a total of about JPY 61.5 billion(principal and interests) in 18 years, and also they credit thefund account established within Cuba with the remaining JPY
25.3 billion in five-year installments. The fund is used by projectcompanies in Cuba to pay projects’ local costs in Cuba. Later theequivalent amount is paid by project companies to NEXI.
Late interests of about JPY 119.7 billion will be cancelled inaccordance with payment progress of principals and interest inarrears.

(After the signing of E/N)

Resumption of Overseas Investment
Insurance for Cuban Projects
In November 2016, NEXI restarted its overseas investment
insurance for Cuban projects after about six years’ absence.
After suspension of the entire insurance service for Cubain August 2010, NEXI had eased its export cover conditions
gradually in July 2013 and January 2016 to continue to support
Japanese export to Cuba.
In September 2016, with the expected improvement in businessenvironment following the debt restructuring agreement, NEXI
restarted support for Cuban investment by resuming investment
insurance on a case-by-case basis covering “war and force
majeure” risk (excluding transfer risk) and “expropriation andrights infringement” risk.

〈 Annual Report FY2016
42〈Japan-Cuba Public and Private Joint Conference
On November 28, 2016, during the Japan-Cuba Public andPrivate Joint Conference II held in Tokyo, the Minister of
Foreign Trade and Foreign Investment of Cuba visited NEXI.
The conference was established based on the bilateralagreement signed at the visit of Japanese Minister for Foreign
Affairs Kishida to Cuba in May 2015. The first round of theconference was held in Havana in November 2015. At the second
round, Minister of Foreign Trade and Foreign Investment
Mr. Malmierca and Ambassador of Cuba H.E. Mr. Pereira
participated. Japanese participants were State Minister for
Foreign Affairs of Japan Mr. Sonoura (head) and representatives
from governmental organizations including METI, AFF, JICA,
JOGMEC, and NEXI, as well as many participants from private
firms.
At the conference, NEXI and METI outlined the bilateralagreement on debt restructuring and NEXI’s resumptionof investment insurance. Mr. Malmierca expressed a strong
expectation for NEXI’s insurance. Though it is true that there
is still a significant hurdle the two countries need to overcome
before resuming a medium- to long-term insurance coverage,
NEXI would like to continue to consider supporting businessbetween Japan and Cuba.

Expanding Reinsurance Operational
Bases(At the signing ceremony; photograph courtesy ofJapan Association for Trade with Russia & NIS)

Berne Union Meetings

Enhancing Ties with Overseas
Organizations
MOU with KazExportGarant（KEG）
In November 2016, NEXI signed an MOU with KazExportGarant(KEG), the export credit and investment agency of Republic of
Kazakhstan, on cooperation to promote trade and investment
between Japan and Kazakhstan.
The purpose of the MOU is to materialize projects between
the two countries through a NEXI-KEG cooperative frameworkfor supporting and promoting bilateral trade and investment.
The MOU will help enhance Japanese business opportunities in
Kazakhstan and promote friendship and partnership between
the two countries.

NEXI has regular bilateral meetings with ECAs andgovernment officials of countries such as Republic of Korea,
Federal Republic of Germany, French Republic and Republic ofAustria to share information and exchange candid opinions on
various topics including the global financial situation and eachcountry’s issues and efforts. The meetings, each held usually
once a year, are helpful in further strengthening bilateral ties andkeeping up with each ECA’s activities.

G12 Meeting
The G12 meeting was held in Chennai, India in February 2017.
Participants were government officials and ECA representativesof the 12 nations (Italian Republic, India, U.K., Canada, People's
Republic of China, Federal Republic of Germany, Federative
Republic of Brazil, French Republic, U.S.A., Japan, RussianFederation and Republic of Korea). They shared informationof business performance and discussed the global economic
situation and each organization’s issues and activities. As there arelimited opportunities for each nation’s ECA and governmental
representatives to gather for discussion, discussions andinformation shared at the G12 meetings are very fruitful.
〉43
Annual Report FY2016 〉

FY2016 Review of Performance FY2016 Financial Results

Bilateral Meetings

NEXI's Business

The Berne Union (International Union of Credit andInvestment Insurers) is a forum in which ECAs, internationalorganizations and private insurers from around the world discusscommon issues related to export credit insurance and investment
insurance from a technical perspective. Since the first meeting in1934 in Berne, Swiss Confederation, its membership has grown
to a total of 84 as of April 2017.
The 2016 spring meeting took place in May in Warsaw, andthe fall meeting was held in October in Lisbon. NEXI attended
the respective meetings to compare notes with other members
regarding export credit.

About NEXI

NEXI signed a reinsurance agreement in May 2016 with Mitsui
Sumitomo Insurance Company (Europe), Limited, a Londonbased subsidiary of Mitsui Sumitomo Insurance Company,
Limited, to sell NEXI’s trade credit insurance to Japanesecompanies operating in the U.K. via Mitsui Sumitomo Insurance
Company (Europe). It underwrites insurance as a primary
insurer and NEXI underwrites reinsurance (Fronting Scheme).
NEXI had already been offering its insurance via the Fronting
Scheme in Singapore, Hong Kong and Thailand. The reinsurance
agreement with the European insurer has enabled NEXI to meetthe insurance needs of Japanese companies operating in the U.K.
In November 2016, NEXI also signed a reinsurance agreementwith Tokio Marine HCC (HCC Insurance Holdings, Inc.) which
is operating in the U.S. and Europe. Under the agreement, Tokio
Marine HCC underwrites trade credit insurance in the U.S. andEurope as a primary insurer and NEXI provides reinsurance.
The reinsurance agreement has enabled stable provision of
trade credit insurance service to Japanese companies operatingin the U.S. and Europe through the combination of the broadbased underwriting structure and ability of HCC and stable
underwriting capacity of NEXI.
Through this reinsurance scheme, NEXI will continue tosupport the growing overseas activities of Japanese companies.

FY2016 Review of Performance

FY2016 Business Overview
Supporting Mid-Sized Enterprises andSmall Businesses (SMEs) and AFF
Sectors to Expand Business

Promoting Trade Insurance
Following the last fiscal year, NEXI added another animatedfilm and brochure that provide specific examples of NEXI
insurance use for AFF produce and food exporters.

Creation of Export Credit Insurance for
SMEs and AFF Sector
In July 2016, NEXI started sale of Export Credit Insurance
for SMEs and AFF Sector by improving the insurance productformerly called Export Credit Insurance for SMEs. The revised
product is now available not only to SMEs but also to agriculture,
forestry and fisheries sectors such as agricultural cooperatives,
forestry cooperatives, fishermen's unions and agricultural
producers' co-operative corporations.
During this fiscal year, NEXI promoted itself and its insurance
at a number of seminars and forums including a meeting on
AFF export competitiveness enhancement strategy, a forumon the sixth industrialization through agriculture, commerce
and industry cooperation, and a cooperative symposium of
agriculture, commerce and industry, hosted by each regional
agricultural administration office.

（Video “NEXI Insurance: We Can Be a Big Help!”(Examples of use)）

NEXI also hosted a seminar for the first time (May 2016) for
SMEs that were considering export. At the seminar, a wide
variety of speakers gave useful information and know-how
for SMEs, such as basic knowledge of overseas business, Asianbusiness environment, and risk mitigation and insurance.

Reinforcing Support for SMEs
The support network for SMEs’ overseas business was launched
in FY2011 initially in conjunction with 11 regional banks withthe aim of widely spreading and promoting the use of NEXI’s
insurance. In FY2016, another 9 financial institutions joined
the network, expanding the total number of partner financial
institutions to 114, which now covers all 47 prefectures in Japan.
The network conference held in February 2017, which wasjoined by other official organizations, provided an opportunity
to hear the voices of trade insurance users, and also a venue
for sharing information and opinions among the variousorganizations that work to support the business of SMEs. In
response to the participants’ request, the FY2016 network
conference was held both in Tokyo and Osaka for the first timein six years. At the conference, useful information was also
provided by the Ministry of Agriculture, Forestry and Fisheries
which is promoting the primary industry’s export enhancement
strategy, the Financial Services Agency which is helping financial
institutions to strengthen support for their customers’ overseas
business, and the Public Security Intelligence Agency which isproviding information of national security such as terrorism.

〈 Annual Report FY2016
44〈（NEXI seminar for SMEs）

NEXI also participated in “FOODEX JAPAN 2017” (Makuhari
Messe, March 2017) as an exhibitor for the first time. It is oneof the largest exhibitions of food and beverage in Asia withmore than 80 thousand visitors in four days. NEXI distributed
pamphlets and provided consultation of the insurance use to a
lot of exhibitors and visitors at its booth located in the overseas
business consultation zone.

