ANNUAL REPORT
Nippon Export and Investment Insurance

2018Corporate Philosophy
As the public entity responsible for trade insurance,
our mission is to deliver peace of mind to ourcustomers and contribute to the healthy developmentof Japanese overseas business.

Action Guideline
Ɣ Be alert to changes and meet customer needs withprofessionalism and specialized expertise.
Ɣ Enhance underwriting capacity and capability while
maintaining a strong risk management culture.
Ɣ Respect diversity and work as a team to allow ourorganization to achieve its best.

Message from the
Chairman

I would like to express my deep appreciation for your generous support and cooperation with Nippon
Export and Investment Insurance (NEXI) as we present this annual report.
During 2018, the global economy gradually recovered compared with 2017. On the other hand, uncertainty
about the global economy has been heightened by the economic policies of major countries, including U.S.China trade friction and Britain’s exit from the EU.
In Fiscal Year 2018, the second year since NEXI’s transformation into a stock company, we worked toestablish and reinforce our business foundation as a stock company by formulating basic policies on risk
management in relation to insurance underwriting, as one of our approaches for comprehensive risk control.
We have also embodied our corporate philosophies that covers the most important values as NEXI, andset three action guidelines as basis on which executives and employees can incorporate the corporate
philosophies into their daily activities.
In the trade and investment insurance business, we worked to enhance convenience for clients throughvarious efforts, such as reducing the amount of documents needed to be submitted for insurance
application, and improved insurance products and operations by making further segmentations of insurance
premiums in accordance with level of risk so that we can encourage Japan’s exports of quality infrastructure,
which is being promoted by the government. We actively supported exports by Japanese companies andtheir joint projects with overseas enterprises, which are implemented in third countries, through concluding
memorandums of understanding with regard to mutual assistance between NEXI and global government
entities or export credit agencies including those from China and India.
In addition, we strengthened our efforts to promote liqueﬁed natural gas (LNG)-related projects by expanding
the coverage of Investment and Loan Insurance for Natural Resources and Energy, which supports projects
that contribute to secure a stable supply of energy for Japan.
Furthermore, in order to increase the use of trade and investment insurance, we renewed our website
to make it user-friendly especially for ﬁrst time clients, and strove to promote overseas operations of small
and medium-size enterprises, and overseas sales of the agricultural, forestry, and ﬁshery products throughcollaborations with regional banks and credit associations that are part of our support network for SMEs
overseas business development.
As the economy becomes more global, we remain committed to provide security to numerous clients byoffering quality insurance products and services, which satisfy diversifying business needs in order to also
survive international competition through collaboration between public and private sectors. We appreciate
your continued understanding and support for our business.

Atsuo Kuroda
Chairman and CEO
Nippon Export and Investment Insurance
July 2019

Contents
Corporate Philosophy & Action Guideline ───────── 2
Message from the Chairman ──────────────── 4Highlights ───────────────────────── 6
NEXI Review of Performance
Performance Highlights ─────────────────── 10
Review of Performance ─────────────────── 16
TOPICS ────────────────────────── 20

NEXI Activities
Main Activities ─────────────────────── 22
International Cooperation ────────────────── 28
Underwritten Projects ──────────────────── 30
Underwritten Projects (SMEs exports) ────────────── 36

Insurance Products
Trade and Investment Insurance ― How It Works ──────── 44
Insurance Products to Support Your Business ───────── 45
Application Procedures for Trade and Investment Insurance─── 52

TOPICS ────────────────────────── 56

About NEXI and Organizational Operation
Proﬁle of NEXI ─────────────────────── 58
Business Plan ─────────────────────── 60
Business Operation and Management System ───────── 62
Organization Chart ───────────────────── 64
Access Map ──────────────────────── 65
TOPICS ────────────────────────── 66

FY2018 Financial Results
FY2018 Financial Review────────────────── 68

Financial Statements etc. ────────────────── 69

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

Highlights

Highlights of Business Results for FY 2018

Underwritten Amountapprox. JPY

6.3 trillion

Outstanding Commitment

approx. JPY

Premium Income

approx. JPY

29.4 billion

Recoveries

approx. JPY

Claims Paidapprox. JPY

6Annual Report FY2018

14.0 trillion

33.5 billion

31.1 billion

May 2018

MOU with MIGA

Signed a memorandum of understanding (MOU)
with the Multilateral Investment Guarantee
Agency (MIGA), a member of the World Bank
Group, to promote cooperation between theparties in the ﬁeld of reinsurance.

P23

Sep. 2018

Reinsurance Agreementwith EDCEntered into a One-Stop-Shop Reinsurance
Agreement with the Export Development
Canada (EDC), Canada’s export credit agency(ECA).

P23

Oct. 2018

MOU with EIB

Signed a MOU on cooperation with theEuropean Investment Bank (EIB), aninternational ﬁnancial institution.

P23

Executed a MOU with China Export & Credit
Insurance Corporation (SINOSURE ), the ECA of
China, in conjunction with the holding of theJapan-China Forum on Third Country Business
Cooperation.

P24

MOU with SINOSURE

MOU with ECGC

Nov. 2018

Mar. 2019

Entered into a MOU with the Export Credit
Guarantee Corporation of India (ECGC).

P24

Simplified application
procedures
for Comprehensive
Export Credit Insurance

Simpliﬁed application procedures concerning
general transactions, by eliminating the need tosubmit evidences such as copies of export
contracts.

Expanded the types oftransactions covered
by Investment and
Loan Insurance
for Natural Resources
and Energy

Expanded the coverage of the insurance into thetransactions where Japanese companies
provide natural resources and energy to third
countries or domestic companies based on
certain requirements.

Trilateral MOU
between NEXI, Australia’s
DFAT and Efic

Entered into a Trilateral MOU on cooperation
with the Australia’s Department of Foreign
Affairs and Trade (DFAT ) and the Export Financeand Insurance Corporation (Eﬁc). The
exchanging ceremony of signed MOU
documents was held in the presence ofJapanese Prime Minister Shinzo Abe andAustralian Prime Minister Scott Morrison on thesame day of signing the MOU.

P24

Signed a MOU on cooperation with the Ministryof Economy and Sustainable Development ofGeorgia during the Japan-Georgia Business
Forum, in the presence of Georgia’s Prime
Minister Mamuka Bakhtadze, Japan’sParliamentary Vice-Minister of Economy, Tradeand Industry Akimasa Ishikawa, andAmbassador Extraordinary and Plenipotentiaryof Japan to Georgia Tadaharu Uehara.

P25

MOU with Ministry of
Economy andSustainable Developmentof Georgia

Annual Report FY2018

7

NEXI Review of Performance
Performance Highlights

10

Review of Performance

16

TOPICS

20

NEXI Review of Performance

Performance Highlights
Export Trends
Japan's export value continued to increase by 1.9% year on year to approximately JPY 80.7 trillion in FY2018, mainly due to anincrease in exports of mineral fuel and automobile. Looking at the results by country and region, the export to Asia continued to growby 1.3% to JPY 44.0 trillion, which includes that of People's Republic of China with an increase of 2.9% to JPY 15.6 trillion. The exports
to the U.S. and the EU also rose by 2.9% to JPY 15.6 trillion and by 4.6% to JPY 9.3 trillion, respectively. Meanwhile, the export to theMiddle East decreased by 1.9% to JPY 2.3 trillion.
Japan's export value(Millions of Yen)FY2014FY2015FY2016FY2017FY201874,667,048

74,115,132

71,522,248

79,221,249

80,709,540

5.4

(0.7)

(3.5)

10.8

1.9

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

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

200

100

0
‒100
Outstanding Borrowings
JPY 0

‒200
‒300
Peak of
Insurance Claims
Paid
JPY 341.9 billion

‒400
‒500

Premium income

Recoveries andother income

Claims paid

Outstanding borrowings
at year-end

‒600
‒700

Fiscal Year

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

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

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

57.1 44.4 30.2 16.7 21.6 32.4 49.9

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

0

0

0

65.1 23.0 12.90Note: This data is on a cash basis. Premium income is presented after deducting returned premiums.

10

Annual Report FY2018

0

0

3.7

2.4

3.8

0

0

0

17.2 10.4
0

0

8.6

8.4

4.4 12.2

3.1 22.4

7.8 19.2 33.5

0

0

0

0

0

0

0

0

0

(Billions of Yen)◆ Underwritten Amount by Insurance TypeThe underwritten amount decreased by 13.9% year on year to approximately JPY 6.3 trillion in FY2018. This is mainly due to declining
performance in Export Credit Insurance and Overseas United Loan Insurance, affected by a decrease in the number of large scaletransactions and overseas-plant related projects. Meanwhile, Overseas Investment Insurance increased by 11.0% to JPY 0.7 trillion.

NEXI Review of
Performance

Underwritten Amount

(FY)

0.1
0.4

5.3

2016

0.1
0.6

5.0

2018
1

2

Export Credit Insurance

0.5

0.5 0.2 7.8

3

4

Buyer's Credit Insurance

0.7

0.4 0.2 7.3

0.3 0.2 6.3

5

6

Overseas Investment Insurance

8 (Trillions of Yen)

7

Overseas Untied Loan Insurance

Insurance Products

0

0.0

0.3 8.5

0.4 0.2 6.3

5.9

2017

0.8

0.3

6.4

2015

0.2 0.5

NEXI Activities

6.7

2014

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

◆ Underwritten Amount by Region
Asia continued to account for the largest share with 52.5% (approximately JPY 3.5 trillion), followed by the Middle East with 9.9% (JPY
0.7 trillion).

1.3
49.4

2017

8.9

9.0

8.9

5.6

7.5

3.9

5.7

6.6

4.5 4.1 2.0

1.2
52.5

2018

0

9.9

20

Asia

Middle East

Central America

40
Europe9.760South America

9.5

80

AfricaNorth America

100 (%)

International organizations

About NEXI and
Organizational Operation(FY)

Oceania

FY2018 Financial Results◆ Top Ten Countries and Regions for Underwritten Amount in FY2018(Millions of Yen)

Rank

Country/Region

Underwritten amountComposition

Rank

Country/Region

Underwritten amountComposition

1Indonesia

691,831

10.3%

6

Belgium

284,412

4.2%

2

China

554,526

8.3%

7

Saudi Arabia

249,135

3.7%

3

Thailand

512,330

7.6%

8

Taiwan248,188

3.7%

4

Korea

358,554

5.4%

9

U.S.A

238,727

3.6%

Panama330,023

4.9%

10

Vietnam

232,4643.5%

5(ﬂag of convenience vessel)

Annual Report FY2018

11

NEXI Review of Performance

Performance Highlights
Outstanding Commitment◆ Outstanding Commitment by Insurance TypeThe outstanding commitment decreased by 2.5% year on year to approximately JPY 14.0 trillion in FY2018.
(FY)

2014

7.8

1.1

1.5

3.5

0.8

2015

8.0

0.9

1.5

3.3

0.8

2016

7.4

0.9

1.5

3.4

2017

7.5

0.9

1.5

3.5

2018

7.0

0

1

2

3

0.9

4

Export Credit Insurance

5

6

7

Buyer's Credit Insurance

1.6

8

9

0.8
0.9

3.6

10

11

Overseas Investment Insurance

12

14.6
14.5

14.1
14.3

0.9

14.0

14

15

13

16 (Trillions of Yen)

Overseas Untied Loan Insurance

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

◆ Outstanding Commitment by Region
Asia accounted for the largest share with 47.5% (approximately JPY 6.9 trillion), followed by the Middle East with 13.4% (JPY 1.9
trillion).
(FY)

2017

45.5

2018

47.5

0
Asia

12

13.5

Annual Report FY2018

North America

6.8

13.4

20
Middle East

6.4

40
AfricaEurope60
International organizations

6.4

7.1

6.5

7.2

4.6

6.0

4.7 4.5 4.3

6.4

5.1

80
South America

4.3

100 (%)
Central America

Oceania

NEXI Review of
Performance

Premium Income
Premium income decreased by 47.7% year on year to approximately JPY 29.4 billion in FY2018.
(FY)
73.7

2014
2015

51.5
46.5

2016

NEXI Activities

2017

56.1
29.4

2018
0

20

40

60

80
(Billions of Yen)

Note: For details please see page 18.

◆ Premium Income by Insurance Type

Trade Insurance for Standing Orders
from Specific Buyers 0.9%

Buyer's
Credit Insurance
4.9%

Export Bill Insurance 0.4%
Comprehensive Export Insurancewith Simplified Procedure 0.4%

Reinsurance
7.1%

Insurance Products

Export Credit Insurance accounted for the largest
share with 41.0% (approximately JPY 12.0 billion),
followed by Overseas Untied Loan Insurance with23.9% (JPY 7.0 billion), and Overseas Investment
Insurance with 21.1% (JPY 6.2 billion).

Export Credit Insurance
for SMEs and AFF Sector 0.3%

Overseas
Investment
Insurance
21.1%

Prepayment ImportInsurance 0.0%

Export Credit
Insurance
41.0%

Overseas
Untied Loan
Insurance 23.9%

The amount of recoveries decreased by 0.6% year on year to approximately JPY 31.1 billion in FY2018. Recoveries of claims
associated with political risk events, including debt rescheduling, accounted for 97% (JPY 30.1 billion). The remaining 3% (JPY 1.1 billion)
was associated with commercial risk events.
(FY)
32.1

2014

3.6

2016

35.7
0.2

0.3

44.1

2017

24.7

0

20

1.1

25

44.5

31.3

6.6
30.1

2018

40.9

FY2018 Financial Results

40.7

2015

About NEXI and
Organizational Operation

Recoveries

30

31.1

35

40
Political Risk Event

45(Billions of Yen)

Commercial Risk Event

Annual Report FY2018

13

NEXI Review of Performance

Performance Highlights
Claims Paid
Claims paid increased by 74.1% year on year to approximately JPY 33.5 billion in FY2018, due to large claims paid for commercial risk
events.
( FY )

2014 0.9 2.2

3.1
18.6

2015
2016 1.0

6.8

3.8

22.4

7.8

0.2
19.2

19.0

2017
6.9

2018

0

33.5

26.6

10

20

30

40
( Billions of Yen)

Political Risk Event

Commercial Risk Event◆ Claims Paid by Region
Asia accounted for the largest share with 37.2% (approximately JPY 12.5 billion).