｜In Pursuit of a Sustainable Society

Improving Convenience
During the fiscal year, the application deadline of Export Credit
Insurance (Specific) and Export Credit Insurance for SMEs and
AFF Sector was extended to five business days from shipment.
Also, web application service hours start at 8:00 a.m., earlier than
before.
10,000

9,194

9,000
8,000

1,504

Underwritten transactions (secondary Y-axis)

1,600
1,400
1,200

5,000

890

4,000

669

3,000
2,000

0

2,000
1,800

1,781

6,000

1,000

Considerations

About NEXI

Underwritten amount (primary Y-axis, millions of yen)

7,000

9,516

Guidelines on Environmental and Social

167
365

273

211

262

511

370

444

362
646

435
296

286

624

567

4,360

2,740

1,304

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
（Fiscal Year）

1,000
800
600
400
200
0

｜Improving Web Services
Enterprise Comprehensive Insurance
Procedure on the Web
In FY2016, NEXI improved the web services introduced last
fiscal year.
In February 2017, NEXI expanded its web registration andapplication placement services to applicants of a supplementary
contract of Enterprise Comprehensive Insurance. Now NEXI’s
web application service can deal with most of its short-term
insurance applications, including user and buyer registrations.
We are always willing to improve our services by using feedback
collected directly from our customers or questionnaires.
NEXI will continue to try to reduce users’ procedural burdensand offer more convenient web services.

FY2016 Screenings
by Category

CategoryA
27.3%
CategoryC
68.2%

FY2016 Screenings
by Region

Central&SouthAmerica
15.9%

Europe/NIS
6.8%
MiddleCategoryB
East
4.5%
15.9%

Africa
4.5%

Asia
56.9%

※Turkey included in the Middle
East. Mexico included in Central &South America.
Russia and Central Asia includedin Europe/NIS.

〉45
Annual Report FY2016 〉

FY2016 Review of Performance FY2016 Financial Results

With the mission of bringing higher feasibility to SMEs and
AFF business owners in expanding their overseas businesses inmind, NEXI will continue to improve its products and services,
as well as strengthen its customer support and publicity.

NEXI has established the “Guidelines on Environmental andSocial Considerations in Trade Insurance” to carry out its social
responsibilities on environmental and social issues. NEXI makes
sure that appropriate environmental and social considerations
are implemented by the project sponsors on projects to besupported by NEXI’s insurance.
In FY2016, NEXI conducted screenings and made assessments
for 44 projects, including site visits. In the assessments, projects
are classified into three categories (A, B, or C) based on theirpotential environmental impacts in accordance with Screening
Forms submitted by applicants for NEXI insurance. For example,
a site visit will be conducted as a general rule if a project is
categorized as Category A, which indicates the highest level ofimpact.
Also, Objection Procedures on the Guidelines ensure NEXI’s
compliance with the Guidelines, for which an independent“Examiner” is assigned under the direct control of the Chairman.
NEXI will continue to take proper steps based on its Guidelines
for appropriate confirmation.

NEXI's Business（On-site visit to a project site）（Export Credit Insurance for SMEs and AFF Sector Amount andNumber Underwritten）

FY2016 Review of Performance

FY2016 Underwritten Projects
Power｜Supporting Electric Power Development Projects in Indonesia
To meet the rapidly increasing demand for electricity arising from the country’s economic growth, the Republic of Indonesia is in thecourse of promoting the 2016 – 2025 Electricity Supply Business Plan (RUPTL) which is an electricity development plan to construct new
power generation of 38.5GW by year 2024, out of which 35GW is planned to be constructed during the 4 years between 2015 and 2019.
NEXI has provided insurance coverage for the following three projects which are positioned as a part of the RUPTL.
1Expansion of Tanjung Jati B Ultra-supercritical Coal Fired Power Plant Project

Sumitomo Corporation (Sumitomo) and Kansai Electric PowerCo. Inc. (Kansai Electric) are developing a project to construct
a new 2,000MW (1,000MW x 2 units) ultra-supercritical coal
fired power plant adjacent to existing power plant units owned
by Sumitomo in central Java, Indonesia. The project will be
implemented in conjunction with a local entity, PT. United
Tractors Tbk, and once the plant is in operation, the generated
electricity will be sold to PT. PLN (Persero), Indonesia’s national
electricity power company, for a term extending to 25 years.
The project company, PT Bhumi Jati Power has made fundprocurement through project financing in which seven Japanesefinancial institutions namely Mizuho Bank, Ltd., the Bankof Tokyo-Mitsubishi UFJ, Ltd., Sumitomo Mitsui Banking
Corporation, Mitsubishi UFJ Trust and Banking Corporation,
Sumitomo Mitsui Trust Bank, Limited, the Norinchukin Bank,and Oversea-Chinese Banking Corporation Limited Tokyo
Branch, are taking part as lenders. NEXI has provided insurance
to cover the loan portion provided by these financial institutions,which in total amount to USD 1,678 million.
This power plant, which will utilize coal produced in Indonesia,
is sure to contribute to the economic development of thiscountry through stable and environment-friendly power supply〈 Annual Report FY2016
46〈by using ultra-supercritical technology. With Sumitomo’s strong
experience in plant construction and operation obtained throughits development of adjacent plants and Kansai Electric’s abundantsuccess in the operation of ultra-supercritical power plants, thisproject is truly a compilation of Japanese support in the formof advanced technology, project development and management
capabilities, and financial contributions.
◦This insurance contract was entered into in February 2017.

（Photograph courtesy of Sumitomo Corporation）

2

Muara Laboh Geothermal IPP Project

NEXI's Business（Photograph courtesy of Sumitomo Corporation）

Jawa2 Gas Combined Cycle Power Plant Project

PT. PLN (Persero), Indonesia’s national electricity powercompany, is constructing a Gas Combined Cycle Power Plant(800MW) on the site of Tanjun Priok Power Plant located in
the harbor area in Jakarta, the capital of Indonesia. Mitsubishi
Corporation, as a consortium with Indonesia’s PT. Wasa Mitra
Engineering, a local procurement company, was awarded the
EPC contract for this project, and will supply units of equipment
and machinery such as gas turbines, steam turbines, and heatrecovery steam generators manufactured by Mitsubishi Hitachi
Power Systems, Ltd. and a whole unit of gas combined cycle
power generating facility, including a generator, manufactured
by Mitsubishi Electric Corporation.
PLN obtained the funds to purchase such equipment andmachinery through loans made by Japan Bank for International
Cooperation, Bank of Tokyo-Mitsubishi UFJ, Mizuho Bank
and Australia and New Zealand Banking Group Tokyo Branch.
NEXI provided insurance cover for the loans made by the three
Japanese financial institutions. (Total loan amount is JPY 12.7
billion plus USD 18 million)
By providing financial support for export of Japaneseequipment used in this project, NEXI expects not only to expand

business opportunities in Indonesia for Japanese companies but
also to help them maintain and strengthen their international
competitiveness.
◦This insurance contract was entered into in October 2016.

（Photograph courtesy of Mitsubishi Corporation）〉47
Annual Report FY2016 〉

FY2016 Review of Performance FY2016 Financial Results

3

geothermal development projects but also to help them maintainand strengthen international competitiveness in the energy
development market including renewable energy.
◦This insurance contract was entered into in February 2017.