Overall

Political Risk Event
Europe 3.3%
North America 0.6%
CentralAmerica 0.1%

Africa8.8%

Middle East
16.9%

Asia
37.2%

South America
33.1%

14

Annual Report FY2018

Commercial Riek Event

Europe0.0%

Europe 4.2%
North America 0.4%

North America
1.0%

CentralAmerica 0.2%

Middle East
13.3%

South America
26.1%
Africa42.5%
Middle East
30.4%

Asia
47.0%
South America
34.9%

Occurrence of Events by Risk Type – Year-on-Year Change –The reported occurrence of risk events totaled approximately JPY 107.7 billion. The amount of political risk event increased
substantially compared to the previous year, because of a rise of events in Asia and the Middle East. Meanwhile, that of commercial risk
event continued to grow due in part to payment arrears by buyers in Asia and the Middle East.
Overall claims paid totaled approximately JPY 33.5 billion. Payment for political risk event increased dramatically from the previous
year because of claim payment for natural disasters, etc. As for commercial risk event, claim payment due to late payment rose.

NEXI Review of
Performance

Insured Events in FY2018 ( Based on the data as of May 15, 2019 )Occurrence ofEventsClaims Paid

FY2016FY2017NEXI Activities( Millions of Yen )Type of Risk

Year-on-year Change (%)

FY2018

Political Risk

9,506

5,663

36,597546.2%

Commercial Risk

24,02656,092

71,14826.8%

Amount total

33,532

61,755

107,745

74.5%

Political Risk

1,000

214

6,923

3135.0%Commercial Risk

6,782

19,02926,573

39.6%

Amount total

7,782

19,24333,49774.1%

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

Occurrence of Events and Claims Paid ( FY2016 – FY2018 )Political Risk Event( Millions of Yen )
9,506

2016

5,663

6,782
56,092

2017

19,029214
36,5972018

0

71,1482018

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

26.5730

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

Claims Paid

Occurrence of Events

Occurrence of Events

Claims Paid

Occurrence of Events by Region
Approximately 80% of political risk events occurred in Asia and the Middle East in FY2018. The remaining 20% occurred in North,Central and South America and Africa.

About NEXI and
Organizational Operation

6,923( Millions of Yen )24,026

2016

1,000

2017

Commercial Risk Event

Occurrence of Events by Region ( FY2018 )( Millions of Yen )30,000Commercial Risk Event
60,00035,00028,928FY2018 Financial Results

Political Risk Event( Millions of Yen )53,58450,00025,00040,00020,00030,00015,00020,00010,0005,000

10,452
2,906

3,324

0
t
s
p
a
rica
rica
o e
E
Eur al Ame h Ame
dle
t
Mid
tr
u
n
o
&
e
S
C
Asia
th &
Nor
0

10,000

1,440

a
Afric

0

1,808

0

ia
ean

Oc

t

rica
rica
ope
Eur al Ame h Ame
tr
ut
n
o
e
S
C
th &

as
le E

idd

Asia

&M

262

4,565

a
Afric

476

nia
cea

O

Nor

Annual Report FY2018

15

NEXI Review of Performance

Review of Performance
Underwritten Amount◆ Underwritten Amount by Insurance TypeType of Insurance(Millions of Yen)FY2014FY2015FY2016FY2017FY2018

Export Credit Insurance

6,737,681

6,438,129

5,344,820

5,915,423

5,030,034

79.9(15.0)One year or less

3,798,162

3,304,188

2,745,229

3,093,390

2,908,306

46.2

(6.0)

More than one year

2,939,518

3,133,941

2,599,591

2,822,033

2,121,728

33.7(24.8)

Trade Insurance for Standing
Orders from Specific Buyers

8,054

5,463

5,308

8,115

7,443

0.1

(8.3)

Export Credit Insurance for SMEs
and AFF Sector

4,310

9,290

9,640

8,449

9,812

0.2

16.1

Comprehensive Export Insurancewith Simplified Procedure

36,023

40,956

47,106

51,96358,0240.9

11.7

Export Bill Insurance

12,062

13,25812,255

11,82313,023

0.2

10.1

84

454

98

981

214

0.0

(78.2)

Overseas Investment Insurance

488,604

503,508

401,538

641,568

712,045

11.3

11.0

Buyer's Credit Insurance

156,422

256,135

61,898138,372

37,0830.6(73.2)

Overseas Untied Loan Insurance

835,625454,643366,722422,123

342,565

5.4(18.8)

Reinsurance

206,996

93,42685,297

115,971

86,2191.4(25.7)

8,485,862

7,815,262

6,334,680

7,314,788

6,296,462

100.0(13.9)

Prepayment Import Insurance

Total

Composition(%)

Year-on-Year
Change (%)(Note 1) The underwritten amount is based on the amount as determined at the policy issue date. The total amount is based on the actual underwritten amountcalculated by using the exchange rate on the conclusion date of the contract, not on the insured amount of policies with a special clause for foreign currency
risk. (The same applies to the table below.)(Note 2) In accordance with the BU rules, Export Credit Insurance for capital goods is classiﬁed into transactions with more than one year. (The same applies hereafter.)(Note 3) The ﬂoating interest coverage case is calculated based on the interest rate at the time of the conclusion of the contract. (The same applies to the table below.)◆ Underwritten Amount by Region
Region(Millions of Yen)FY2014FY2015FY2016FY2017FY20184,313,329

4,103,595

3,711,316

3,878,278

3,517,050

52.5

(9.3)

Middle East

503,204

1,311,427

571,306

696,610

661,380

9.9

(5.1)

Europe163,994

743,348578,369

699,293

638,012

9.5

(8.8)

North America

957,074

383,047

250,236

303,599

274,361

4.1

(9.6)

Central America

181,088789,353

723,744703,342

647,942

9.7

(7.9)

South America

900,820

377,503251,170

438,422442,875

6.6

1.0

Africa691,986

317,625

373,657

590,893304,2544.5(48.5)

Oceania

621,011

137,866

119,886

100,603

81,5271.2(19.0)

International organizations

830,584

293,575

177,508445,278

134,460

2.0(69.8)

Asia

Composition(%)

Year-on-Year
Change (%)(Note 1) Classiﬁcation used to compute the above amount: Pre-shipment: Country of the shipment consignee; Post-shipment: Country of the payer (when guaranteed,country or international organization of the guarantor).
(Note 2) Since the amount is recorded twice as the country of destination and as the country of payment, the total amount does not match with that of underwritten
amount by insurance type.
(Note 3) The amount is classiﬁed into international organizations instead of regions, when guaranteed by an international organization.
(Note 4) Central Asia is included in Asia. (The same applies hereafter.)(Note 5) Central and Eastern Europe and Russia are included in Europe. (The same applies hereafter.)

16

Annual Report FY2018

◆ Outstanding Commitment by Insurance TypeType of Insurance(Millions of Yen)FY2014FY2015FY2016FY2017FY2018

Export Credit Insurance

7,824,348

7,988,439

7,446,773

7,538,669

6,994,430

50.0

(7.2)

One year or less

3,346,374

3,056,828

2,649,163

2,497,946

2,417,727

17.3

(3.2)

More than one year

4,477,974

4,931,611

4,797,610

5,040,723

4,576,703

32.7

(9.2)

Trade Insurance for Standing
Orders from Specific Buyers

9,748

9,375

7,313

9,868

11,3830.1

15.4

Export Credit Insurance for SMEs
and AFF Sector

1,449

3,161

3,028

2,817

3,817

0.0

35.5

Comprehensive Export Insurancewith Simplified Procedure

11,84010,531

11,87913,003

16,4150.1

26.2

Export Bill Insurance

2,757

2,851

3,283

3,556

3,224

0.0

(9.3)

82

301

0

979

208

0.0

(78.7)

Overseas Investment Insurance

1,519,798

1,457,399

1,460,533

1,528,398

1,596,806

11.4

4.5

Buyer's Credit Insurance

1,051,619

923,292922,836

866,474

923,657

6.6

6.6

Overseas Untied Loan Insurance

3,450,177

3,348,179

3,439,069

3,549,807

3,608,086

25.8

1.6

745,459

740,210821,174

827,116

830,151

5.9

0.4

14,617,278

14,483,737

14,115,888

14,340,688

13,988,179

100.0

(2.5)

Total

Insurance Products

Reinsurance

Year-on-Year
Change (%)

NEXI Activities

Prepayment Import Insurance

Composition(%)

NEXI Review of
Performance

Outstanding Commitment (As of fiscal year end)

(Note 1) The total amount is based on the actual underwritten amount calculated by using the exchange rate at the end of each ﬁscal year (including the outstanding
amount underwritten in previous years), not on the insured amount of policies with a special clause for foreign currency risk. (The same applies to the table below.)(Note 2) The ﬂoating interest coverage case is calculated based on the interest rate at the end of each ﬁscal year. (The same applies to the table below.)

Region(Millions of Yen)FY2015FY2016FY2017FY2018

Asia

7,052,139

6,768,579

6,941,039

6,896,936

6,926,035

47.5

0.4

Middle East

1,832,577

2,413,796

2,198,618

2,050,197

1,945,372

13.4

(5.1)

Europe1,535,915

1,368,305

1,105,592

1,070,642

930,638

6.4(13.1)

North America

1,001,638

981,989

912,846

977,828

984,054

6.8

0.6

Central America

606,627

687,931755,757

769,735

653,945

4.5(15.0)South America

1,154,494

925,309

767,445695,229685,649

4.7

(1.4)

Africa800,277

680,693751,177965,515

952,503

6.5

(1.3)

Oceania

792,051

747,300

725,637

654,853624,052

4.3

(4.7)

International organizations

225,035

243,752

282,677

1,084,413

868,089

6.0(19.9)

Composition(%)

Year-on-Year
Change (%)

FY2018 Financial Results

FY2014

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

Annual Report FY201817

NEXI Review of Performance

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

FY2014

Export Credit Insurance
One year or lessMore than one year
Trade Insurance for Standing
Orders from Specific Buyers
Export Credit Insurance for SMEs
and AFF Sector
Comprehensive Export Insurancewith Simplified Procedure
Export Bill Insurance
Prepayment Import Insurance
Overseas Investment Insurance
Buyer's Credit Insurance
Overseas Untied Loan Insurance
Reinsurance
Total

FY2015(Millions of Yen)FY2016FY2017FY201815,1886,247
8,941

13,8585,081
8,777

14,8385,240
9,598

14,2136,600
7,613

12,032
5,441
6,591

Composition
(%)
41.0
18.5
22.4

Year-on-Year
Change (%)(15.4)(17.6)(13.4)

281

194

166

340

259

0.9

(23.9)

39

83

85

72

84

0.3

16.8

85

99

105

116

127

0.4

9.4

111
0
5,035
6,586
38,514
7,840
73,679131
3
5,802
13,03015,231
3,038
51,469

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

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

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

0.4
0.0
21.1
4.9
23.9
7.1
100.0

7.9
(22.8)
1.4(77.5)(73.2)(19.4)(47.7)(Note) The premium income is recorded at the start of the insurer’s obligation period, unlike the underwritten amount based on the policy issue date. Therefore, thepremium income and underwritten amount may be recorded in different ﬁscal years.

Insurance Claims Paid
◆ Claims Paid by Insurance Type and Risk
Type of Insurance
Export Credit Insurance
Trade Insurance for Standing Orders
from Specific Buyers
Export Credit Insurance for SMEs and
AFF Sector
Comprehensive Export Insurance with
Simplified Procedure
Export Bill Insurance
Prepayment Import Insurance
Overseas Investment Insurance
Buyer's Credit Insurance
Overseas Untied Loan Insurance
Reinsurance
Total

99

0

99

221

0

221

0

0

0

13

0

13

0

0

0

0.0 (100.0)

1

0

1

2

0

2

136

0

136

193

0

193

78

0

78

0.2

8

0

8

0

0

0

13

0

13

3

0

3

0

0

0

0.0 (100.0)

0
0
10
0
10
0
0
0
0
0
100
0 2,941 2,941
00
0 1,807 1,807
0
0 13,839 9,253
0 9,2530891 1,325
0 1,325
214 19,029 33,497 6,923 26,573

0.0
−
0.0
−
8.8 2,837.8
5.4−
27.6 (33.1)
4.0
48.6
100.0
74.1

0
0
0
0
0
285
3,102

0
0
0
0
0
31
0
31
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
100
0
0
0
0
0
114
0
114
0
0
0
0
0
0 1,047
0 1,047 13,839
285
0
245
0
245 2,943
0 2,943891
867 2,235 22,395 18,571 3,824 7,782 1,000 6,782 19,243◆ Claims Paid by Region
RegionAsia
Middle East
EuropeNorth America
Central America
South America
AfricaOceania
Total

18

Annual Report FY2018(Millions of Yen)FY2014FY2015FY2016FY2017FY2018
Political Commercial
Political Commercial
Political Commercial
Political Commercial
Political Commercial Composition Year-on-Year
(%)
Risk
Risk
Risk
Risk
Risk
Risk
Risk
Risk
Risk
Risk
Change (%)
2,709
582 2,127 21,926 18,571 3,355 3,499 1,000 2,499 4,205
114 4,091 18,082 2,175 15,907
54.0 330.0(59.3)(Millions of Yen)FY2014FY2015FY2016FY2017FY2018
Political Commercial
Political Commercial
Political Commercial
Political Commercial
Political Commercial Composition Year-on-Year
(%)
Risk
Risk
Risk
Risk
Risk
Risk
Risk
Risk
Risk
Risk
Change (%)
1,334
0 1,334 1,059
0 1,059 3,662
0 3,662 4,385
112 4,273 12,477
0 12,477
37.2 184.5
459
459
0 1,472
0 1,472
872
29
843
287
2
286 5,646 2,103 3,543
16.9 1,867.2
869
0
869
24
20
4
245
0
245
542
0
542 1,115
1 1,114
3.3 105.7
0
0
0
0
0
0
503
0
503
25
0
25
187
71
116
0.6 648.0
0
0
0
980
0
980
0
0
0
0
0
0
40
0
40
0.1
−
440
408
31 18,584 18,551
33 1,384
320 1,064 13,940
100 13,840 11,090 1,807 9,283
33.1 (20.4)
0
0
0
276
0
276
884
652
233
65
0
65 2,941 2,941
0
8.8 4,424.6
0
0
0
0
0
0
232
0
232
0
0
0
0
0
0
0.0
−
3,102
867 2,235 22,395 18,571 3,824 7,782 1,000 6,782 19,243
214 19,029 33,497 6,923 26,573 100.0
74.1

◆ Recoveries by Risk
Type of Risk

FY2014(Millions of Yen)FY2015FY2016FY2017FY2018Composition (%) Year-on-Year Change (%)

Political Risk

32,137

40,66744,141

24,69630,068

96.6%

21.8%

Commercial Risk

3,572

201

327

6,575

1,052

3.4%

-84.0%

Total

35,70840,86744,46831,271

31,121

100.0

-0.5%

FY2014(Millions of Yen)FY2015FY2016FY2017FY2018Composition (%) Year-on-Year Change (%)

8,979

9,039

5,895

1,995

2,368

7.6%

18.7%

Middle East

11,227

11,528

11,953

17,374

11,46136.8%-34.0%

Europe

2,860

572

594

713

683

2.2%

-4.2%

1

1

4

6

81

0.3%

1252.9%Central America

3,015

1,519

1,534

1,472

1,701

5.5%

15.6%

South America

2,361

10,771

20,337

9,024

14,193

45.6%

57.3%

Africa

7,266

7,437

4,152

657

629

2.0%

-4.3%

0

0

0

29

4

0.0%

-87.1%

35,70840,86744,46831,271

31,121100.0%-0.5%

Oceania
Total

Recoveries by risk type
The total recovery amount in FY2018 declined by 0.5% year on year (JPY 0.2 billion) to JPY 31.1 billion from JPY 31.3 billion.
Looking at the results by risk type, the recovery amount related to political risk events, including those relating to Paris Clubdebt rescheduling rose by 21.8% year on year to JPY 30.1 billion. Meanwhile, that of commercial risk events declined by 84.0%
year on year to JPY 1.1 billion.