About NEXI

PT. Supreme Energy Muara Laboh (owned 35% by Sumitomo
Corporation (Sumitomo), 35% by Electrabel S.A. and 30%
by PT. Supreme Energy) has taken up a project to construct a
geothermal power plant (80MW) in West Sumatra Provinceof Indonesia and to sell the generated electricity to PT. PLN(Persero), Indonesia’s national electricity power company, for aterm of 30 years.
Sumitomo was awarded with the EPC contract for this project
jointly with PT. Rekayasa Industri, a local company. West Japan
Engineering Consultants, Inc., a subsidiary of Kyushu ElectricPower Company Inc., will be working with them to support the
project company as their technical service advisor throughout
the loan period.
Financing for the project is made through loans provided
by Japan Bank for International Cooperation, the AsianDevelopment Bank, Mizuho Bank, Ltd., the Bank of TokyoMitsubishi UFJ, Ltd. and Sumitomo Mitsui Banking Corporation,
and NEXI’s insurance supports the loans made by the three
Japanese financial institutions. This is the first time NEXI has
supported geothermal IPP project financing with risks associatedwith geothermal resource capacity.
NEXI’s financial support for this project is expected not only to
expand the opportunity for Japanese companies to take part inFY2016 Review of Performance

FY2016 Underwritten Projects
Oil & Gas

｜Indonesia / Tangguh LNG Expansion Project
Located in Papua Barat province in the Republic of Indonesia,
the Tangguh Expansion Project will add a third train to theexisting Tangguh LNG (Liquefied Natural Gas) facilities of two
trains, which are currently producing 7.6 million tons of LNG
per annum. The Tangguh Expansion Project will add 3.8 million
tons of annual production capacity by constructing a third LNG
process train. Approximately 46% interest in the project is heldby LNG Japan and other Japanese partners. Also, about 25% of
LNG produced yearly from the new train will be purchased by
the Kansai Electric Power Co., Inc.
LNG Japan is providing a guarantee on the loan portion mainly
made by Japanese financial institutions to finance the project,
and NEXI is providing cover for losses suffered by LNG Japan on
its guarantee. In November 2007, NEXI also provided insurance
for LNG Japan’s guarantee for commercial bank loans provided
to finance the construction of the first two trains of the Tangguh
LNG facilities.
About 75% of the LNG produced by this project will bepurchased by PT. PLN (Persero), the electric power company
owned by the Indonesian government, and will be supporting
the nation’s energy supply to meet the still growing demand. This

project is of high significance to Japan as Japanese companies
will retain interests in the project, and also important in terms of
ensuring a stable supply of energy to Japan, as 25% of the LNG
production will be purchased by a Japanese corporation.
◦This insurance contract was entered into in November 2016.

（Photograph courtesy of LNG Japan）

Ships｜Spain / Export of LNG Carrier Chartered by Gas Natural
San Isidro LNG I B.V. (San Isidro), established in the Netherlands
by Imabari Shipbuilding Co., Ltd. (Imabari Shipbuilding) and
Mitsubishi Corporation (Mitsubishi), is working for a project inwhich an LNG carrier will be on charter to Gas Natural Group,
the largest gas and power operator in Spain and South America.
The carrier, purchased by San Isidro and then chartered by Gas
Natural Group, is a state-of-the-art LNG vessel constructed andexported by Imabari Shipbuilding. With the largest tank capacitythat the shipbuilder can offer, the LNG carrier will realize
significant improvement in fuel consumption performance by
the introduction of a highly fuel efficient propulsion system.
For San Isidro’s purchase of the LNG carrier, Japan Bank forInternational Cooperation and Mizuho Bank, Ltd. agreed toprovide loans, and NEXI provided insurance for the loans
extended by Mizuho.
NEXI’s insurance support for the loans is expected to lead tofurther exports of vessels constructed by Japanese shipbuilders
and more business opportunities for Japanese companies.
◦This insurance contract was entered into in January 2017.
〈 Annual Report FY2016
48〈（Photograph courtesy of Imabari Shipbuilding Co., Ltd. (LNG carrier
under construction)）

Infrastructure｜Cambodia / Techno Park Project
Corridor near the Thailand-Cambodia border), the techno parkis expected to contribute to further strengthening of the supply
chain for Japanese companies operating in the Mekong Region.
◦This insurance contract was entered into in November 2016.

About NEXI

（Photograph courtesy of Toyota Tsusho Corporation）

The Red Line Mass Transit System is a fully elevated trainsystem project which will construct a 26.4 kilometer line
running to the north and a 14.6 kilometer line to the west from
Bang Sue Station in Bangkok. For this project, a consortium
comprised of three Japanese companies (Mitsubishi Heavy
Industries, Ltd., Hitachi, Ltd. and Sumitomo Corporation) wasawarded a full turnkey contract to design and build the railway
system including signaling system and rolling stocks. The Red
Line Project is part of the Mass Transit System Project promotedby the Thai government. The north line will be financed byyen loans extended by the Japanese government while the westline will be funded by the Thai government. The north line isscheduled to be completed in 2020.
NEXI’s Export Credit Insurance has been provided to theconsortium to cover Thailand’s political risk and credit risk of
the State Railway of Thailand, the consortium’s counterparty.
To solve the deteriorating traffic congestion and environmental
problem in the Bangkok Metropolitan Region, the Thaigovernment set out a Mass Transit Investment Plan to develop
seven railway lines between 2005 and 2012. The construction of
three lines including the Red Line was approved by the Cabinet
in August 2006. Bang Sue Station, the Red Line starting stationadjacent to a long-distance bus terminal, is expected to act as a
hub station of the Bangkok Mass Transit System, connecting to
the Blue Line (2004).
NEXI’s support in this project will help boost the competitivenessand profile of Japanese rolling stocks and railway systems as well
as overseas activities of Japanese companies.
◦This insurance contract was entered into in August 2016.

（Image courtesy of Hitachi, Ltd. (rendering image)）〉49
Annual Report FY2016 〉

FY2016 Review of Performance FY2016 Financial Results｜Thailand / Bangkok Red Line Mass Transit System Project

NEXI's BusinessTechno Park Poi Pet Pvt. Co. Ltd. (Techno Park), wholly
owned by Toyota Tsusho Corporation (Toyota Tsusho), started
operation of the techno park built in Poipet City, Cambodia.
Techno Park provides Japanese companies operating in
Cambodia with a variety of services including rental factories,
employee meals, accounting, subcontracted processing,human resources and export/import service to enable Japanesecompanies in Cambodia to focus on manufacturing.
NEXI has provided its investment insurance to support Toyota
Tsusho’s investment in Techno Park, and loan insurance tosupport the Japanese company’s guarantee on loans extended tofinance Techno Park’s equipment purchases and working capital.
This is the first time that NEXI has provided loan insurance for a
Cambodian project.
With abundant young labor force and Poipet City’s good
location (located in a strategic point of the Southern Economic

FY2016 Review of Performance

FY2016 Underwritten Projects
Qatar / Support for Doha Metro Construction and Maintenance Project― Qatar’s First Subway System ―The Doha Metro Project is part of a national project called“Qatar National Vision 2030” announced by the government of
Qatar in October 2008 which implements a number of largescale national projects such as airport and port constructions.
Under the Metro Project, a consortium including four Japanesecompanies (Mitsubishi Heavy Industries, Ltd., Mitsubishi
Corporation, Hitachi, Ltd., and The Kinki Sharyo Co., Ltd.) wasawarded a contract to supply rolling stock and train system.
NEXI has provided insurance for Doha Metro Project.
Infrastructure development is one of the priority projects
for Qatar, as the country is going to host the 2022 FIFA World
Cup. Qatar’s first metro system is expected to create a positive
economic impact by realizing efficient transportation, offering
more efficient social infrastructure based on the railway system,
and creating jobs. The project is also expected to help Japaneserolling stock and railway system manufacturers to raise theirprofile in the Middle East market.
◦This insurance contract was entered into in April 2016.

（Photograph courtesy of Qatar Railways Company）｜Uganda / Export of Construction Machinery
Sumitomo Corporation (Sumitomo) signed a sales contract
with Ministry of Works & Transport of Republic of Uganda
in which Sumitomo would deliver construction machineryand vehicles manufactured by Japanese companies including
Komatsu Ltd., Sakai Heavy Industries, Ltd., Tadano Ltd.,
Mitsubishi Fuso Truck and Bus Corporation and Kyokuto
Kaihatsu Kogyo Co., Ltd.
For the purchase of these Japanese products, Japan Bank forInternational Cooperation (JBIC) and Sumitomo Mitsui Banking
Corporation (SMBC) agreed to provide loans totaling approx.
JPY 15.1 billion to Uganda Ministry of Finance, Planning andEconomic Development, and NEXI has provided insurance tosupport SMBC’s loan (approx. JPY 7.6 billion).
As an agricultural country, Uganda is planning to improve
regional road conditions to facilitate farm produce distribution
to the market. The Japanese machinery and vehicles exported to
Uganda are used in several road construction sites in Uganda,
contributing to the country’s economic development. NEXI’s
export support for Japanese high-tech construction machineryis expected to lead to further Japanese business opportunities in
Uganda.
◦This insurance contract was entered into in November 2016.