About NEXI and
Organizational Operation

Recoveries in FY2018

Insurance Products

Asia

North America

NEXI Activities◆ Recoveries by Region
RegionNEXI Review of
Performance

Recoveries

FY2018 Financial Results

Recoveries by region and country
By region, the recovery amount in South America accounted for about half (45.6%) of total recoveries, amounting to JPY
14.2 billion. The amount includes JPY 13.3 billion in the Argentine Republic and JPY 0.6 billion in the Republic of Ecuador.
Middle East accounted for the second largest share of recoveries with about 40% (36.8%), amounting to JPY 11.5 billion.
The amount includes JPY 9.4 billion in the Republic of Iraq and JPY 1.7 billion in Jordan.
Asia was third with 7.6% of total recoveries, amounting to JPY 2.4 billion. This includes approximately JPY 1.9 billion inIndonesia and JPY 0.2 billion in the People’s Republic of China.
The following is the data for other regions in descending order: JPY 1.7 billion in Central America, including JPY 1.7 billion in
the Republic of Cuba; JPY 0.7 billion in Europe, including JPY 0.6 billion in the Republic of Serbia and JPY 0.1 billion in Bosnia
and Herzegovina; and JPY 0.6 billion in Africa, including JPY 0.5 billion in the Arab Republic of Egypt.

Annual Report FY201819

TOPICS

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

Case

Case

1

2

I am thinking ofI am thinking of making

launching business

new investment and/orwith new buyers.

obtaining financing.

Case

Case

3

4

The amount of export

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

pre-shipment period and/or
difficulty in resale.

Case

Case

5

6

The payment method has

I would like to hedge risk inchanged from payment up front

transactions related to specificto post-shipment remittance.

countries with country risks.

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

20

Annual Report FY2018

NEXI Activities
Main Activities

22

International Cooperation

28

Underwritten Projects

30

Underwritten Projects (SMEs exports)

36

NEXI Activities

Main Activities
Supporting Strategic Priority Sectors◆ Support for Overseas Infrastructure
Development◆ Support for Aircraft and Ship
Sectors

The Japanese government is working to increase overseas
orders of infrastructure systems for Japanese corporations
and to make international contributions through high-quality
infrastructure exports based on the “Infrastructure Systems
Export Strategy” (adopted at the Ministerial Meeting on Strategy
Relating to Infrastructure Export and Economic Cooperation) and“Partnership for Quality Infrastructure.”In FY2018, NEXI provided loan insurance for the Oman/
Sharqiyah Seawater Desalination Project as part of its efforts
related to the water business overseas, which the Japanese
government has announced to strengthen its support for. This
was the ﬁrst time that NEXI provided loan insurance for project
financing targeting a seawater desalination plant. NEXI willcontinue to actively support the export of infrastructure.

For the aircraft sector, NEXI is ready to support the exportof the Mitsubishi SpaceJet developed by Mitsubishi Aircraft
Corporation by providing the loan insurance. Turning to theexport of Boeing aircraft, which many Japanese companies
are involved in as program partners/suppliers, NEXI supports
the export of aircraft components by Japanese heavy industrial
companies by underwriting reinsurance for the Export Credit
Agencies.
In the ship sector, orders temporarily fell because of the 2008
financial crisis, but there are signs of a recovery for various
reasons, including exports being more competitive due to theweaker yen and growing demand to replace current vessels with
fuel-efﬁcient models. In FY2018, NEXI provided insurance for one
bulk carrier that will transport steel and other products.

◆ Securing of Stable Supply of
Natural Resources and Energy
Securing a stable supply of mineral resources and energy is
an important policy concern for Japan. In line with the policyof the Ministry of Economy, Trade and Industry’s Agency for
Natural Resources and Energy, NEXI provides support forliquefied natural gas ( LNG ) projects. At the LNG ProducerConsumer Conference held in October 2018, NEXI explained its
policy on LNG projects. As part of its support for countries thatimport LNG, NEXI will actively consider supporting LNG importinfrastructure projects particularly in Asian countries. In October
2018, NEXI provided loan insurance for the Jawa 1 LNG to
Power Project in Indonesia. Such support for a so-called LNG to
Power project, which integrates power generation business and
LNG import business, is in line with the above policy.
Moving forward, NEXI will continue to assist efforts that
stimulate LNG business by supporting projects related to both
LNG producers and consumers in order to establish a stablesupply of energy resources for Japan.

22

Annual Report FY2018( Photo provided by Mitsubishi Aircraft Corporation )NEXI Review of
Performance

Promoting Collaboration in Third Countries◆ Conclusion of Reinsurance Cooperative
Agreement with Multilateral Investment
Guarantee Agency

In October 2018, NEXI concluded an MOU on cooperation
with the European Investment Bank ( EIB ) , an international
financial institution. The signing ceremony was held in thepresence of Japan’s Minister of Economy, Trade and Industry
Hiroshige Seko, Japan’s Minister for Foreign Affairs Taro Kono,
and Vice-President of the European Commission Jyrki Katainen.
The aim of the MOU is to facilitate the development of projects
that will socially and economically benefit Japan, Europe, andthird countries by establishing a framework for cooperation
between Japanese and European government financial
institutions regarding projects that fall within each institution’s
mission, both within and outside of Europe.
As Japan and the European Union (EU) signed an Economic
Partnership Agreement ( EPA ) in July this year, the bilateral
economic relationship is expected to grow even deeper.
Cooperation between NEXI and the EIB will help strengthen ties
between Japan and the EU in not only trade but also investment,
thus contributing to the government policies of both Japan andthe EU and meeting the expectations for government financial
institutions.

FY2018 Financial Results

NEXI concluded a One-Stop-Shop Reinsurance Agreementwith the Export Development Canada (EDC), Canada’s ECA.
While NEXI already signed a reinsurance agreement for the shortterm (less than 2 years) export insurance with EDC in 2012, thisreciprocal agreement is for medium- and long-term transactions.
The agreement enables NEXI and EDC to provide morecomprehensive support for exports by Japanese and Canadiancompanies, and is expected to increase large-scale exports tothird countries jointly carried out by companies of both countries.

◆ Conclusion of MOU with European
Investment Bank

About NEXI and
Organizational Operation◆ Conclusion of Reinsurance
Agreement with Export
Development Canada( Document exchange ceremony )Insurance Products( Document exchange ceremony )NEXI Activities

In May 2018, NEXI concluded a reinsurance cooperative
agreement with the Multilateral Investment Guarantee Agency( MIGA ) , a member of the World Bank Group that provides
investment guarantees. The document exchange ceremony
was held at the Japan Africa Public-Private Economic Forumattended by Japan’s Minister of Economy, Trade and Industry
Hiroshige Seko and South Africa’s Minister of Trade and Industry
Rob Davies.
This memorandum of understanding (MOU) on cooperation
was signed to clarify reinsurance procedures between NEXI
and MIGA, to leverage the strengths of both NEXI and MIGA bybuilding a framework for greater cooperation, and to contributeto effective project development for overseas investments by
Japanese companies.

( Document exchange ceremony )Annual Report FY201823

NEXI Activities

Main Activities◆ Conclusion of MOU with the China
Export and Credit Insurance Corporation
and Resumption of Bilateral Meetings
between Japan and China
In October 2018, NEXI concluded an MOU with the China
Export and Credit Insurance Corporation (SINOSURE), China’s
ECA at the Japan-China Forum on Third Country Business
Cooperation. The MOU aims to establish a cooperative
framework where Japanese and Chinese companies will work
together to participate in projects in third countries, resulting inproviding effective support for developing the local infrastructure.
Based on the MOU, the first bilateral meeting was held in
November 2018, where NEXI and SINOSURE shared informationon their recent operations and exchanged views on how to meet
requests for ECAs such as risk management and providing
reinsurance.
It is expected to set up highly beneﬁcial projects to concernedcountries, based on the infrastructure’s openness, transparency,
economic viability and ﬁscal sustainability. NEXI and SINOSURE
will work together on initiatives to developing such projects.

( Photo provided by Japan External Trade Organization (JETRO), JapanChina Forum on Third Country Business Cooperation )◆ Conclusion of MOU with Export
Credit Guarantee Corporation ofIndia
In October 2018, NEXI concluded an MOU with the Export
Credit Guarantee Corporation of India (ECGC), India’s ECA.
Under the policy of “Make in India,” the Indian government
aims to promote investments by Indian and foreign companies
mainly in the manufacturing industry. In response, Japan’s public
and private sectors are working together to capture a strong
demand in India and undertake even more projects that willcontribute to bilateral economic and social development. The
conclusion of the MOU comes as the cooperative framework
between the governmental ﬁnancial institutions of two countries
is expected to play a role to support the exports and investmentsof Japanese ﬁrms, contribute to economic development of bothcountries, and help projects in third countries in Africa and otherregions with setting India as a base.
Promoting cooperation between NEXI and ECGC will also
contribute to realizing the idea of “Free and Open Indo-Paciﬁc,”

24

Annual Report FY2018

the goal of which is to secure international peace, stability andprosperity.

( Signing ceremony )◆ Conclusion of Trilateral MOU between
NEXI and two Australia’s institutions:
Department of Foreign Affairs and Tradeand Export Finance and Insurance
Corporation
In November 2018, NEXI concluded a trilateral MOU on
cooperation with Australia’s Department of Foreign Affairs andTrade (DFAT), and the Export Finance and Insurance Corporation(Eﬁc), Australia’s ECA. The document exchange ceremony washeld in the presence of Japan’s Prime Minister Shinzo Abe andAustralia’s Prime Minister Scott Morrison. With the global demandfor infrastructure expected to continue to grow especially in Asia,
the MOU aims to build a cooperation framework between NEXI,DFAT and Eﬁc. It is expected to develop projects that are in linewith the concept of high-quality infrastructure exports and thosethat balance environmental conservation and economic growthsuch as renewable energy projects, corresponding to a current
global trend.
Since the signing of a reinsurance agreement with Eﬁc in 2005,
NEXI has provided support for LNG projects in Independent
State of Papua New Guinea and the Ichthys LNG project inpartnership with Eﬁc. Based on the relationship with Eﬁc that has
been built up over the years, NEXI will also promote discussions
on cooperation with DFAT.

( Source: Ofﬁcial Website of the Prime Minister of Japan and His Cabinet( https://www.kantei.go.jp/jp/98_abe/actions/201811/16australia1.html ) )NEXI Activities

In March 2019, NEXI signed an MOU on cooperation with the
Ministry of Economy and Sustainable Development of Georgia.
The signing ceremony was held during the Japan-Georgia
Business Forum, attended by Georgia’s Prime Minister Mamuka
Bakhtadze; Japan’s Parliamentary Vice-Minister of Economy,
Trade and Industry Akimasa Ishikawa; and Ambassador
Extraordinary and Plenipotentiary of Japan to Georgia Tadaharu
Uehara. The MOU aims to promote exports between the twocountries and support the entry of each country’s companies into
the other country’s markets. With the conclusion of this MOU,
NEXI will develop the environment in order to further strengthen
not only the economic activity of both countries on a private
sector basis but also the business activities of companies in bothcountries.

NEXI Review of
Performance◆ Conclusion of MOU with Ministryof Economy and Sustainable
Development of Georgia( Signing ceremony )◆ Berne Union Meetings◆ Training Course for Export Credit
Experts
In January 2019, NEXI invited mid-level staffers of ECAs andsupervisory agencies of various countries, particularly those in
Asia and Africa, to its training course. The purpose of the training
is to further expand trade and investment insurance in theparticipants’ countries and improve their skills in countries andregions that are on their way to developing trade and investment
systems. At the training, lectures were provided on a wide rangeof topics, including the trade and investment insurance, various
products that NEXI handles, rate schemes, OECD and otherinternational rules, and NEXI’s efforts related to the environmentand society.

◆ Bilateral Meetings

FY2018 Financial Results

NEXI holds regular bilateral meetings with ECAs andgovernment officials of countries such as People's Republicof China, Republic of Korea, Federal Republic of Germany,
French Republic, and Republic of Austria to share informationand exchange candid opinions on various topics including the
global ﬁnancial situation and each country’s issues and efforts.
The meetings, each held usually once a year, are helpful infurther strengthening bilateral ties and keeping up with trade andinvestment insurance trends in various countries.

About NEXI and
Organizational Operation

The Berne Union ( the International Union of Credit andInvestment Insurers) is a forum in which ECAs, internationalorganizations and private insurers from around the world
discuss common issues related to export credit insurance andinvestment insurance from a technical perspective. Since the ﬁrst
meeting in 1934 in Berne, Swiss Confederation, its membershiphas grown to a total of 84 as of April 2019.
In 2018, the spring meeting took place in March in Kilifi,
Republic of Kenya, and the fall meeting was held in October inParis, French Republic. NEXI attended the respective meetings
to compare notes with other members regarding export credits.