〈 Annual Report FY2016
50〈（Photograph courtesy of Sumitomo Corporation）

Agriculture｜Supporting Argentina’s Agricultural Projects

1

Argentine Republic / ACA Long-term Financing Transaction（Photograph courtesy of ACA）

Argentine Republic / Vicentin S.A.I.C. Long-term Financing Transaction

Vicentin S.A.I.C., Argentina's leading crusher of oil seed, hasentered into an MOU on grain sales of 400,000 tons a year with
Mitsui & Co., Ltd. In connection with this MOU, ING Bank
N.V. Tokyo Branch, The Bank of Tokyo-Mitsubishi, Ltd. and
Sumitomo Mitsui Banking Corporation executed a 5-year tenorloan agreement for a maximum amount of USD 115 million
which will be used as long-term working capital by Vicentin
S.A.I.C. NEXI provided insurance to support this loan.
Vicentin S.A.I.C. crushes soybeans, etc., which are important
grains to Japan in terms of food security, and exports soybean
meal used for animal feed and soybean cooking oil. Vicentin
S.A.I.C. is one of the world's largest soybean product exporters.
The company now surpasses foreign grain majors as the world's
largest soybean oil exporter and second largest soybean meal
exporter in 2016.
◦This insurance contract was entered into in March 2017.

（Photograph courtesy of Vicentin S.A.I.C.）〉51
Annual Report FY2016 〉

FY2016 Review of Performance FY2016 Financial Results

2

NEXI's Business

ACA (Asociacion de Cooperativas Argentinas CL), thelargest agricultural cooperative in Argentina, has signed loan
agreements of a maximum of USD 100 million with terms of 5
years and 8 years with ING Bank N.V., Tokyo Branch and The
Bank of Tokyo-Mitsubishi UFJ, Ltd. for the procurement of theirlong-term working capital. NEXI has provided insurance coverto support these lenders.
The loans are for financing ACA’s working capital needed
to collect grain from domestic agricultural cooperatives andfarmers and sell to overseas buyers. ACA and the National
Federation of Agricultural Cooperatives (Zen-Noh) of Japan
have an established business relationship of over 50 years andit is expected that their strengthened relationship will further
enhance ties between Japan and Argentina in agricultural sector.
◦This insurance contract was entered into in July 2016.

About NEXI

NEXI has provided insurance to the following two projects related to agriculture, major industrial sector in Argentine Republic. Bothprojects are made to implement the “Infrastructure Systems Export Strategy” (adopted in May 2013 at the Ministerial Meeting on Strategy
Relating Infrastructure Export and Economic Cooperation, and revised in May 2017) which lists as one of its objective to “strengthen
efforts in grain procurement from South America.” Further, this financing is expected to contribute to the security of Japan’s foodprocurement because the loan is contingent on Vicentin S.A.I.C. to export a certain amount of grain to Japan over the life of the loan, andalso to make maximum consideration to export food grain to Japan in case of an emergency.

FY2016 Review of Performance

FY2016 Underwritten Projects

SMEs related

NEXI actively supports SMEs in their development of overseas business. In July 2016, we made a product upgrade to the former Export
Credit Insurance for SMEs to Export Credit Insurance for SMEs and AFF Sector, which now offers an expanded target scope of export
credit insurance users including those engaged in the agriculture, forestry and fishery industry.

Asia｜Export of Automobile related Jigs and Tools
NEXI provided insurance cover to Yamanouchi Mfg. Co., Ltd.
(Yamanouchi Mfg.）for their export of jigs and tools used in
automobiles to the Islamic Republic of Pakistan with the Export
Credit Insurance for SMEs and AFF Sector.
Support for this transaction was provided through cooperation
between NEXI and Tokyo Higashi Shinkin Bank, the main bankfor Yamanouchi Mfg.
Yamanouchi Manufacturing is a maker of jigs and tools infields such as coating, plating and deposition. They develop andmanufacture original products on their own to fit complicatedly
shaped items such as mobile phones, cameras, automobiles, andfishing tools.
Through the development of active export transactions made to
Asian countries such as the Kingdom of Thailand, Yamanouchi
Mfg recently started business with Pakistan. However, after
they experienced a payment delay in a sample shipment madeto a Pakistani company, they decided to use NEXI's insurance
through Tokyo Higashi Shinkin Bank, so as to mitigate theirconcerns.

◦Annual Insured Amount：Approx. JPY 4.4 million◦This insurance contract was entered into in February 2017.

（Photograph courtesy of Yamanouchi Mfg. Co., Ltd.）｜Export of Awamori (alcoholic beverage)
NEXI provided insurance cover to HIGASYUZOU LLC(HIGASYUZOU) for exporting Ryukyu Awamori to Hong Kongwhich the Export Credit Insurance for SMEs and AFF Sector.
HIGASYUZOU was considering export of their main product“Zampa” (which won the Three-Star Superior Taste Award fromthe International Taste & Quality Institute for three consecutive
years) to Hong Kong when they attended a seminar on tradeinsurance which was held in Okinawa Prefecture by the Okinawa
General Bureau, Cabinet Office in June 2016. At the seminar,
they learned of NEXI’s trade insurance products, and decided touse the Export Credit Insurance for SMEs and AFF Sector.
Being a hub for international distribution, Okinawa is now
supporting overseas business development and expansion. This
export transaction is one made possible through the support ofsuch a network.
With the support of NEXI’s insurance, HIGASYUZOU intends to〈 Annual Report FY2016
52〈continue their expansion in overseas export.
◦Annual Insured Amount：Approx. JPY 1.74 million◦This insurance contract was entered into in October 2016.

（Photograph courtesy of HIGASYUZOU LLC）

｜Export of Japanese Icefish◦Annual Insured Amount : Approx. JPY 220,000◦This insurance contract was entered into in December 2016.

About NEXI
NEXI's Business（Photograph courtesy of Lake Ogawara Fisheries Cooperative
Association）｜Export of Health Food Supplements
NEXI provided insurance to Kanehide Bio Co., Ltd. (KanehideBio) for their export of health food to the Socialist Republic ofVietnam with the Export Credit Insurance for SMEs and AFF
Sector.
Kanehide Bio, established in 1988 as Okinawa Hakko Kagaku
Co., Ltd. (Okinawa Fermentation Science) for the purpose ofpromoting the use of bagasse, a residue left after the extractionof juice from sugar cane, key crop of Okinawa Prefecture. The
company also aims to build-up the economy in Okinawa.
The company produces health food, supplements, and drinks
from Okinawa-grown ingredients such as mozuku seaweed, goya(bitter gourd), noni fruit, and shii-ku-wa-saa (hirami lemon) anddistributes original products both domestically and overseas.
The Bank of Okinawa introduced our trade insurance productto the company as a tool for risk hedging in transactions withlarge-sum document collection.
◦Annual Insured Amount：Approx. JPY 9 million◦This insurance contract was entered into in January 2017.

（Photograph courtesy of Kanehide Bio Co., Ltd.）〉53
Annual Report FY2016 〉

FY2016 Review of Performance FY2016 Financial Results

NEXI provided insurance to Lake Ogawara Fisheries
Cooperative Association (Ogawarako Gyokyou) for theirexport of Japanese Icefish to Hong Kong Special Administrative
Region of the People's Republic of China with the Export Credit
Insurance for SMEs and AFF Sector.
This insurance was provided through the Aomori Bank, aregional bank in Aomori Prefecture that works with NEXI as apartner in promoting the use of trade insurance.
Ogawarako Gyokyou decided to use trade insurance to obtainassurance in this transaction, as it was their first business withthe buyer.
This was also the first overseas transaction for Ogawarako
Gyokyou, and through repeated discussions on risk coverage,
they decided on the use of trade insurance which turned out tobe very effective for them both in terms of convenience and cost.
Aomori Prefecture is in the course of improving theirlogistics environment in conjunction with Yamato Transport
Co., Ltd., and has developed a system to export perishable
items without losing freshness under a ser vice named“A! Premium,” and they utilized this newly developed system
to export icefish.

FY2016 Review of Performance

FY2016 Underwritten Projects

SMEs related｜Japanese Cypress (Hinoki) Export from Ehime Prefecture
NEXI has provided Export Credit Insurance for SMEs and
AFF Sector to Ehime Forest Association to support exports oflocally grown Japanese cypress (Hinoki) to lumber processors inSoutheast Asia.
This is the first successful insurance contract based on thecooperation agreement made between NEXI and the Ehime
Bank, Ltd. in October 2015. Also, Ehime Forest Associationis the first forest association that has been supported by thisinsurance since its launch in July 2016.
Ehime Prefecture is one of the major wood producers in Japan.
About 70 percent of the prefecture is covered by forests, and it
is especially rich in Japanese cedar and cypress forests. Ehime
Forest Association is expanding its overseas activities including
export of cedar and cypress lumber to China and Southeast
Asian countries.
◦Export amount to be covered by insurance: Approx. JPY 3.3
million◦This insurance contract was entered into in January 2017.