Insurance Products

Strengthening Partnerships with Overseas Organizations( Certiﬁcation of Completion ceremony )Annual Report FY201825

NEXI Activities

Main Activities
Supporting SMEs to Expand Business Overseas◆ Reinforcing Support for SMEs
The support network for SMEs’ overseas businessdevelopment was launched in FY2011 with 11 regionalbanks, aiming to widely spread and promote the use of NEXI’s
insurance. As of April 2019, the network has grown nationwide
consisting of 47 prefectures, with 115 partner ﬁnancial institutions
including regional banks; shinkin banks; and agricultural, forestry,
and ﬁshery (AFF) industry–related organizations. In cooperation
with the partner ﬁnancial institutions, NEXI does not only conductpromotion activities for its insurance products targeting SMEs,
but also provides individual consultations by visiting companies
that consider the use of insurance. These activities have brought
positive results that an increasing number of companies aremaking use of NEXI’s insurance, introduced by partner ﬁnancial
institutions.
There is also an annual increase in the number of transactionsof the Export Credit Insurance for SMEs and AFF Sector, an
insurance product for SMEs and AFF-related organizations. In
FY 2018, the volume rose by more than 20 percent from theprevious year, exceeding 2,000, while the value increased byover 10 percent, reaching nearly JPY 10 billion.
Through the network, NEXI will continue to work for SMEs byimproving insurance products and services as well as by actively
promoting business expansion overseas.

100
92.9
90

Underwritten amount ( left axis, JPY 10 million )80

Underwritten transactions ( right axis, transactions)

96.4

98.1
2,400

84.5
1,933

◆ Promoting Trade and Investment
Insurance
As one of the organizations supporting the Consortium for
New Export Nation that JETRO serves as the secretariat for,NEXI supports the overseas business expansion of SMEs in linewith policies of the Japanese government.
This activity is also supported by the Japan International
Cooperation Agency ( JICA ) ; the Organization for Small andMedium Enterprises and Regional Innovation, JAPAN; andthe Japan Finance Corporation. NEXI gives presentations andsets up a booth at business seminars and events held by the
supporting institutions.
NEXI also participates in the following two government-led
initiatives. One is the seminar held by the Regional Bureausof Economy, Trade and Industry, aiming to publicize policies
that support overseas business expansion and to provide freeconsultation to the attendees. The other is the Global Farmers/
Fishermen/Foresters/Food Manufacturers Project (GFP) held by
the Regional Agricultural Administration Ofﬁces.
Through these activities, NEXI continues to promote the tradeand investment insurance.

2,500

2,000

1,758
70
1,486

60

1,500

50
43.1
900

40

20
10
0

1,000

666

30

433
26.4
355 289 285
255 209 260
12.7
156
6.4 6.2 5.6
4.8 3.8 4.4
3.82005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
(FY)

( Actual Export Credit Insurance for SMEs and AFF Sector )500

0( Seminar to publicize policies that support overseas business expansion,
held in Fukuoka )Furthermore, NEXI updated its website in March 2019,
responding to the voice of new insurance users saying that it
was difﬁcult to understand.

( Front page )26

Annual Report FY2018

◆ Guidelines on Environmental andSocial Considerations
Central &South
America
5.9%

Oceania
3.9%
Africa11.8%

Europe/NIS
Middle 7.8%
East
5.9%

Asia
64.7%

NEXI Activities＊Turkey is included in Middle East. Russia and Central Asia are included inEurope/NIS. Mexico is included in Central & South America.

FY2018 Screening by Category

Insurance Products

In order to carry out the social responsibilities related toenvironmental and social issues, NEXI ensures that appropriate
consideration is given to the environment and society by thesponsors of projects supported through NEXI’s insurance, in
accordance with the “Guidelines on Environmental and Social
Considerations in Trade Insurance” and the supplementary“Guidelines for Information Disclosure Considerations for Nuclear
Sector Projects in Trade Insurance.”
In FY2018, NEXI conducted screenings for 51 projects andmade assessments including, where appropriate, site visits on
the projects. In the assessments, projects are classified into
three categories (A, B, or C, listed in order of magnitude of theenvironmental impact) based on their potential environmental
impact in accordance with Screening Forms submitted byapplicants for NEXI insurance. The assessments are made basedon the results of the classiﬁcation. For example, as a rule, site
visits were conducted for category A projects, which accounted
for about 25% of total projects in FY2018.
Also, Objection Filing Procedures were introduced to ensurecompliance with NEXI’s Guidelines, which involve the assignmentof an examiner, independent of the section in charge of
insurance underwriting. NEXI will continue to make appropriate
assessments in the future.

FY2018 Screening by Region

NEXI Review of
Performance

In Pursuit of Sustainable Society

Category A
25.5%
Category C
64.7%

Category B
9.8%＊Categorized in order of impact on environment, A, B, and C.

FY2018 Financial Results

In May 2019, NEXI has expressed its support for therecommendations of the Task Force on Climate-related Financial
Disclosures ( TCFD ), which was established by the Financial
Stability Board ( FSB ) , and joined the TCFD consortium, a
discussion platform set up for promoting approaches for climaterelated ﬁnancial disclosures based on the recommendation.

About NEXI and
Organizational Operation◆ NEXI Supports Recommendationsof TCFD( Inspection of wetland )Annual Report FY201827

NEXI Activities

International Cooperation
In order to quickly and precisely respond to the diverse business needsof globalizing Japanese companies, NEXI has established international
cooperative networks with related institutions abroad.

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

EuropeOne-Stop-Shop Reinsurance Agreements
Italy
Netherlands
Belgium
Germany
Austria
Finland
Spain
Switzerland
FranceCzech RepublicUK

Servizi Assicurativi Del Commercio Estero (SACE)
Atradius N.V. (ATRADIUS)
Credendo – Export Credit Agency
Euler Hermes Deutschland AG (EULER-HERMES)
Oesterreichische Kontrollbank Aktiengesellschaft (OeKB)
Finnvera Plc. (FINNVERA)
Compañía Española de Seguros de Crédito a la Exportación (CESCE)
Swiss Export Risk Insurance (SERV)
Banque Publique d'Investissement (BPifrance)
Export Guarantee and Insurance Corporation (EGAP)UK Export Finance (UKEF)

2002
2002
2002
2003
2003
2004
2005
2007
2016
2017
2017

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

2016

Cooperative Agreements

Japanese
Company

To provide reinsurance
for the portion of exportby a Japanese company

Foreign
ECA

To provide export
credit insurance
for the entire
export contract

FranceExportUK

DREE
Banque Publique d'Investissement (BPifrance)
UK Export Finance (UKEF)

1995
2016
1995

Consortium Contract
Export Contract

Third
Country
Buyer

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

Reinsurance Contract

Foreign
ECA

AfricaExport Credit Insurance

Cooperative Agreements
South Africa

Japanese-affiliatedCompany

Export Credit Insurance Corporation (ECIC SA)

2005

Buyer
Export, etc.

Middle East
Cooperative Agreements(3) Reinsurance Agreements with Europeanand U.S. Private-sector Insurers

IsraelAbu Dhabi
Iraq

In response to the economic crisis in Europe and other issues, NEXI
started to provide underwriting capacity through short-term reinsurance
agreements with European and the U.S. private-sector insurers.

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

28

Annual Report FY2018

Israel Export Insurance Corp. Ltd. (ASHRA)
1997
Mubadala Development Company PJSC (MDC)2008
Ministry of Finance of Iraq /Trade Bank of Iraq (TBI)
2011
Ministry of Economic Affairs and Finance of the Islamic Republic of Iran 2016
Export Credit Bank of Turkey (TURK EXIMBANK)
2017

Germany

Austria
Italy
FinlandNetherlands
Belgium
Spain
Uzbekistan

One-Stop-Shop Reinsurance Agreements
1996
2011
1996
1996
1996
1996
1997
2000
2007
2009
2009
2009
2013
2015
2015
2016
2019

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

2004
2018

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

Cooperative Agreements
U.S.
CanadaU.S.

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

1991
1997
2009
2017

NEXI Activities

UkraineRussiaBelarus
RussiaTurkmenistan
Czech Republic
Kazakhstan
Georgia

Euler Hermes Deutschland AG (EULER-HERMES) /C&L
KfW Bankengruppe (KfW)
Oesterreichische Kontrollbank Aktiengesellschaft (OeKB)
Servizi Assicurativi Del Commercio Estero (SACE)FINNVERA PLC (Finnvera)
Atradius N.V. (ATRADIUS)
Credendo – Export Credit Agency
Compañía Española de Seguros de Crédito a la Exportación (CESCE)
Uzbekinvest National Export Import Insurance Company(UZBEKINVEST)
The State Export-Import Bank of Ukraine (UKREXIMBANK)Bank for Development and Foreign Economic Affairs (VEB)
Belarusbank
Russian Agency for Export Credit and Investment Insurance (EXIAR)The State Bank of Foreign Economic Affairs of Turkmenistan (TFEB)
Export Guarantee and Insurance Corporation (EGAP)
KazakhExport
Ministry of Economy and Sustainable Development of Georgia

NEXI Review of
Performance

North America

South America
Cooperative Agreements
BrazilCompanhia Valedo Rio Doce (VALE)
Petroleo Brasileiro S.A. (PETROBRAS)
Banco Nacional de Desenvolvimento Economico e Social (BNDES)
Brazilian Guarantees and Fund Managements Agency (ABGF)

2008
2008
2009
2017

Insurance Products

One-Stop-Shop Reinsurance Agreements
Short-term Reinsurance Agreements

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

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

Cooperative Agreements
2005
2011

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

2004
2006
2009
2009
2010
2012

Reinsurance Agreements with European and
U.S. Private-sector Insurers

Indonesia
China
India
Australia

Korea Trade Insurance Corporation (KSURE)ECICS Limited (ECICS)
Taipei Export-Import Bank of China (TEBC)
Asuransi Ekspor Indonesia (ASEI)PETROVIETNAM
Ministry of Finance of Vietnam
PT Pertamina (Persero)
China Export and Credit Insurance Corporation (SINOSURE)
Export Credit Guarantee Corporation of India (ECGC)
Department of Foreign Affairs and Trade (DFAT) /Export Finance and Insurance Corporation (EFIC)

1994
1997
2005
2008
2010
2014
2015
2018
2018

FY2018 Financial Results

Singapore
Malaysia
Indonesia
ThailandTaiwanHong Kong

Korea
Singapore
TaiwanIndonesia
Vietnam

About NEXI and
Organizational Operation

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

2018

International Organizations
Cooperative Agreements

Euler Hermes Deutschland AG (private sector)
COFACE (private sector)
American International Group, Inc. (AIG)
Tokio Marine HCC (HCC)
Mitsui Sumitomo Insurance Company (Europe) / MS Amlin

2013
2014
2015
2016
2019

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

1997
1997
2008
2018
2018

Annual Report FY201829

NEXI Activities

Underwritten Projects
Power

Indonesia / Jawa 1 LNG to Power ProjectIn the West Jawa Province of the Republic of Indonesia, a projectis underway to construct and operate both a gas-ﬁred power plant
and a ﬂoating storage regasiﬁcation unit (FSRU). Of the co-ﬁnancingof USD 1,312 million for this project, NEXI has provided insurance
for a ﬁnancing portion of USD 403 million provided by Mizuho Bank,
Ltd., MUFG Bank, Ltd., Oversea-Chinese Banking Corporation Ltd.,
Crédit Agricole Corporate and Investment Bank, Tokyo Branch andSociété Générale, Tokyo Branch. NEXI also insures a guarantee
provided by Sojitz Corporation (Sojitz), for the equity bridge loan
from private ﬁnancial institutions to each project company to cover
the costs associated with construction of the plant. This is the ﬁrst
time for NEXI to provide insurance for a liqueﬁed natural gas (LNG) topower project, an integrated business that includes power generation
business and LNG-related operations.
The project has been rolled out by two companies: 1 ) PT Jawa
Satu Power sponsored by investors including Marubeni Corporation,
Sojitz and PT Pertamina (Persero), and 2 ) PT Jawa Satu Regas
sponsored by those such as Mitsui O.S.K. Lines, Ltd. and thepreviously mentioned three companies, to commence operation in
2021. A 1,760 MW gas-ﬁred power plant and a 170,000 m³ FSRU
will be constructed, aiming to sell electricity generated by the plant
operation to the country’s national electricity power company PT
PLN (Persero) for a period of over 25 years.
The Indonesian government is promoting a 35 GW power plantdevelopment program in order to meet the increasing domestic
power demand in line with its economic growth. NEXI’s support forthe project is expected to help Japanese companies expanding

their business in Indonesia and strengthen their international
competitiveness in the environmental-friendly high-efﬁciency power
generation business, while contributing to the development ofIndonesian society and economy.
The insurance underwriting for the LNG storage and regasiﬁcation
project, where Japanese firms get involved is aligning with theJapanese government’s policy of supporting further utilization of LNG
in Asia.
This project is also positioned as U.S.-Japan Infrastructure
Cooperative Activities promoted by both governments because
it uses gas turbines and other equipment produced by a U.S.
manufacturer General Electric Company.
Date of signing the loan insurance contract: October 2018
Date of signing the loan insurance contract for guarantee
obligation: December 2018

( Rendering image of the plant with FSRU, provided by Marubeni Corporation )Turkmenistan / Natural Gas-fired Power Plant Construction
Project for State Power Corporation
Japan Bank for International Cooperation (JBIC), Sumitomo
Mitsui Banking Corporation, and ING Bank N.V., Tokyo Branch haveprovided ﬁnancing for a project to construct a new 400 MW natural
gas-ﬁred power plant in the Lebap Province of Turkmenistan, which
has been promoted by Turkmenenergo, the State power corporation.
Of the ﬁnancing, NEXI has provided insurance for a portion of JPY
12 billion provided by private financial institutions. This is the firstproject approved under the memorandum of understanding signed
between NEXI and the State Bank for Foreign Economic Affairs of
Turkmenistan, the borrower for this project in October 2015, which is
aimed at facilitating trade and investment activities between the twocountries.
Sumitomo Corporation takes a role of an EPC contractor inthis project and will supply power plant mainly composed of threesets of gas turbine generators with total capacity of approximately
400MW, manufactured by Mitsubishi Hitachi Power Systems, Ltd.
The plant will be constructed mainly to export generated electricity
to its neighboring country, the Islamic Republic of Afghanistan, andis expected to contribute to Afghanistan’s social/economic stability

30

Annual Report FY2018

and development. For Turkmenistan endowed with rich natural
gas reserves, this project has important implications in terms ofpromoting utilization of the domestic resources. It is anticipatedthat NEXI’s assistance for the project will contribute to Japanesecompanies’ expanding their business in the power infrastructure
field in Central Asia, as well as increasing their international
competitiveness.
Date of signing the insurance contract: July 2018

( Image provided by Sumitomo Corporation )in Sharjah. This insurance underwriting has been realized as aconsequence of a detailed examination of the projects, which was
conducted in accordance with NEXI’s sub-sovereign risk underwriting
policy released in April 2016 as part of its efforts to achieve“Partnerships for Quality Infrastructure” announced by JapanesePrime Minister Shinzo Abe in May 2015.
It is hoped that NEXI’s support for the projects will help Japanesecompanies to broaden their opportunities in the electric power
infrastructure business in the Middle East while further strengthening
their international competitiveness.