（Photograph courtesy of Ehime Forest Association）｜Export of Bedding and Bed Linens
NEXI has provided Export Credit Insurance for SMEs and AFF
Sector to Maru Home Textile Co., Ltd. (Maru Home Textile) to
support its export of bedding and bed linens to People’s Republicof China. Maru Home Textile is a manufacturer and distributorof bedding and bed linens with more than 70 years in business.
It is handling a wide variety of bedclothes products from fabrics
for down bedding, wool bedding and Japanese futon (calico) tofabrics for other uses.
Maru Home Textile started to use NEXI insurance to reduce a
non-payment risk in a direct deal with a new buyer in China as
the buyer demanded payment after delivery.
Maru Home Textiles is planning to increase exports while
protecting against non-payment risk by using NEXI insurance.
◦The initial insurance contract was entered into in July 2016.

〈 Annual Report FY2016
54〈（Photograph courtesy of Maru Home Textile Co., Ltd.）Europe｜Export of Akita Komachi Rice
export credit insurance to cover the risk of non-payment after
shipment.
◦Annual Insured Amount：Approx. JPY 2.45 million◦This insurance contract was entered into in August 2016.

About NEXI

（Photograph courtesy of Akita Obako Japan Agricultural Cooperative）｜Export of Household Sundries
NEXI insurance.
◦Export amount to be covered by insurance: Approx. JPY 9
million◦This insurance contract was entered into in March 2017.

（Photograph courtesy of Aisen Industrial Co., Ltd.）｜Export of Eyewear Frames
NEXI has provided Export Credit Insurance for SMEs and
AFF Sector to Fukui Megane Industry Co., Ltd (Fukui Megane)to support the export of eyewear frames to Grand Duchy of
Luxembourg. The insurance has been provided in cooperation
with the Fukui Bank, Ltd., one of Fukui Megane’s main banks
and a partner bank of NEXI.
Fukui Megane’s eyewear frames are 100% made in Japan under
its fully integrated manufacturing and marketing system fromdesigning, manufacturing to marketing. Fukui Megane decided touse NEXI’s insurance to reduce risk associated with export when
it started to do business with a first-time buyer in Luxembourg.

Fukui Megane is willing to expand its international businessby using NEXI’s insurance for export contracts with deferredpayment terms.
◦Export amount expected to be covered by insurance: Approx.
JPY 4 million◦This insurance contract was entered into in October 2016.

（Photograph courtesy of Fukui Megane Industry Co., Ltd）

〉55
Annual Report FY2016 〉

FY2016 Review of Performance FY2016 Financial Results

NEXI has provided Export Credit Insurance to Aisen IndustrialCo., Ltd. (Aisen Industrial) to support its export of householdsundries to Republic of Italy.
Aisen Industrial is an overseas business subsidiary spun off
in 1984 from Aisen Co., LTD., a well-regarded manufacturer ofkitchen and cleaning articles. Aisen Industrial decided to use
NEXI’s insurance for a new export (OEM) contract, then undernegotiation with an Italian buyer, to reduce concerns over thebuyer’s bankruptcy or non-payment risks that could arise during
the production process.
With a wide range of competitive products such as patented
micro-fiber Torepika and highly popular stick-on sponge, Aisen
Industrial is planning to increase its overseas business by using

NEXI's Business

NEXI provided insurance cover to Akita Obako Japan
Agricultural Cooperative (JA Akita Obako) for exporting Akita
Komachi brand rice to the Russian Federation with the Export
Credit Insurance for SMEs and AFF Sector.
NEXI provided cover for this transaction through Japan
External Trade Organization (JETRO), and this is the first time
NEXI has supported an agricultural cooperative with the Export
Credit Insurance for SMEs and AFF Sector.
JA Akita started transactions with Russia in 2015, focusing onexporting their brand rice.
When JA Akita Obako was requested from Russian buyers
to change the settlement terms from the initial prepayment todeferred payment after bill of lading date, they decided to use

FY2016 Review of Performance

FY2016 Underwritten Projects

SMEs related

North America｜Export of Dental Medical Equipment
NEXI provided insurance cover to MICRON Corporation(MICRON）for their export of dental medical equipment to
U.S.A. with the Export Credit Insurance for SMEs and AFF
Sector.
As a manufacturer of medical products MICRON is required
to ensure the safety and reliability of their products. Their highquality products with originality are widely distributed in dental
markets both domestic and overseas.
As the company was trying hard to expand their sales channels
and sales in the U.S.A., they decided to use trade insurance
to meet a wider range of requests from their buyers on their
payment terms.
With the support of NEXI’s insurance, MICRON’s risk can be
mitigated even with payment-on-delivery transactions, and will
enable MICRON to engage in continuous business with theirbuyers free of worries.
In addition, with new buyers, MICRON is now able to negotiate
business more aggressively to expand their sales channels basedon the assumption that risks will be covered by trade insurance.
◦Annual Insured Amount：Approx. JPY 3 million◦This insurance contract was entered into in February 2017.

（Photograph courtesy of MICRON Corporation）｜Export of Apparel Products
NEXI provided Export Credit Insurance to Hana To Guitar
Co., LTD (Hana To Guitar）for their export of apparel products
to U.S.A.
Through introduction from the Japan External Trade
Organization (JETRO) this insurance was provided within theframework of the New Export Nation Consortium in which
supportive resources from various public institutions are madeavailable in tandem to mid-sized companies and SMEs who arelooking for opportunities to expand their business to overseas.
Hana To Guitar is an apparel brand selling their products bothin domestic and foreign markets.
With the support of JETRO, they attended a matching event insearch for an interested overseas buyer. They received an inquiry
for order on a payment-after-delivery basis from a US buyer, anddecided to use NEXI's insurance.
In addition, they used NEXI’s credit check service which offers
credit reports on prospective business-partners free-of-charge(up to 8 reports). Based on the report they received, they saw
that the prospective buyer’s business was large enough in size

〈 Annual Report FY2016
56〈to satisfy the requirements to receive NEXI’s coverage on credit
risk, too, and were able to start out their business transaction
with confidence.
◦Annual Insured Amount：Approx. JPY 4.5 million◦This insurance contract was entered into in January 2017.

（Photograph courtesy of Hana To Guitar Co., LTD）

｜Export of Electrical Insulation Material

About NEXI

（Photograph courtesy of Emi Corporation）

FY2016 Review of Performance FY2016 Financial Results｜Export of Japanese Sake
NEXI has provided Export Credit Insurance for SMEs and
AFF Sector to Kinokawa Co., Ltd. (Kinokawa）to support thebrewery’s export of Japanese sake to Canada. The insurance has
been provided in collaboration with NEXI’s partner bank, theShinwa Bank, Ltd.
Kinokawa is a Japanese sake brewery established in 1839 in
Isahaya City, Nagasaki Prefecture. The brewery’s core brands
include Chojiya and Birakuten that is being enjoyed by first-classpassengers of a Japanese airlines.
Kinokawa decided to use NEXI insurance for trades with a
Canadian buyer when the buyer proposed to change the termsof payment from advance payment to payment after delivery to
respond to growing trade opportunities.
Kinokawa is willing to expand its overseas business by using
NEXI insurance for sales contracts with payment terms of
payment after delivery.
◦ Export amount to be covered by insurance: Approx. JPY
500,000◦This insurance contract was entered into in March 2017.

NEXI's Business

NEXI has provided Export Credit Insurance for SMEs and
AFF Sector to Emi Corporation (Emi) to support the exportof electrical insulation material to the U.S.A. Emi was a firsttime user of NEXI insurance who had found out about NEXIat an export support seminar held by Japan External Trade
Organization (JETRO).
Emi is an export and import company handling electricalinsulation and non-ferrous metal materials around the world.
Emi used NEXI’s insurance to cover the risk in the electricalinsulation material sales contract with a U.S. buyer in which thepayment terms were payment after delivery.
Emi is willing to expand its overseas business by using NEXI
insurance for export contracts with first-time buyers who would
pay after delivery.
◦Export amount expected to be covered by insurance: Approx.
JPY 33 million◦This insurance contract was entered into in August 2016.

（Photograph courtesy of Kinokawa Co., Ltd.）〉57
Annual Report FY2016 〉

FY2016 Review of Performance

FY2016 Underwritten Projects

SMEs related

Africa｜Export of Aluminum Paste
NEXI has provided Export Credit Insurance for SMEs and AFF
Sector to Nihonboshitsu Co., Ltd. (Nihonboshitsu), an exporterof aluminum paste to Arab Republic of Egypt. The insurance has
been provided in cooperation with the Senshu Ikeda Bank, Ltd.,
one of Nihonboshitsu’s main banks and a partner bank of NEXI.
Nihonboshitsu decided to use NEXI insurance when it started
to export its aluminum paste to a first-time buyer in Egypt.
Nihonboshitsu is planning to expand its international businessby using NEXI insurance for export contracts with deferredpayment terms.