NEXI Activities

Of the seven emirates that make up the United Arab Emirates,
the Emirate of Sharjah is the third-largest in terms of populationand economy, following Abu Dhabi and Dubai. The city of Sharjah
is adjacent to that of Dubai, and the distance between both city
centers is just about 15 km, forming a wide range of connectedurban area that serves as a commuter town for those working in
Dubai. Sharjah will face further increasing power demand because
the country's population and economy are expected to continue togrow even after EXPO 2020 DUBAI.
NEXI has provided loan insurances for the following two power
generation projects aimed at increasing power generating capacity

NEXI Review of
Performance

Emirate of Sharjah / Highly-Efficient Natural Gas-Fired Power
Plant Projects − First loan insurance underwriting for Emirate of Sharjah −◆ Al Layyah Gas-Fired Combined-Cycle Power Plant ProjectThis is a project in which Sharjah Electricity and Water Authority( SEWA ) will construct a 1,026.3 MW gas-fired combined-cycle( Photo provided by Mitsubishi Hitachi Power Systems, Ltd. )◆ Hamriyah Gas-Fired Combined-Cycle Power Plant Project
Sharjah Hamriyah Independent Power Company PVJSC(investment ratio: Sumitomo Corporation: 35%, Shikoku ElectricPower Company, Inc.: 15%, GE Energy Financial Service ( GEEFS): 25%, and Sharjah Asset Management: 25%) has decided toDate of signing the insurance contract: April 2019

FY2018 Financial Results

undertake a project to construct a 1,800 MW gas-ﬁred combinedcycle power plant in Hamriyah, Sharjah, and sell electricity generated
by the plant operation to SEWA for a period of 23.5 years. This will
be Sharjah’s ﬁrst independent power producer (IPP) project.
Funds for this project were provided through co-ﬁnancing by JBIC,
Sumitomo Mitsui Banking Corporation, Sumitomo Mitsui Trust Bank,
Ltd., The Norinchukin Bank, Standard Chartered Bank, Japan Head
Office and Societe Generale, Tokyo Branch. Of the co-financing,
NEXI insures a financing portion of USD 516 million provided byprivate ﬁnancial institutions.
Because GE EFS, a subsidiary of U.S.-based General Electric, hasinvested in the construction, and the project uses highly-efﬁcient gas
turbines and other equipment manufactured by GE, the project isalso positioned as a U.S.-Japan Infrastructure Cooperative Activities
under the U.S.-Japan Economic Dialogue being promoted by bothgovernments.

About NEXI and
Organizational Operation

EPC contractors, forming a business consortium. MHPS will provide
core equipment including highly efﬁcient gas turbines, steam turbine,
generators, and heat recovery steam generators.
Funds to construct the plant and purchase equipment were
provided through co-financing by the Japan Bank for International
Cooperation (JBIC), Societe Generale, Tokyo Branch, ING Bank
N.V. and Standard Chartered Bank Japan Head Ofﬁce. Of the coﬁnancing, NEXI has provided loan insurance for a ﬁnancing portion of
USD 241 million provided by private ﬁnancial institutions.
MHPS is actively working to develop highly efﬁcient clean productsthat can be used in various energy situations around the world,
and this project is in line with the purpose of “Infrastructure Export

Date of signing the insurance contract: April 2019

Insurance Products

power plant in Layyah, Sharjah. Mitsubishi Hitachi Power Systems,
Ltd. (MHPS) and Elsewedy Power S.A.E. have joined the project asStrategy” by the Japanese government.

( Photo of the planned development site, provided by Sumitomo Corporation )Annual Report FY201831

NEXI Activities

Underwritten Projects
Oil & Gas

Ghana / Investment in FPSO Owing and Chartering Business
NEXI has provided Overseas Investment Insurance for theinvestment by four Japanese ﬁrms; Sumitomo Corporation, Kawasaki
Kisen Kaisha, Ltd., JGC Corporation and Development Bank ofJapan Inc. in a charter business of ﬂoating production storage andofﬂoading (FPSO) vessel in the Republic of Ghana.
The four companies have acquired a 26% stake in Yinson
Production (West Africa) Pte. Ltd. (YPWAPL), which owns a FPSO
operated by Yinson Holdings Berhad, a Malaysia-based marine
service provider. Having concluded a 15-year long-term FPSO
chartering agreement with Eni Ghana Exploration and Production
ltd., an afﬁliate of the major Italian oil company Eni SPA, YPWAPL
started its initial oil production in May 2017, at Offshore Cape Three
Points block, located approximately 60 kilometers off the coast of
Ghana.
This is the ﬁrst time for the four companies to invest into a FPSO
owing and chartering project. By acquiring knowledge and expertisethrough the project, further expansion of their overseas businesses
can be expected.

Date of signing the insurance contract: June 2018

( Photo of the FPSO, provided by Yinson Holdings Berhad )Bangladesh / Investment in LNG Receiving Terminal Project
NEXI has provided Overseas Investment Insurance to support
Mitsubishi Corporation (Mitsubishi)’s investment in a liqueﬁed naturalgas ( LNG ) receiving terminal project, which employs a floatingstorage and regasification unit (FSRU), in the People’s Republic ofBangladesh. The insurance covers risks that relate to political force
majeure events in Bangladesh and project contract violations. Thisis the ﬁrst time for us to offer insurance for a LNG receiving terminal
project.
Summit LNG Terminal Co. (Pvt) Limited (SLNG) has installed a
FSRU 6 km off the coast of the island of Moheshkhali in the Cox
Bazar District of Chittagong Division in Bangladesh, where thecompany receives LNG procured by Petrobangla, the national oil
and energy company, and provides regasiﬁcation service for a periodof 15 years. Mitsubishi has acquired a 25% interest in SLNG from
Summit Group, one of the largest conglomerates in Bangladesh.
This is the first LNG receiving terminal project utilizing FSRU in
Bangladesh in which a Japanese company has been involved.
Construction work of the terminal commenced at the end of 2017,and commercial operations started in April 2019.
Bangladesh, with its expanding population and economic growthrate of more than 6% per annum, is facing a sharp increase inelectricity demand. While electricity generated from natural gas
covers approximately 60% of total electricity demand in the country,
domestic natural gas production is starting to decline. Therefore,
Bangladesh is promoting LNG imports as part of its national energy
policy. Because a LNG receiving terminal utilizing FSRU can beconstructed at lower cost and within a shorter period compared to32

Annual Report FY2018

a conventional onshore receiving terminal, the project is expected toserve as an effective solution to expand LNG receiving capacity inemerging countries.
Having operated its LNG business globally for many years,
Mitsubishi is in recent years engaged in a stable supply of LNG＊,
which has a low environmental impact, and development of power/
energy infrastructure businesses mainly in Asia where there ismounting energy demand. In Bangladesh, Mitsubishi is considering
working with Summit Group for LNG supply and power generation
using LNG. By supporting this project with our insurance, we hopeto promote Japanese companies’ overseas LNG related businesses.
＊Natural gas emits less carbon dioxide ( CO 2) under combustion, andconversion from coal to natural gas has been accelerating as energy source.

Date of signing the insurance contract: October 2018

( Photo provided by Mitsubishi Corporation )business opportunities overseas and increase their international
competitiveness.
Date of signing the insurance contract: September 2018

NEXI Activities( Photo of the completed FPSO currently operating off the coast of
Brazil, provided by MODEC, Inc. )Insurance Products

MODEC, Inc. (MODEC), Mitsui & Co., Ltd., Mitsui O.S.K. Lines,
Ltd., Marubeni Corporation and Mitsui E&S Holdings Co., Ltd.
have invested in Libra MV31 B.V. (MV31), a company establishedby MODEC, to jointly proceed with a long-term charter businessof a floating production, storage and offloading system (FPSO) for
use in an ultra-deepwater offshore oil ﬁeld located in the Federative
Republic of Brazil.
Among the amount of USD 995 million raised by MV31 throughproject financing, NEXI insures a financing portion of USD 249
million provided by MUFG Bank, Ltd., Sumitomo Mitsui Banking
Corporation, Mizuho Bank, Ltd., ING Bank N.V., Tokyo Branch andSociété Générale, Tokyo Branch.
The FPSO will be deployed at the Mero in the giant pre-salt region,
situated approximately 5,000 meters beneath the seabed, some 180
kilometers off the coast of Rio de Janeiro, Brazil at a water depth
approximately 2,100 meters.
The Mero ﬁeld has been developped mainly by Petróleo Brasileiro
S.A., the Brazilian national oil company, and the FPSO will bechartered for 22 years starting in 2021, contributing to Brazil’s oil
production.
In the project fully owned by the above mentioned ﬁve Japanesecompanies with the purpose of operating the infrastructurebusiness for marine resource development, NEXI’s assistancewith the insurance will help Japanese companies to expand their

NEXI Review of
Performance

Brazil / FPSO Charter Project for Use in Mero Oil Field

Infrastructure

Oman / Sharqiyah Seawater Desalination ProjectThis project is well aligned with a Japanese government’s policy ofstrengthening its support for the water business overseas conductedby Japanese companies, since the project has been promoted by
JGC, from the business planning to actual operations of a seawater
desalination plant. Our support for this project is expected to leadto further overseas expansion of Japanese companies in the waterbusiness.

About NEXI and
Organizational Operation

Date of signing the insurance contract: July 2018

FY2018 Financial Results

JGC Corporation ( JGC ) , United Infrastructure Development
Company LLC and Doosan Heavy Industries & Construction Co.,
Ltd. have decided to proceed with a project to construct a seawater
desalination plant in Sharqiyah, the Sultanate of Oman, and to selldesalinated water over a period of 20 years.
NEXI insures the co-ﬁnancing of USD 114 million for the project,which was provided by Japanese three ﬁnancial institutions: MUFG
Bank, Ltd., Sumitomo Mitsui Trust Bank, Ltd. and Shinsei Bank,
Limited.
In this project, Al Asilah Desalination Company SAOC, a company
jointly established by the above mentioned three companies will sell
approximately 80,000 m³ per day of desalinated water to the Oman
Power and Water Procurement Company SAOC who is responsible
for the procurement / sales of electricity and water in the country.
In Oman, demand for desalinated water is expected to continue toincrease because of the country’s growing population and economy,
and securing water for daily life has become an urgent issue to besolved. This project will contribute to a stable supply of desalinatedwater in the country.

( Photo provided by JGC Corporation )Annual Report FY2018

33

NEXI Activities

Underwritten Projects
Infrastructure

Angola / Namibe Port Container Terminal Expansion Project andSacomar Port Rehabilitation Project– NEXI Provides Loan Insurance through Export Credit Line for the Ministry of Finance, Angola –Toyota Tsusho Corporation and other Japanese companies havereceived an order from the Ministry of Transport, the Republic ofAngola for the Namibe Port Comprehensive Development Project,which includes expansion of the Namibe port, the third largest
commercial port in Angola, and rehabilitation of the Sacomar port.
NEXI has provided loan insurance with the export credit line
established between the Japan Bank for International Cooperation(JBIC) and the Ministry of Finance of Angola. The project is cofinanced by JBIC, Sumitomo Mitsui Banking Corporation andthe Hongkong and Shanghai Banking Corporation Ltd., Tokyo
Branch. Of the co-ﬁnancing, the loan insurance covers a ﬁnancing
portion provided by private financial institutions for the Namibe
Port Container Terminal Expansion Project and the Sacomar Port
Rehabilitation Project.
As for the Namibe port, improving its logistics and increasing
exports of iron ore have been the challenges to be solved. The
ﬁnancing for the project, which will be used to expand the Namibe
Port container terminal and to rehabilitate the port of Sacomar, an
export port of iron ore is expected to largely contribute to logistics
improvement in Angola while allowing further acquisition of foreign
currencies by increased iron ore exports.
At TICAD VI held in Nairobi in August 2016, participants expressedhigh expectations for Japan’s quality infrastructure investments in
Africa, such as investment in port development. This project therefore

has significant implication that the Japanese public and private
sectors are jointly working on the port development in Angola. The
project is expected to contribute to the strengthening the bilateralrelationship between Japan and Angola, and to be a foundation forJapanese companies to obtain new business opportunities in Africa.
Date of signing the commitment to enter into the insurance
contract: March 2019

( Photo of the planned development site, provided by Toyota Tsusho
Corporation )Aircraft and Ships

Colombia / Support for Boeing 787 Aircraft Export to Avianca Airlines
NEXI has provided reinsurance for the Boeing Company’s exportof a Rolls-Royce-powered Boeing 787 to Avianca Airlines in the
Republic of Colombia under the reinsurance agreement signed
between NEXI and UK Export Finance (UKEF), the export credit
agency of the UK.
UKEF provided export credit for the transaction to support theexport of the Trent 1000 engines manufactured by UK-based RollsRoyce Holding plc, which are installed on the Boeing aircraft. NEXI
works with UKEF by sharing risk through reinsurance.
Japanese companies participate in the joint development of theaircraft as program partners, and have become widely involved in the
production of various parts including primarily wings, fuselages, tires
and cabins.
Supporting the export of Boeing 787 aircraft in cooperation
with UKEF is meaningful because we can support an international
collaboration project associated with the development andmanufacturing of aircraft by providing export credit. We will continue
to cooperate with external organizations through reinsurance

34

Annual Report FY2018

underwriting in order to assist Japanese companies expanding theirbusiness overseas.
Date of signing the reinsurance contract: December 2018

( Photo provided by The Boeing Company )Date of signing the insurance contract: February 2019

NEXI Activities

Oshima Shipbuilding Co., Ltd. has decided to export a steel carrier
to the Republic of Panama-based MacLin Spring Maritime S.A., inwhich Taiwan’s Ta Tong Marine (TTM) Group has a stake.
Funds for the purchase of the vessel is co-financed by Citibank
N.A., Tokyo Branch and the Japan Bank for International Cooperation(JBIC). Of the funds, NEXI insures a financing portion provided by
Citibank N.A., Tokyo Branch.
The TTM Group, which primarily owns and operates bulk carriers,
plans to hire out the use of the purchased vessel to Japanese
shipping companies. This is the second loan insurance for us toprovide for the TTM Group, following the ﬁrst one in January 2018.
It is expected that NEXI’s support for the project will contribute todevelop ship exports and the marine transportation businesses ofJapanese companies.

NEXI Review of
Performance

Taiwan / Ship Export to Ta Tong Marine Group( Reference image )Machinery and Equipment

To actively support this type of export with deferred payment, we
restarted to offer Export Credit Insurance that extends two or more
years on April 1, 2017. Since announcing the restart, this is the third
Export Credit Insurance for us to provide for export with a long-term
deffered payment. NEXI’s
support for this export is
expected to further promote
Japanese companies’
exports.
Date of signing theinsurance contract:
March 2018
( Photo provided by Komatsu Ltd. )Mexico / Export of Hot Strip Mill Complex to ArcelorMittal Mexico Project

FY2018 Financial Results

NEXI provided reinsurance for a project to export hot strip
mill complex to ArcelorMittal Mexico, based on the reinsurance
agreement concluded with Oesterreichische Kontrollbank
Aktiengesellschaft (OeKB) – Austria’s export credit agency (ECA).
The project was awarded to Austrian subsidiary of Primetals
Technologies acting as a prime contractor, with the company’s
German and Japanese subsidiaries as well as an Italian manufacturer
involved as sub-contractors. Four ECAs: OeKB ( Austria ) , Euler
Hermes (Germany), SACE (Italy) and NEXI (Japan) jointly supported
the export by Primetals Technologies.
NEXI continues to support Japanese companies’ international
business by promoting cooperation with third countries throughreinsurance.

About NEXI and
Organizational Operation

NEXI has provided Middle-long term export credit insurance tosupport export of mining equipment manufactured by Komatsu Ltd.
to the Republic of Cote d'Ivoire. The export of 21 mining equipment
to the Cote d'Ivoire subsidiary of Endeavour Mining Corporation,a gold mining company will be made under deferred payment that
extends for ﬁve years. This is the ﬁrst time that NEXI has provided
insurance for export with deferred payment of more than two years
to a Sub-Saharan African country.
Deferred payment serves as ﬁnancing provided by the exporter tothe purchaser. Especially in small-scale exports, it has become an
important ﬁnancing method for overseas importers who ﬁnd it more
difﬁcult to obtain bank loans due to the administrative burden andother reasons.

Insurance Products

Cote d'Ivoire / Export of Komatsu Mining Equipment

Primetals Technologies / primetals.com( Photo provided by Primetals Technologies )Date of singing the reinsurance contract: March 2019

Annual Report FY201835

NEXI Activities

Underwritten Projects( SMEs exports )Apple Exports
Nihon Agri, Inc.(Nihon Agri), which exports and sells Japanese
agricultural products, uses Export Credit Insurance for SMEs andAFF sector for its apple exports to Hong Kong, Taiwan, and Kingdomof Thailand.
Founded as a startup in 2016, Nihon Agri has expanded its
business with the mission of “surprising the world with Japanese
agriculture.”
Japanese agricultural products tend to be sold only in Japan, but
Nihon Agri is aiming to transform the structure of the agriculturalindustry so that farmers generate profit the more they produce byexporting Japanese agricultural goods at prices that reflect theirhigh quality. While it mainly exports apples from Aomori Prefecture,
the company also ships popular fresh fruits such as Shine Muscat
grapes and peaches to Asian countries, thereby raising the presenceof Japanese agricultural products overseas.
In this case, Nihon Agri made use of export credit insurance toreduce risks related to collecting payments when the value of its
exports dramatically increased. The company will continue to actively
expand sales in overseas markets using export credit insurance.
Annual export amount to be covered by the insurance: About
JPY 150 million
Date of signing the insurance contract: October 2018
( Photos provided by Nihon Agri, Inc. )Kinmemai Rice Exports
Formerly Toyo Rice Cleaning Machine Co., Ltd., Toyo Rice
Corporation (Toyo Rice) was founded in 1961 and has head ofﬁces
in both Wakayama Prefecture and Tokyo. The company employs
Export Credit Insurance for SMEs and AFF sector for its exports of
the rice Kinmemai Better White and Kinmemai Better Brown to Hong
Kong to mitigate risks related to collecting payment.
Kinmemai Better White and Kinmemai Better Brown, both ofwhich do not require rinsing before cooking, not only retain thehigh nutritional value of brown rice thanks to the company’s originalpolishing technology, but are also delicious. The value of Kinmemai
Better White and Kinmemai Better Brown has been recognizedboth in Japan and overseas, particularly in Asia, and both products
have made major contributions to raising the value of Japanese ricethroughout the world.
In February 2019, Toyo Rice invited around 400 people, including
rice producers, milling companies, distributors, restaurant industry
players, and workers at medical and welfare facilities, involved in
the rinse-free BG (bran and grind) rice developed and sold by thecompany, to three venues to participate in lessons on sustainable
foods, which will come to be demanded from now on. In doing so, it
sets a Guinness world record.
Toyo Rice has traditionally exported products through indirect
trade via trading companies but launched direct exports for someareas in order to more aggressively expand overseas in response

to greater health awareness in foreign countries. At that time, thecompany used NEXI’s SMEs and AFF sector export credit insurance
to hedge risks of not being able to collect payments.
There is now growing interest in strengthening exports of Japaneserice, and Toyo Rice will expand exports by continuing to make use ofexport credit insurance and plans to reinforce Kinmemai Better Whiteand Kinmemai Better Brown’s position as Japan’s ﬂagship brands.
Date of signing the insurance contract: April 2018

( Photo provided by Toyo Rice Corporation )36

Annual Report FY2018

Export amount to be covered by the insurance: About JPY 3.60
millionDate of signing the insurance contract: December 2018

NEXI Activities( Photo provided by NASIO Co., Ltd. )Insurance Products

NASIO Co., Ltd. (NASIO), which has its headquarters in Hokkaido,
exports sweets to Socialist Republic of Vietnam and makes useof Export Credit Insurance for SMEs and AFF sector to alleviate
concerns about risks related to collecting deferred payments for its
exports.
With business locations not only in Hokkaido but throughout
Japan, NASIO sells its products to supermarkets and convenience
stores countrywide. The company has been selling sweets wholesale
for more than a century and painstakingly meets the ever-changing
needs of its customers. In recent years, it has focused its efforts onexports and is leveraging the know-how it has acquired handlingJapanese companies to actively promote exports of Japanese
sweets and other food products, mainly ones from Hokkaido, toPeople's Republic of China, Vietnam, Taiwan, and other Southeast
Asian countries.
Because NASIO was concerned about the credit risk of new
overseas customers, North Paciﬁc Bank＊ introduced the company
to export credit insurance. By using the insurance to hedge this risk,
the company was able to accept deferred payment as desired by thecustomers.
NASIO plans to continue making use of export credit insurancewith a view to actively conducting sales in overseas markets.

NEXI Review of
Performance

Sweets Exports＊North Pacific Bank: business tie-up with NEXI launched in February 2014.

Sake Exports
About NEXI and
Organizational Operation

When Niigata Prefecture-based Maboroshinosake Co., Ltd.
(Maboroshinosake) moved forward with new business involving a

FY2018 Financial Results

customer from Russian Federation, it was concerned about therisk related to deferred payment for goods. Having previously used
Export Credit Insurance for SMEs and AFF sector, the company
decided to use it again and concluded a contract to allay thoseconcerns.
Even among Niigata-produced sakes with a speciﬁc class name,which are not sold at stores in other prefectures, Maboroshinosake
specializes in sake given as gifts and has focused on ginjo-shu
and junmai-shu types of sake. In order to spread the appeal of
Niigata sake, which is mostly consumed locally because of its rarity,
throughout the world, the company is focusing on undertaking mailorder sales and producing locally brewed sake. The company has
also recently started to produce the Amule series of fruit liqueurs,
which was developed to make sake more palatable to women, whohave found it difﬁcult to drink traditional sake. Receiving high acclaim,
the product won the 2019 FOODEX Gourmet Beauty Award gold
medal.
Maboroshinosake plans to continue using export credit insurance
to sell this and other highly acclaimed products.

( Photo provided by Maboroshinosake Co., Ltd. )Export amount to be covered by the insurance: About JPY 1.20
millionDate of signing the insurance contract: September 2018

Annual Report FY201837

NEXI Activities

Underwritten Projects ( SMEs exports )Sake Exports
Introduced to Export Credit Insurance for SMEs and AFF sector
by THE NISHI-NIPPON CITY BANK, LTD.＊, Takamasamune Co.,
Ltd. (Takamasamune) used the insurance for its exports of sake to
People’s Republic of China.
When undertaking new business with a Chinese buyer,
Takamasamune was concerned about the risk of collecting payment
due to deferred payment for goods, but it used export credit
insurance that was fortuitously introduced by the bank.
Founded during the Tenpo Period (1830–1844), Takamasamune
handles “Katsutaka”, which is the official sake of the Fukuoka
Softbank HAWKS baseball team, “Bakkaikiwami”, genuine barleyshochu made from 100% Kyushu-grown wheat called “Harushizuku”,
and “Goryonsan”, which is sold with a system of weight-based salesof shochu poured directly from barrels and jugs to the customer’s
own bottle in stores.
Takamasamune is actively working to export its products andplans to further expand overseas using export credit insurance forexports with deferred payment.

Export amount to be covered by the insurance: About JPY 1.80
millionDate of signing the insurance contract: August 2018

＊THE NISHI-NIPPON CITY BANK: business tie-up with NEXI launched in
January 2013.
( Photo provided by Takamasamune Co., Ltd. )Sake Exports
Yamato Brewing, Inc. (Yamato Brewing) made use of Export Credit
Insurance for SMEs and AFF sector for its sake exports to Republicof Korea in order to reduce risks related to collecting payments forbusiness conducted with deferred payment for goods.
In this case, Yamato Brewing used the insurance through an
introduction from THE BANK OF SAGA LTD.＊
Located in the city of Saga in Saga Prefecture, the sake brewery
Yamato Brewing has roots in five long-established granaries andopened in 1975. Its main brand is Hizentoji.
Using subterranean water from the Sefuri Mountains pumped up
from a depth of 200 meters, Yamato Brewing offers various popular
products, including not only sake but also “Hishimusume”, whichis genuine and very rare shochu made from water chestnuts, andthe strawberry liqueur “Ichigo-no-osake Sagahonoka”, made from
Sagahonoka strawberries grown in Saga Prefecture.
The company worries about its judgment regarding the credit risk
posed by new overseas customers and makes effective use of credit

ratings that NEXI sets for overseas companies.
＊THE BANK OF SAGA: business tie-up with NEXI launched in February 2014.

Export amount to be covered by the insurance: About JPY 1.30
millionDate of signing the insurance contract: August 2018

( Photo provided by Yamato Brewing, Inc. )Surgical Instrument Exports
YASUI Co., Ltd. (YASUI) ﬁrst made use of Export Credit Insurance
for SMEs and AFF sector for exporting medical instruments to
Taiwan, through an introduction from The Miyazaki Bank, Ltd.＊With headquarters located in the town of Kadogawa in Miyazaki
Prefecture, YASUI has won high praise as evidenced by the38

Annual Report FY2018

company having been selected as one of the “Driving companies forthe regional future” selected by the Ministry of Economy, Trade andIndustry, and having won a Miyazaki SME Award and a 2018 GOOD
DESIGN AWARD.
YASUI expanded into the medical field using the technical skills

NEXI Review of
Performanceacquired from its injection molding business and developed its
original surgical retractor Koplight. Made from a resin that prevents
broken pieces from spreading, this cordless surgical tool has an LED
light to illuminate the area being used in.
YASUI plans to continue making use of export credit insurance
and further expand its overseas business.
＊The Miyazaki Bank: business tie-up with NEXI launched in February 2014.

Export amount to be covered by the insurance: About JPY 1.90
millionDate of signing the insurance contract: October 2018

NEXI Activities( Photo provided by YASUI Co., Ltd. )Medical Needle Exports
While actively working to expand its overseas business, Nihon
Chushashin Kogyo plans to continue to expand overseas making
use of export credit insurance.
Date of signing the insurance contract: February 2019

Abrasive Exports

About NEXI and
Organizational Operation( Photo provided by Nihon Chushashin Kogyo Co., Ltd. )FY2018 Financial Results

Matsumi Kenmazai Co., Ltd. ( Matsumi Kenmazai ) , located in
the city of Kyoto in Kyoto Prefecture, employs Trade Insurance forStanding Orders from Speciﬁc Buyers for its exports of abrasives to
Republic of Singapore.
Matsumi Kenmazai aims to use its experience acquired over many
years to provide a stable supply of top-quality abrasives, which
are indispensable for creating everything around us. Founded in
1970, the company will celebrate its 50th anniversary in 2020. As
an organization of uncompromising professionals, the company
continues to provide abrasives that meet the needs of theircustomers.
As a pillar of the manufacturing industry in not only Japan but
also overseas, particularly in Asia, Matsumi Kenmazai is expanding
its distribution outlets overseas in order to contribute to society andachieve further growth. At the same time, the company has come touse export credit insurance to reduce risks related to business withoverseas customers.

Insurance Products

Nihon Chushashin Kogyo Co., Ltd. (Nihon Chushashin Kogyo),a manufacturer and seller of medical instruments, decided to use
Export Credit Insurance for SMEs and AFF sector in response to acustomer’s request to change the payment method from letter ofcredit to deferred payment for exports of medical needles to India.
Nihon Chushashin Kogyo mainly produces needles ( specialty
cannulas ) for the medical industry. Since its establishment, thecompany has thoroughly adopted a direct sale style in order toquickly meet the demands of customers and has expanded its
distribution outlets to more than 150 companies in 34 countries.
Using the knowledge and know-how it has acquired over 60
years and having a lineup of more than 1,300 diverse products,
the company provides products of the highest quality to meet theincreasingly complex and diverse needs of customers.

( Photos provided by Matsumi Kenmazai Co., Ltd. )Date of signing the insurance contract: September 2018

Annual Report FY2018

39

NEXI Activities

Underwritten Projects ( SMEs exports )Wood Wool Exports
Toda Shoko inc. (Toda Shoko) employed Export Credit Insurance
for SMEs and AFF sector for its exports of wood wool to Socialist
Republic of Vietnam in order to reduce risks related to collecting
deferred payments for goods.
Wood wool, a product made by shaving wood into narrow ribbons(that are also known as “excelsior”), is mainly used as packing for
fruits and other fragile items.
Toda Shoko, which possesses the only excelsior plant in Japan,
handles a range of products including shoe keepers, pillow sheets,
and aroma pouches for dressers that benefit from the insectrepellant, anti-mold, relaxing and moisture-absorbent properties of
excelsior made from trees grown in Kochi Prefecture (pine, cedar,hinoki cypress, and camphor tree).
Introduced to export credit insurance by the Shikoku Bank, Ltd.＊,
one of its transacting banks, Toda Shoko proceeded to examine theinsurance as an effective method for reducing risks.
Toda Shoko plans to continue to aggressively expand sales inoverseas markets by making use of export credit insurance.
＊The Shikoku Bank: business tie-up with NEXI launched in February 2014.