◦Export amount expected to be covered by insurance: Approx.
JPY 7.6 million◦This insurance contract was entered into in December 2016.

（Photograph courtesy of Nihonboshitsu Co., Ltd.）

Oceania｜Export of Beer
NEXI has provided Export Credit Insurance for SMEs and AFF
Sector to ORION BREWERIES, LTD. (ORION) for exportingbeer to Australia.
This insurance was provided the introduction from the Bank of
Okinawa, Ltd., Okinawa’s regional bank who works with NEXI
as a partner to promote the use of export insurance.
ORION is the 5th largest brewer in Japan in terms of sales
volume. Recently the company is very active in promoting
their products in foreign markets with under the slogan “From
OKINAWA to the world. ”
The company wanted to obtain more assurance in conducting
business with Australia and decided to use trade insurance
starting in November 2016.

ORION intends to further their expansion into foreign markets
with continued use of trade insurance.
◦Annual Insured Amount：Approx. JPY 1.5 million◦This insurance contract was entered into in November 2016.

（Photograph courtesy of ORION BREWERIES, LTD.）｜Export of Marine Products
NEXI has provided Export Credit Insurance for SMEs and AFF
Sector to Daitoh Gyorui Co., Ltd. (Daitoh Ghyorui) to support
the export of marine products to Oceania.
Daitoh Gyorui is a marine product wholesaler founded in 1950
and distributing at Nagoya City Central Wholesale Market.
Daitoh Gyorui found out about NEXI at the Meeting on
Competitiveness Enhancement Strategy for Agriculture, Forestry
and Fisheries hosted by the Ministry of Agriculture, Forestry and
Fisheries. The wholesaler started to use NEXI insurance for an
initial order from a new buyer who demanded deferred payment.
Supported by NEXI insurance, it is now actively developing
international markets.
〈 Annual Report FY2016
58〈◦Export amount to be covered by insurance: Approx. JPY 10
million◦This insurance contract was entered into in July 2016.

（Photograph courtesy of Daitoh Gyorui Co., Ltd.）

Overview of Financial Statements /Proﬁts and Losses ……………………… 60

NEXI's Business

FY2016 Financial Review

About NEXIFY2016 Financial Results
Financial Statements
Statement of Income ………………… 62
Statement of Cash Flows …………… 63
Notes ………………………………………… 64〉59
Annual Report FY2016 〉

FY2016 Review of Performance FY2016 Financial Results

Balance Sheet …………………………… 61

FY2016 Financial Results

FY2016 Financial Results｜Fiscal Year 2016 in Review
On June 15, 2017, NEXI submitted the financial statements and other financial information of Incorporated Administrative
Agency Nippon Export and Investment Insurance for Fiscal Year 2016 ended March 31, 2017 (16th year in operation) to the Ministerof Economy, Trade and Industry, and have received approval on the statements on June 26.

｜Overview of Financial Statements
Financial Highlights from FY2012 to FY2016 (FY end: March 31)
12th

Ordinary profit (loss)
Ordinary income（Underwriting income）（Reference）Premium of original insurance written
Net premium written

Reversal of outstanding claims provision(Investment income)(Foreign exchage gain)

Ordinary expenses(Underwriting expenses)(Reference) Insurance claims paid

Net claims paid

Provision for outstanding claims reserves

Provision for outstanding commitments reserves(Foreign exchange loss)(Operating and administrative expenses)(FY2012)8,404(FY2013)

6,905

15th

(FY2014)

8,118

16th

(FY2015)

6,193(FY2016)

7,612

14,241

23,364

19,355

17,26135,59028,224

65,83948,43145,990

－

351

9,910

9,908

8,582
8,153

17,281

13,453

17,24012,461－

975

11,248

11,231

－

6,524

5,245

5,344

5,507

5,690

8,462

7,336

15,246

13,162

9,649

4,416

12,234

3,102

22,395

7,782

342

－

1,035

－

182

3,185
388

143

1,491
1,201

2,466

499

5,261

5,597

20,426

15,432－

12,022

Total assets

368,664

Net worth

14th

16,866Extraordinary profit (loss)
Net profit (loss)(Millions of Yen)
13th

321,002

－

430

－

9,740

5,519

287

2,239

－

2,718
778
414

8,635

3,363

2,058

5,399

7,386

6,586

－

71

176

8,526

17,13831,98024,388373,557

414,617454,285

573,948

336,433

25,256361,690

38,173399,863

31,999497,438(Note) Extraordinary profit (loss) includes valuation of profits or losses related to government-invested assets.

｜Profits and Losses
Due to Japan’s stagnant export and other factors NEXI 's total underwritten amount for FY2016 showed a year-on-year 11.2% decrease at
JPY 7 trillion. The net premium written decreased by 9.9% from the previous year to JPY 11,231 million. As a result, despite the year-onyear 3.3% increase in investment income to JPY 5,690 million, ordinary income decreased by 10.8% from the previous fiscal year to JPY
17,261 million.
As for ordinary expenses, provision for outstanding claims reserves was recorded in this fiscal year, unlike the previous fiscal year inwhich gain from reversal of outstanding claims provision had been recorded. However, net claims paid showed a year-on-year decrease by
65.2% to JPY 778 million, and provision for outstanding commitments reserves showed a 38.8% decrease from the previous year at JPY
2,058 million due to a fall in underwriting for mid-to-long term transactions. As a result, ordinary expenses showed a 26.7% year-on-year
decrease at JPY 9,649 million.
As a result, ordinary profit amounted to JPY 7, 612 million, an increase by 22.9% from the previous year.
Extraordinary profit amounted to JPY 24,388 million, generated mainly from valuation gains and interest income from receivables
acquired by subrogation that were recovered according to rescheduling agreements.
As a result, net profit for the fiscal year amounted to JPY 31,999 million.

〈 Annual Report FY2016
60〈｜Balance Sheet （As of  March 31, 2017）(Millions of Yen)
Account Title（Assets）

AmountAccount Title

Amount（Liabilities）

Cash and cash equivalents

98,913 Outstanding claims reserves

1,797

Securities

372,933 Reserves for outstanding commitments

37,228

Receivables subrogated by paying claims

206,115 Amount due to the reinsurer

25,9192,573 Deposits received

5,064

Premiums receivable

25,648 Advance insurance premium

1,916

Reinsurance credit

453 Accrued amount payable

3,814

Buildings (Note2）

425 Accrued bonuses

107

Equipment and fixtures（Note3）

558 Reserves for retirement allowance

410

Accounts receivable

539 Other liabilities

255

Deposits

528 Total liabilities

76,511

Software
Allowances for uncollectible receivables

1,908 （Net worth）
127 Capital（136,772） Government investment

169,352

Capital surplus（Note4）

143,977

Retained earnings
Third term period reserve fund carried forward

52,822

Surplus reserves

99,287

Unappropriated retained earnings

31,999Total net worth
Total assets

31,999184,108
497,438

573,948 Total liabilities and net worth

573,948（Note 1）Amounts between JPY 1 million and JPY 0.5 million were rounded up to JPY 1 million. Amounts less than JPY 0.5 million were omitted.
（Note 2）Accumulated depreciation on buildings is JPY 198 million.				
（Note 3）Accumulated depreciation on equipment and fixtures is JPY 174 million.				
（Note 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

98,591（Total）

143,977〉61
Annual Report FY2016 〉

FY2016 Review of Performance FY2016 Financial Results（of which profit for the current year）
Total retained earnings

NEXI's Business

Other assets

About NEXI

Accrued Income

FY2016 Financial Results

FY2016 Financial Results｜Statement of Income （April 1, 2016 - March 31, 2017）(Millions of Yen)
Account Title

AmountOrdinary profit Ordinary income(loss)
Underwriting income
Net premium written（Note2）
Interest income on receivables subrogated by paying claims
Investment income
Income from interest
Interest on securities
Other
Other ordinary income
Ordinary expenses
Underwriting expenses
Net claims paid（Note3）
Provision for outstanding claims reserves

Estimated amount of insurance claims recovery（Note4）
Provision for outstanding commitments reserves
Foreign exchange loss
Operating and administrative expenses
Other
Claim recovery expenses
Other ordinary expenses
Ordinary Profit
Extraordinary Extraordinary income
profit (loss)
Profit relating to in-kind contribution of receivables acquired by government subrogation(Note5)

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

Other extraordinary loss
Extraordinary loss
Losses relating to in-kind contribution of receivables acquired by government subrogation(Note5)
Other extraordinary loss
Net Profit（Note 1）Amounts between 1 and 0.5 million yen were rounded up
to 1 million yen. Amounts less than 0.5 million yen wereomitted.
（Note 2）Breakdown of net premium written
Premium of original insurance written
Refund of premium paid for reinsurance
Premium received for reinsurance
Premium paid for reinsurance（Net）（Note 3）Breakdown of net claims paid
Insurance claims paid
Reinsurance claims recovered（Net）（Millions of Yen）

45,9902,369
526（37,654）
11,231（Millions of Yen）

7,782
（7,004）778（Note 4）Breakdown of the estimated amount of insurance claims
recovery（Millions of Yen）
（１）Capitalized and evaluated amount of subrogatedreceivables in relation to rescheduling agreements①Reversal of provision for uncollectible receivables （432）（２）Capitalized and evaluated amount of subrogatedreceivables in relation to commercial risk claims paid
①Commercial-risk subrogated receivables（396）②Difference of estimated value between thecurrent year and the previous year concerning（28）
subrogated receivables capitalized in line withthe outstanding claims provision③Bad debt loss
2
④Provision for uncollectible receivables
322（３）Subrogated receivables recovered（not capitalized）
（0）
（Net）
（532）

〈 Annual Report FY2016
62〈17,261
11,248
11,231
17
5,690
1
5,690
323
323
9,649
2,718
778
414
（532）
2,058
176
6,586
170
85
85
7,612
24,56919,315
5,220
33
181
48
133
31,999（Note 5）According to the ministerial ordinance concerning thefinance and accounting of Incorporated administrative
agency Nippon Export and Investment Insurance (March
29, 2001, Ministry of Economy, Trade and Investment,
Ordinance No.104), the recording of profit and loss
related to assets invested by the government is madeunder extraordinary income and loss.
（１）
Breakdown of profit related to in-kind contribution ofreceivables acquired by government subrogation
Interest income（Net）（Millions of Yen）

19,315
19,315（２）Breakdown of loss related to in-kind contribution ofreceivables acquired by government subrogation
Recovery expenses
Bad debt loss
Foreign exchange loss
（Net）

（Millions of Yen）

2
0
46
48

｜Statement of Cash Flows （April 1, 2016 - March 31, 2017）(Millions of Yen)Ⅰ．
Cash flows from operating activities
Premiums received

24,524

Reinsurance premiums paid

（23,684）

Insurance claims paid

（7,744）
9,460

Income from recovery of receivables subrogated by paying claims

39,965

Payment of recovered receivables subrogated by paying claims（12,524）

Income from recovery of receivables subrogated to the government

7,207

Payment of recovered receivables subrogated to the government（7,207）

Personnel expenses（1,538）Other operating expenses（4,907）

Other

About NEXI

Reinsurance claims received

295
23,847

Interests received

10,520Net cash provided by (used in) operating activities

34,367Ⅱ．
Cash flows from investing activities
Purchase of securities（34,818）

Redemption and sales of securities

15,000Purchase of fixed assets（1,362）
67

Payment of security deposits（166）

Net cash provided by (used in) investing activities（21,280）

Ⅲ．
Cash flows from financing activities
Capital increase

65,000Net cash provided by (used in) financing activities

65,000Ⅳ．
Foreign exchange difference related to cash and cash equivalents

（55）

Ⅴ．
Net increase (decrease) in cash and cash equivalents

78,033Ⅵ．
Cash and cash equivalents at the beginning of the current year

15,823Ⅶ．
Cash and cash equivalents at the end of the current year

93,855（Note 1）Amounts rounded to the nearest million.
（Note 2）Cash at current year ending is broken down by line item on balance sheet（Millions of Yen）

Total

98,913（5,058）93,855※Other deposits represent the Cuba Fund. Withdrawal from this fund is limited for use in peso only, and for domestic construction anddevelopment projects in Cuba subject to approval from both Japan and Cuba. In view of this nature of the fund, the amount is notincluded in the scope of our normal cash and cash equivalents.

〉63
Annual Report FY2016 〉

FY2016 Review of Performance FY2016 Financial Results

Reversal of security deposits

Cash and cash equivalents
Other deposits※
Balance of cash at the end of the current year

NEXI's Business

Subtotal

FY2016 Financial Results

Notes｜
Ⅰ．Important Accounting Principles
1Accounting procedures for depreciation⑴Depreciation of tangible fixed assets
Depreciation of tangible fixed assets is calculated by adopting astraight-line depreciation method. Useful life and residual values arecalculated based on the same methods and standards stipulated in
the Corporation Tax Act.
⑵Amortization of intangible fixed assets
Amortization of trademark rights is calculated using a straightline depreciation method where the residual value is set at ￥0,in accordance with the estimated useful life stipulated in the
Corporation Tax Act. Amortization of computer software for in-house
use is calculated by a straight-line depreciation method where theusability period (5 years) is used as the estimated useful life andwhere the residual value is set at ￥0.

2Calculation of reserves for retirement allowances andestimates
To prepare for retirement allowance payments to board members
and employees, a reserve is provided based on 100% of the amountof retirement allowances required by the rules for payment of
retirement allowances to board members and by those that apply
to employees, respectively. For 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.

7Calculation of opportunity costs in the statement ofadministrative services costs
Interest rate used for the calculation of opportunity costs relating
to investments by the government : the yield of 10-year government
bonds (0.065%.)   

8Accounting procedure of consumption tax
Consumption tax accounting is based on the“tax included”
method.

9Decommissioning liabilities
Restoration liabilities under the office lease have not been recorded
as decommissioning liabilities because it is impossible to make a fairand reasonable estimate of them due to the unspecified lease period
and the absence of any plans to vacate the currently leased office.

Changes to accounting principles
No major changes to the accounting principles from the previous
fiscal year.

｜Ⅱ．
Financial Instruments
1Financial instruments⑴Management 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.

3Calculation of reserves for outstanding commitments,
outstanding claims reserves, receivables subrogatedby paying claims, and allowance for uncollectible
receivables⑵Financial 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.

Reserves for outstanding commitments, outstanding claims
reserves, receivables subrogated by paying claims, and the allowance
for uncollectible receivables related to receivables subrogated bypaying claims are dealt with 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 the finance and accounting of the Incorporated Administrative
Agency Nippon Export and Investment Insurance”(2001.03.27 TradeNo.2). Uncollectible receivables other than receivables subrogatedby paying claims are individually assessed for recoverability and theestimated amount of unrecoverable claims is included in the reserves.

⑶Financial instruments and risk management①Country risk management
In concluding insurance contracts (that could cause theacquisition of receivables subrogated by paying insurance claims),
NEXI’s Country Risk Analysis Group conducts risk assessments bygathering information through the Berne Union and OECD as well
as researching and evaluating country risk.
②Credit risk management
For the management of credit risk of an export contract
counterparty (overseas buyer), NEXI’s Credit Administration Group
conducts credit check and assessment of overseas buyers.
③Market risk management
Market risk, such as interest rate and price fluctuation associatedwith investments 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, thesecretariat of the Fund Operation Meeting, monitors the bondmarket and liquidity risks.

4Calculation 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.

5Valuation standards and methods for securities①Held-to-maturity securities are valued at amortized cost (using astraight-line method.)②Other securities without market value are stated at cost using themoving average cost method.

6Valuation of foreign-currency receivables and payables
Foreign-currency receivables and payables are converted into
Japanese yen at fiscal year-end exchange rates.

〈 Annual Report FY2016
64〈⑷Supplementary explanation regarding fair value of financial
instruments
Fair value of financial instruments is based on quoted market price.
If the market price is not available, fair value is based on reasonably
assessed value. Fair value of financial instruments is measured
based on certain assumptions and might differ if measured based on
different assumptions.

2Fair value of financial instruments
The carrying amount on the balance sheet, fair value anddifferences as of the end of the fiscal year 2016 are as follows.  
However, financial instruments that are considered extremely difficult
to calculate their fair market values are not included. (Ref. Note 2)(Millions of Yen)

Carrying
Fair value Difference
Amount
93,85593,855－422,325

49,392⑷ Premiums receivable, ⑸ Reinsurance credit, ⑹ Amount due
to the reinsurer, and ⑺ Deposits received
Carrying amount is shown as fair value for (4), (5), (6) and (7),as these are settled within short periods of time and the fairvalue is almost equal to the carrying amount.
（Note 2）Financial instruments considered difficult to calculate fairmarket values
Financial instruments considered extremely difficult to calculate
their fair market values are as follows.