Export amount to be covered by the insurance: About JPY 0.90
millionDate of signing the insurance contract: August 2018
( Photos provided by Toda Shoko inc. )Elevator Wire Rope Exports
Located in Taito Ward, Tokyo, CHUWA SANGYO CO., LTD.
(CHUWA SANGYO) made use of Export Credit Insurance for SMEs
and AFF sector and Export Credit Insurance (for a single business
contract) to reduce the risk of collecting payments for exports ofelevator wire rope to Malaysia following a request from a customer toswitch to deferred payments.
The company was established in 1940 in the former Manchuria
as a subsidiary of Hayama Sekiyu, the predecessor of the former
Showa Sekiyu, in order to conduct sales of various types of mineraloil. The name CHUWA written in Japanese incorporates one of theChinese characters used to write China and one of the charactersused to write Yamato, an ancient name for Japan, and represents
the hope for good relations between the two countries.
After that, as its industrial complex in Japan grew, CHUWASANGYO came to sell various products and provide related
maintenance services to customers both in Japan and overseas.
These products include numerous valves and piping for oil reﬁneries
and wire rope for elevators. This transaction involves elevator wirerope, one of the company’s main products, and the company
provides cutting-edge technical prowess acquired over the years,
maintenance, and other services that cater to market needs. The
products that the company exports are expected to be in highdemand not only in Japan but also People’s Republic of China and40

Annual Report FY2018

other countries throughout the world.
In order to meet the growing demand, particularly in China,
CHUWA SANGYO plans to expand overseas using NEXI export
credit insurance.
Annual export amount to be covered by the insurance: About
JPY 37 million
Date of signing the insurance contract: April 2018

( Photo provided by CHUWA SANGYO CO., LTD. )NEXI Review of
Performance

Coin Laundry Washing Machine Exports

NEXI Activities

Pressio Ltd. (Pressio) used Export Credit Insurance for SMEs andAFF sector to alleviate concerns about risks related to collecting
deferred payments from new customers when exporting coin laundry
washing machines to Republic of Singapore.
Ever since being founded in 1950, Pressio has worked for thenewspaper industry and been involved in production, sales, repairs,
and advising related to various industrial equipment, including
automatic newspaper ad collators, for newspaper shops. In recent
years, the company has grown beyond the newspaper industry
using the know-how it has acquired over many years and provides
products to other industries. The company has also actively
expanded overseas.
Pressio first made use of export credit insurance introduced byprofessional staff of the Consortium for New Export Nation (see page
26).
Pressio plans to maintain its aggressive expansion of sales inoverseas markets by making use of export credit insurance.

( Photo provided by Pressio Ltd. )Insurance Products

Export amount to be covered by the insurance: About JPY 6
millionDate of signing the insurance contract: October 2018

Floor Tile Exports

About NEXI and
Organizational Operation
FY2018 Financial Results

Shinko Kasei Co., Ltd. (Shinko Kasei) employed Export Credit
Insurance for SMEs and AFF sector for its exports of non-PVC tile
ﬂooring used in commercial and public facilities to the U.S. in order tolessen concerns about risks related to collecting deferred payments
for goods.
Since its founding in 1983, the company has pursued thepossibilities of plastics and produced plastic tile flooring, which
continues to evolve with the times. While giving consideration to theenvironment, the company produces and sells numerous products,
including PVC-based flooring tiles designed to look like wood orstone, oleﬁn composite panels that carry the eco mark as recycled
products, and oleﬁn packaging that possesses transparency, luster,and better shape retention with high-level hinge properties andflexibility. The company has won high praise both in Japan andoverseas.
In selling its environment-friendly non-PVC ﬂooring tiles on deferredpayment to a new customer, Shinko Kasei could smoothly conduct
the transaction thanks to the export credit insurance.
The company plans to continue to expand its sales in overseas
markets while making use of export credit insurance.

( Photo provided by Shinko Kasei Co., Ltd. )Annual export amount to be covered by the insurance: About
JPY 20 million
Date of signing the insurance contract: December 2018

Annual Report FY201841

NEXI Activities

Underwritten Projects ( SMEs exports )Screen Window Exports
Located in the city of Tokorozawa, Saitama Prefecture, SEIKI
SOGYO CO., LTD. ( SEIKI SOGYO ) made use of Export Credit
Insurance for SMEs and AFF sector to safeguard against payment
risks when it decided to partially adopt deferred payments for theexport of screen windows to Canada in an effort to develop new
customers.
SEIKI SOGYO is a member of the SEIKI Group, which supplies
products that support a comfortable living environment. The SEIKI
Group’s “SEIKI Screen Systems” are based on technology and knowhow the Group has acquired over the years and were developed andarranged to meet the needs of markets and customers throughout
the world. Customers demanding a lifestyle that values the naturalenvironment highly rate these screen windows as ideal products thatbalance ecological considerations and comfort.
While its sales throughout the world up to now have been basedon advance payment, SEIKI SOGYO indicated it would accept
deferred payment for some exports amidst its efforts to expand its
overseas sales channels and examined using export credit insurance.
The company thus began to make use of the insurance.
SEIKI SOGYO plans on continuing to move forward with efforts
to expand its overseas sales channels while ﬂexibly handling various
payment terms for exports by making use of export credit insurance.

Annual export amount to be covered by the insurance: About
JPY 3.90 million
Date of signing the insurance contract: January 2019

( Photo provided by SEIKI SOGYO CO., LTD. )Women’s Functional Innerwear and Socks Exports
Advancing Inc. (Advancing) used Export Credit Insurance for SMEs
and AFF sector for its exports of women’s functional innerwear andfunctional socks to Taiwan, through an introduction from Kansai Mirai
Bank, Limited.＊
With its head ofﬁce located in the city of Osaka, Advancing plansand develops various functional clothing, including innerwear, socks,
and leggings, with aesthetic functions, style, designs, and healthbeneﬁts, which women want.
The company would like to not only sell its products in Japan but
also export them and plans to expand sales of its products overseas
by continuing to utilize export credit insurance.
＊Kansai Urban Banking Corporation, the predecessor to Kansai Mirai Bank,
launched business tie-up with NEXI in February 2014.

Date of signing the insurance contract: March 2019

( Photo provided by Advancing Inc. )42Annual Report FY2018

Insurance Products
Trade and Investment Insurance― How It Works

44

Insurance Products to Support Your Business 45
Application Procedures for Trade andInvestment Insurance

52

TOPICS

56

Insurance Products

Trade and Investment Insurance – How It Works
Trade and investment insurance covers risks associated withinternational trade and other overseas transactions that cannot
be covered by private-sector insurance.
The purpose of trade and investment insurance is to support

and promote the overseas expansion of companies by mitigating
the risks associated with foreign trade and overseas investment.

Foreign Country
Insurance
contract

100% equity

Governmentof Japan

Export, investment,
financing, etc.

Japanese
Company

Foreign Company
Overseas Project

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

Political Risk＊

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

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

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

Event occurs

The following losses are covered:Pre-shipment risk

Losses incurred due tofailure to ship

Post-shipment risk

Overseas investment risk

Losses incurred due toLosses on investment assets

failure to collect receivables,
service fees, or loans

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

44

Annual Report FY2018

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

NEXI Review of
Performance

Export Credit Insurance

NEXI Activities

ExportExport Credit Insurance
Unable to export

××

Foreign
ImporterInsurance Products

Japanese
Exporter

Unable to collect receivables

Intermediary Trade

Unable to ship

×Japanese
Intermediary
Trader×

Unable to collect receivables

Foreign
Importer(Country B)

About NEXI and
Organizational Operation

Foreign
Manufacturer(Country A)

FY2018 Financial Results＊We offer two types of Export Credit Insurance: speciﬁc insurance provides coverage for a single business contract andenterprise comprehensive insurance provides coverage for all contracts of a company within the scope the policy.

◆ Insurance for License Export (Intellectual Property License Insurance)Intellectual Property License Insurance covers losses incurred
when Japanese companies that provide patents, know-how,or copyrights abroad are unable to collect payment of license

fees such as royalties due to i ) force majeure, including war, orii ) bankruptcy or delay in payment by the counterparty.

Annual Report FY2018

45

Insurance Products

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

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

The features of this insurance are as follows:＊The risks covered by this insurance are the same as those covered by Export
Credit Insurance.

Exporter sets limit on insurance claims: The limit on insurance
claims is set for each buyer based on their estimated value oftransactions for the year.

Scope of coverage provided by NEXI

Trade Insurance forStanding Orders
from Specific Buyers

Credit risk of exporter’sCountry B
Buyer ②

Country B subsidiary is not covered.
Buyer ③
(Subsidiary)
Country A
Buyer ①Country A
Buyer ②

Country C
Buyer(Not covered
due to buyer
category)(Not covered
due to country
category)

Country B
Buyer ④

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

Scope of coverage desired by exporter

Country B
Buyer ①

Comprehensive Export Insurance with Simplified Procedure◆ Insurance for companies that continually or repeatedly conduct business witha number of buyers
This insurance comprehensively covers all export/intermediary
trade contracts concluded by Japanese exporters that meetcertain conditions during the insurance contract period (1 year).
Exporters estimate the payment owed for shipped goods basedon the export contract and notify NEXI by the end of the monthafter shipping.
With this insurance, the exporter does not need to purchase apolicy for each export contract, and the procedures for changing
the terms and conditions of the contract are less likely to occur
because the notification is made after shipment. Therefore,
application procedures are simpler than for other types of
insurance.
＊The risks covered by this insurance are the same as those covered by Export
Credit Insurance.

Comprehensive Export
Insurance with
Simplified Procedure
County A
Buyer ①Country A
Buyer ②

County B
Buyer ③

Scope of coverage provided by NEXI

Japanese
Exporter

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

46

Annual Report FY2018

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

insurance claims to meet the needs of SME and AFF customers.
Furthermore, applicants for this insurance who also receive abank loan can simultaneously complete procedures to establish apledge on insurance claim rights, etc.

NEXI Activities

Export Credit Insurance
for SMEs and AFF Sector

NEXI Review of
Performance

Export Credit Insurance for SMEs and AFF Sector

ExportJapanese
SME or
AFF
Organization

Foreign
Buyer

×
Unable to collect receivables

Loan

Insurance Products

JapaneseBank
Create pledge

Export Bill Insurance
the insurance covers losses if the bills are not paid because ofi ) force majeure, such as war, revolution, prohibition of foreign
currency exchange, suspension of remittance and natural
disaster, or ii ) bankruptcy or default of a foreign importer.

Send bill

Export Bill Insurance

×
Unable to remit×
Present bill

FY2018 Financial Results

Japanese
Bank

Foreign
Collecting
Bank

About NEXI and
Organizational Operation

This insurance makes it easier for banks to purchasedocumentary bills by primarily covering losses incurred by banks
that purchase documentary bills drawn without an L/C if a buyer
fails to pay the bill when it comes due. For Japanese banks
that purchase documentary bills issued to recover export costs,

Unable to pay

Request negotiation of bill

Japanese
Exporter(Drawer)

Export contract

Foreign
Importer(Drawee)Annual Report FY2018

47

Insurance Products

Insurance Products to Support Your BusinessPrepayment Import InsuranceThis insurance covers losses incurred by Japanese importers
who pay for goods in advance in accordance with contract
terms but then cannot import the goods nor receive a refund
for the prepaid money due to i ) force majeure, such as war,

revolution, prohibition of foreign currency exchange, suspensionof remittance and natural disaster, or ii ) bankruptcy or default of
the counterparty, even after requesting a refund of the prepaid
money in line with the refund terms.

Buyer’s Credit Insurance◆ Insurance for loans, etc. such as for payment of export goods (Buyer’s Credit)
due to i ) force majeure, such as war, revolution, prohibition offoreign currency exchange, suspension of remittance and natural
disaster, or ii ) bankruptcy or default of the importer. The terms
and conditions for the loan agreements, etc., must comply withinternational rules. (See page 56.)

This insurance covers losses incurred by Japanese commercial
banks or ﬁnancial institutions that provide loans, etc., (including
bond purchases and surety obligations) to foreign importersthat purchase goods and services from Japanese exporters
if they are unable to receive repayment of the loans or bonds

Loan, etc.

Buyer’s Credit Insurance

Foreign
Importer
Export contract, etc.

JBIC＊
Japanese
Bank

Unable to repay

Japanese
Exporter×＊NEXI provides the insurance only to Japanese commercial banks that extend loans, etc., in cooperation with the Japan Bank for International Cooperation (JBIC).

Overseas Untied Loan Insurance◆ Insurance for loan or bond purchase for overseas business or projects
This insurance covers losses incurred by Japanese companies
and commercial banks* that provide a foreign government orcompany with business funds untied to exports from Japan foroverseas projects that contribute to economic development,or that purchase bonds issued by a foreign government orcompany for the purpose of financing, if they are unable tocollect the loan or the bonds are not redeemed due to i ) force
majeure, including war, revolution, prohibition of foreign currency
exchange, and suspension of remittance and natural disaster, orii ) bankruptcy or default of the borrower or the bond issuer.

Overseas United Loan
Insurance

Foreign
Governmentor Company
Unable to repay

Japanese
Companyor Bank＊
Loan/purchase of bond48

Annual Report FY2018

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

This insurance covers losses incurred by Japanese companies
or commercial banks that guarantee the borrowings, etc., ofoverseas subsidiaries, foreign governments, or companies(borrowers) if they are forced to fulfill that obligation because

×

Overseas United Loan
Insurance

NEXI Review of
Performance◆ Insurance for guarantee of obligation

Debt guaranteeBank

NEXI Activities

Loan, etc.

Unable to repay

ForeignCompany

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

Insurance Products

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

Japan

Overseas Resource Project Company

Underwrite

Energy andMineralResources

Off-taker
Production
Facility,
MiningConcession

Borrowing
Loan

JapaneseBank

Subordinated
Loan
Senior loan special clause

Shareholder’sEquityAbout NEXI and
Organizational OperationJapanor banks that provide foreign governments or companies withbusiness funds ( untied to exports from Japan ) for projects
which contribute to resource development if they are unable tocollect the loan due to i ) force majeure, such as war, revolution,prohibition of foreign currency exchange, suspension ofremittance and natural disaster, or ii ) bankruptcy and default of aborrower.