(Millions of Yen)

69,34525,648453
611,627
25,919725,926－－－49,392－－－※Allowance for uncollectible receivables associated with receivables
subrogated by paying claims is deducted.

⑴ Cash and cash equivalents
For cash and cash equivalents, carrying amount is shown asfair value, as these are settled within short periods of time andthe fair value is almost equal to the carrying amount.

5,058⑵Deposits received

5,058

These items are not included in the amounts of“Assets (1) Cashand cash equivalents”
nor in“Liabilities (7) Deposits received”as they
do not have market value and it is considered extremely difficult to
calculate their fair market value.
（Note 3）
Expected payment and redemption amount of money claims
and securities with maturity after the fiscal year end
1 yearor less
Securities
Held-to Maturity
Securities
Receivables
subrogated bypaying claims

Total(Millions of Yen)
More than More than More than More thanMore than Undeter1 year to 3 years to 5 years to 10 years to
20 years -mined※
3 years
5 years 10 years 20 years

10,00016,500－72,700 266,000－－

20,04050,71819,44950,34249,502－

16,06430,04067,21819,449 123,042 315,502－

16,064※Receivables subrogated by paying claims that are in arrears areclassified as“Undetermined.”(Millions of Yen)

Type of
Securities
Fair value >Government andCarrying amount municipal bonds

Carrying
AmountFair value Difference

326,367

377,826

51,459Fair value ≦Government andCarrying amount municipal bonds

46,56644,499（2,067）

Total

372,933

422,325

49,392・There were no held-to-maturity securities sold during the
fiscal year of 2016.
⑶ Receivables subrogated by paying claims
Regarding receivables subrogated by paying claims, allowance
for uncollectible receivables is recorded pursuant to theordinance“Concerning the calculation methods specified by the
Ministry of Economy, Trade, and Industry, pursuant to the articlesof the ministerial ordinance with regard to the finance andaccounting of the Incorporated Administrative Agency Nippon
Export and Investment Insurance”(2001/03/27 Trade No.2).
①Allowance for uncollectible receivables associated withreceivables subrogated by paying political risk claims is
calculated using a ratio that is based on the valuation by
the global financial market regarding repayment prospectsof each debtor country, or by using a given ratio.
②Allowance for uncollectible receivables associated withreceivables subrogated by paying commercial risk claims
is calculated in two different ways. For receivables fromdebtors that are actually or nearly bankrupt, allowanceis calculated by deducting foreclosure estimates andestimated amounts recoverable under a payment
guarantee. For receivables from other debtors, allowance isobtained by calculating loss estimates based on the present
value of estimated future cash flow or estimated amounts
recoverable by foreclosure or under a payment guarantee.
Fair value of receivables subrogated by paying claims
is equal to the carrying value at the fiscal year end less

｜Ⅲ．Notes on retirement benefit plans
1Overview of retirement benefits
At NEXI an unfunded lump-sum retirement allowance plan is adopted
for the payment of retirement allowances to its employees.  Under thesaid plan, employees receive a lump-sum retirement allowance basedon his/her salary and length of service, where the retirement allowanceand retirement benefits are calculated using the simplified method.

2Defined retirement benefit plans⑴Reconciliation between beginning balance and ending balance in aplan using the simplified method
Beginning balance of reserve for retirement allowance(Millions of Yen)

557
（114）
（33）
410

Retirement benefit expenses
Amount of retirement benefits paid
Ending balance of reserve for retirement allowance⑵Profit and loss relating to retirement benefit plan
Retirement benefit expenses calculated under simplified method(Millions of Yen)

  
（114）

｜Ⅳ．Multi-year Obligations
No major multi-year obligations are present.

｜Ⅴ．Subsequent Events
There were no significant subsequent events.

〉65
Annual Report FY2016 〉

FY2016 Review of Performance FY2016 Financial Results⑵ Securities
・Fair value of securities is based on the quoted market value orvalue quoted by financial institutions. The differences between
carrying amount and fair value by type of held-to-maturity
securities (in accordance with the accounting standards forincorporated administrative agencies and notes) are as follows.

⑴Cash and cash equivalents

NEXI's Business（Note 1）
Items pertaining to calculation of fair value measurement offinancial instruments and securities

Carrying Amount

About NEXI

⑴Cash and cash equivalents⑵Securities
Held-to-maturity securities
372,933⑶Receivables subrogated by paying claims
Receivables subrogated by paying claims
206,115
Allowance for uncollectible receivables※ （136,770）(Net)
69,345⑷Premiums receivable
25,648⑸Reinsurance credit
453
Assets562,235⑹Amount due to the reinsurer
25,919⑺Deposits receiverd
7
Liabilities
25,926

allowance for uncollectible receivables, since it approximatesthis net carrying amount.

Notes｜Ⅵ．Account Titles Used by NEXI
1Balance sheet
Account title

Description

Receivables subrogated by Total assets of receivables subrogated by NEXI’s paying claims and the estimated amounts of potential subrogated receivables (recorded
paying claims
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.

Premiums receivable

Premiums receivable associated with insurance applications.

Reinsurance credit

Amounts receivable from the government, such as reinsurance claims.

Outstanding claims reserves

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

Amounts reserved to prepare for possible future claim payments under insurance and reinsurance contracts are recorded based on the
Reserves for outstanding ordinance “Concerning the calculation methods ordained by the Ministry of Economy, Trade, and Industry, pursuant to the articles of thecommitments
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 the reinsurer Amounts payable to the government, such as reinsurance premiums.
Allowance for uncollectible
Amount of receivables subrogated by paying claims after deduction of recoveries that should be paid to the insured.
receivables
Advance insurance premium Insurance premium received with NEXI’s obligation beginning from the next fiscal year or later.

Capital surplus

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

2Statement of Income
Account title
Net premium written

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

Provision for outstanding
Provision for outstanding claims reserves for the current fiscal year.
claims reserves
Net claims paid

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

Estimated amount of insurValuation gains or losses of receivables subrogated by paying insurance claims.
ance claims recovery
Provision for outstanding
Provision for outstanding commitments reserves for the current fiscal year.
commitments reserves
Extraordinary income

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

Extraordinary loss

Recovery and other expenses relating to government-invested assets (receivables subrogated by paying claims).

Ⅶ. Other Accounting Information Necessaryfor Proper Disclosure of the State ofIncorporated Administrative Agencies
1 Establishment of“NEW”NEXI.
Under the partial enforcement of the "Act for Partial Revision of
the Trade and Investment Insurance Act and the Act on Special
Accounts" established on July 17, 2015, Incorporated Administrative
Agency Nippon Export and Investment Insurance (hereafter referred
to as "the Agency") was dissolved on April 1, 2017.  On the same day
Nippon Export and Investment Insurance was established based on
capital contribution from both the government and the Agency, andall assets and liabilities of the Agency were succeeded to Nippon
Export and Investment Insurance.
Special Account for Trade Reinsurance was abolished at the end of
March 2017.
  〈 Annual Report FY2016
66〈2Fund at Banco Nacional de Cuba
With regards to Cuba’s unpaid debt (political risk claims) of 25,289
million yen to NEXI (including the amount corresponding to the insured’sno-coverage portion of the uncollectible receivables), the governmentsof Japan and Cuba came to an agreement on debt relief measures.
According to the agreement, the government of Cuba opened
an account at Banco Nacional de Cuba under the name of "NEXI"(hereafter referred to as“the Fund”) and will accumulate an equalamount to the Fund every year for five years from 2016 to 2020.
The initial payment of 5,058 million yen was deposited in the Fundin October, 2016 and this transaction was recorded as cash and cash
equivalents on NEXI’s balance sheet. An interest rate of 1.5% per annum
has been added to the deposit since the end of the same month. The
withdrawal from the Fund is restricted for use in Cuban Peso only andfor the purpose of domestic development projects in Cuba approvedby both Japan and Cuba. Users of the Fund are to repay NEXI theyen equivalent of the amount withdrawn from the Fund, which will bedeemed as a partial collection of the political risk claims.  Therefore, 5,058
million yen, which is the amount equivalent to the initial deposit made to
the Fund, is posted as deposits received on the balance sheet.

Nippon Export and Investment Insurance

Inquiries

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

Head Oﬃce

Chiyoda First Building, East Wing 5th Floor, 3-8-1
Nishikanda, Chiyoda-ku, Tokyo 101-8359, Japan
Phone : 81-(0)3-3512-7650 Fax : 81-(0)3-3512-7660