Proceeds from resource sales

Escrow Account at aFirst-Class Bankin Developed Countries

FY2018 Financial Results

Overseas Untied
Loan Insurance

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

An escrow account must be opened at a ﬁrst-class bank in a developed country.
Lower premium rates and higher coverage are provided compared to ordinary Overseas Untied Loan Insurance.
Annual Report FY2018

49

Insurance Products

Insurance Products to Support Your Business
Overseas Investment Insurance◆ Insurance for investment (equity investment, etc.)
This insurance covers losses incurred by Japanese companies
with a subsidiary or a joint venture in a foreign country if thesubsidiary or joint venture is forced to discontinue business due
to force majeure such as war, terrorism and natural disaster. The

insurance also covers losses incurred when Japanese companies
are unable to remit dividends to Japan due to prohibition offoreign currency exchange or suspension of remittance.

Overseas Investment Insurance
Investment

Japanese
Company

ForeignCompany(Overseas Subsidiary,
Joint Venture, etc.)×
Unable to remit

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

When a subsidiary of a Japanese company establishes subsubsidiaries in a number of countries, this insurance covers
losses if one sub-subsidiary is forced to discontinue business

Overseas Investment
Insurance

Overseas Investment
Insurance
Investment

Japanese
Company

50

Annual Report FY2018

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

Country Y

Investment Country A

×

SubsubsidiaryA

Subsidiary
Investment Country B

Subsubsidiary
B

Business activities

×discontinued, etc.

Overseas Investment
Insurance

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

Country Y

Investment

Subsubsidiary
A×

Overseas Investment
Insurance

NEXI Review of
Performance

When a subsidiary of a Japanese company in a foreign country
establishes a number of sub-subsidiaries in the same country,
this insurance covers losses if one sub-subsidiary is forced toBusiness activities

×discontinued, etc.

Subsidiary

NEXI Activities

Investment

Investment

Subsubsidiary
B

Japanese
Company

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

Insurance Products

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

or payment is delayed.
NEXI becomes involved through reinsurance in this scheme.
It is called the fronting because NEXI sells the insurance productthrough an overseas Japanese non-life insurance company.

Japanese Company

Overseas Subsidiary

Buyer
Sales contract

Investment

Insurance contract

Japanese Casualty
Insurance Company

About NEXI and
Organizational Operation

Singapore, Hong Kong, Thailand, UK, Vietnam

FY2018 Financial Results

Reinsurance
contract
Country B

Export contract / Intermediary trade

Buyer

Annual Report FY2018

51

Insurance Products

Application Procedures for Trade and Investment
Applying for insurance
The chart below summarizes the application procedures for Export Credit Insurance.

Consideration of use of
insurance

Presentation of estimatedpremium

Annual Report FY2018

Buyer credit review /Credit rating registration52

Alreadyregistered

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

Not yetregistered

Foreign buyer registration

Trade insurance user (shipper)
registration

Prior consultation

Prior Consultation

Trade Insurance User
(Shipper) Registration

Foreign Buyer
Registration

Registration is required for aﬁ r s t-t i m e u s e r o f E x p o r t C r e d i t
Insurance to obtain an insurance user
code (shipper code).

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

＊ If you already have a shipper code,
re-registration is not required.

Insurance
NEXI Review of
Performance
NEXI Activities

Insured period
Coverage forpre-shipment risks

Insurance Products

Post-shipment
periodPayment due date /st daydoiof
repinsuredLastinsuredperiodPre-shipment
periodDate of shipment

First day of insured period

Insurance application date /Insurance contract date

Export contract date

Elimination
period(5 days)

Coverage fornon-payment risks

About NEXI and
Organizational Operation

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

FY2018 Financial Results

For more information or inquiries,
For more
information
or inquiries,
pleasecontact
us at thephone numbers below:
pleasecontact us at the phone numbers below:
Head Office Underwriting Department
Business Development Group
Toll Free 0120-671-094
Trade Credit Insurance Underwriting Group I Toll Free 0120-675-094
Osaka Branch Office
Underwriting Group

Toll Free 0120-649-818

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

Annual Report FY2018

53

Insurance Products

Application Procedures for Trade and Investment Insurance
Insurance claim payment
The chart below summarizes the procedures for Export Credit Insurance.

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

Loss mitigation obligation

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

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

Deadline for insurance claim

Delegation of authority to NEXI

Insurance claim

Deadline for notice ofoccurrence of losses

Date of occurrence of
insured event

Occurrence of event that
may lead to loss

Insurance contract date

Notice of event that may
lead to loss

Claim
payment

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

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

54

Annual Report FY2018

NEXI Review of
Performance
NEXI Activities

Maximize

Expediate

Streamline

Ensuring recovery
through various means

Distribution of recoveries

Insurance Products

Recovery stage

Termination ofrecovery activity

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

●

NEXI’s partner collection agencies●

The insured●

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

About NEXI and
Organizational Operation

Parties to conduct actual recovery

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

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

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

FY2018 Financial Results

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

Annual Report FY2018

55

TOPICS

Organization for Economic Cooperation and Development (OECD)

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

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

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

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

56

Annual Report FY2018

About NEXI and
Organizational Operation
Profile of NEXI

58

Business Plan

60

Business Operation and Management System 62
Organization Chart

64

Access Map

65

TOPICS

66

About NEXI and Organizational Operation

Profile of NEXI
Organization Name

Nippon Export and Investment Insurance

Date of Establishment

April 1, 2017

Act

Trade and Investment Insurance Act

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

Competent Minister

The Minister of Economy, Trade and Industry

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

Executive Ofﬁcers

Chairman and CEO

Atsuo Kuroda

President

Masafumi Nakada

Senior Managing Executive Ofﬁcer, Member of Board

Keiji Wada

Senior Managing Executive Ofﬁcer, Member of Board

Hidenobu Teramura

Member of Board

Hideo Teramoto

Audit & Supervisory Board Member (Full-Time)

Keishi Nakamura

Audit & Supervisory Board Member

Akio Otsuka

Audit & Supervisory Board Member

Tomoyo Matsui

Number of Employees

195 (as of April 1, 2019)

Scope of Business

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

Brief History

Jul. 1999

Enactment of Act on General Rules for Incorporated Administrative Agency

Dec. 1999

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

Apr. 2001

Administrative Agency
Jul. 2015
Apr. 2017

Enactment of Act Revising a Section of the Trade and Investment Insurance Act
Establishment of Nippon Export and Investment Insurance (“new” NEXI) as a special
stock company(Note: From 1950 through 2001, the trade and investment insurance was handled by the Ministry of Economy, Trade andIndustry, the former Ministry of International Trade and Industry)Ofﬁces(Domestic) Head Ofﬁce: Tokyo, Branch Ofﬁce: Osaka(Overseas) Singapore Branch, Paris Representative office, New York Representative office58

Annual Report FY2018

NEXI Review of
Performance

Executive Officers

NEXI Activities
Insurance Products

Back row: Hidenobu Teramura (Senior Managing Executive Ofﬁcer, Member of Board), Hideo Teramoto (Member of Board)
Front row: Masafumi Nakada (President), Atsuo Kuroda (Chairman and CEO), Keiji Wada (Senior Managing Executive
Ofﬁcer, Member of Board)
About NEXI and
Organizational Operation
FY2018 Financial Results

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

Annual Report FY2018

59

About NEXI and Organizational Operation

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

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

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

60

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

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

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

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

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

Annual Report FY20183 ) Provide greater support for international transactions ofJapanese SMEs and their exports of agricultural, forestry,
and ﬁshery products.

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

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

5 ) Regarding country risk, improve our skills of information
gathering and analysis while strengthening relatedmonitoring, and appropriately reflect new changes
happened in the international situation into reviewing ourunderwriting policies/examinations.
6 ) Formulate a medium-term employment plan with theaim of increasing the number of personnel to 200 or so,
giving consideration to the age structure and conduct
systematic recruitments along with the plan. Also,establish and implement personnel development plan
especially for PF staff who would play leading roles in theformation stage of business projects, and those working
in IT systems, risk control including ceding insurance
risks to another export credit agency/organization, fundmanagement and environmental assessment.
7 ) Enhance our fund management system by starting aphased implementation of unifying fund-related divisions
and systems that are responsible for asset liability
management including conducting valuation of asset sidetaking the market risk into account.
8 ) Achieve an 18.9% recovery rate by FY2021, on the
major transactions that we need to conduct collection ofreceivables.
Note 1: Number of regular employees including assigned staff excluding
those from IT Systems Division.

About NEXI and
Organizational Operation

2 ) Enhance sophisticated level of risk measurements.
Based on the results of quantitative analysis, promote
discussions on the management level to establish aframework to incorporate measurement results into ourpolicy to countries, debtors and sectors which have been
anticipated of having risk concentrations. In addition,4 ) Further increase the precision of buyer credit ratings andrealize more detailed and accurate settings of credit limit
in accordance with credit status of each buyer.

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

3 ) Create a more systematic mechanism to conduct
qualitative risk management and continuously promote
the autonomous implementation of PDCA cycle.

NEXI Activities

3. Create a more attractive working environment.

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

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

FY2018 Financial Results

Annual Report FY2018

61

About NEXI and Organizational Operation

Business Operation and Management System
Corporate Governance◆ Supervision, Evaluation andBusiness Execution
By establishing not only bodies such as the Board of Directors andthe Audit & Supervisory Board in compliance with the Companies
Act but also the Evaluation Committee, Corporate Management
Committee, Corporate Governance Committee and Advisory Group,
NEXI is working to achieve various goals including strengthening
the supervision and evaluation of the Board of Directors and otherbodies and enhancing business execution agility.

Independent
Accounting Auditor

Board of Directors
Advisory Group(Risk/Cash Management)

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

General Meeting of
Shareholders
Audit & Supervisory
Boardvarious laws and regulations such as the Companies Act and the
Articles of Incorporation. The Audit & Supervisory Board consistsof three corporate auditors, two of whom are outside corporate
auditors as stipulated in the Companies Act. In collaboration withthe full-time corporate auditor, the outside corporate auditors
audit the execution of duties of the directors from an outside
perspective and contribute to improving the governance structure
at NEXI. In addition, we have created an Audit Secretariat to assist
the corporate auditors with their duties.

Evaluation Committee

Corporate Management Committee
The Corporate Management Committee is a deliberative bodycomposed of executive officers and others, and deliberates onimportant management issues (except for issues to be addressedby the Corporate Governance Committee).

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

Chairman & CEO

Advisory Group (Risk/Cash Management)Internal Audit Group
Corporate Management
Committee
Corporate GovernanceCommittee

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

Audit & Supervisory Board

As an advisory body to the Board of Directors, the group
evaluates and advises on the risk/cash management state of NEXI
based on outside experts’ knowledge.

◆ Government Involvement
NEXI is a 100% State-owned company that operates its trade andinvestment insurance business under the control and supervision by
the competent minister, and inspection by the Board of Audit and thecompetent ministry.

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

The Audit & Supervisory Board supervises the decision-making
process of the directors and execution of their duties based onCompliance Promotion
NEXI is aware of its public mission and social responsibility asa policy-based ﬁnancial institution responsible for the trade andinvestment insurance system and regards compliance as one of62

Annual Report FY2018

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

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

NEXI has established a department and director in charge ofcompliance issues, responsible for improving and promoting thecompliance system and increasing awareness of and thoroughly
implementing compliance among executive officers and staff
members.
NEXI has established a reporting route in order to detect
important issues concerning compliance at an early stage andimplement necessary measures. NEXI has also created aneffective internal reporting system, which it operates appropriately.

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

Insurance Products

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

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

NEXI Activities

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

◆ System for Implementing andPromoting Compliance

NEXI Review of
Performance◆ Awareness and ThoroughImplementation of Compliance Rules

Risk Management◆ Approaches to Comprehensive
Risk Management
Insurance Underwriting Risk

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

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

◆ System for Promoting Risk Management

FY2018 Financial Results

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

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

About NEXI and
Organizational Operation

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

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

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

Annual Report FY2018

63

About NEXI and Organizational Operation

Organization Chart

General Management andPublic Relations Group(as of January, 2020)

Personnel Group
GeneralManagement andAdministration
Department

Procurement andAdministration Group

Treasury Group
Policy Contract GroupAccounting Group

Corporate Planningand Policy OfficeInternal Audit Group

Corporate
Governance
Department

Environmental
Guideline Examiner

Business Process
and IT Management
OfficeCorporate Planning andInternational Relations Group

Policy and Legal Group

Risk Management Group
Financial Management andReinsurance Group

Business Process Management Group

Audit & Supervisory Board Members
Audit & Supervisory Board

Information System Group
Project Management Group

Environmental
Guidelines Examiner
Secretariat

Audit Secretariat

Business Development Group
Trade Credit Insurance
Underwriting Group I

Evaluation
Committee

Underwriting
Department

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

General Meetingof Shareholders

Board ofDirectors

Chairmanand CEO

Overseas Investment Insurance
Underwriting Group II

Management Group
Advisory Group(Risk/Cash Management)

Independent Accounting Auditor

Corporate
Management
Committee

Corporate GovernanceCommittee

Structured andTrade FinanceInsurance
Department

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

Asset Management
Department

Claims Service Group
Recovery Group

Credit Analysis Group
Environment Group
Personnel Committee

Credit Department
Country Risk Analysis Group
Credit Administration Group

Osaka Branch

Underwriting Group

Singapore BranchParis Representative Office
Overseas Office
New York Representative Office64

Annual Report FY2018

Access Map
Singapore Branch

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

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

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

NEXI Review of
Performance

Head Office

NEXI Activities

JR Suidobashi Sta.

NEXI

NEXI Singapore

Chiyoda First Bldg.
EAST Wing

y

e.
Av

sswa

jiro
Me

Expre

.
t Ave
i Wes

olitan

ve.
san A

East
Exit

West
Exit

h
obas

Haku

Suid

op
Metr

JR Chuo Line

Kitanomaru
maru Squa
Squareare

Toei Subway
Shinjuku Line

Subway Jinbocho Sta.

ita Sta.
Johnan Shinkin Bank

KudanshSendaimae
Crossingi Ave.

YasukunTokyo Metro
Hanzomon Line

Paris Representative Office
Insurance Products

Sunlight Bldg.

e

A4
Exit

in
itta L

ne
i Li

A2
Exit

No.5
Exit

ay M

Villa Fontaine
Kudanshita

Senshu Univ.

No.7 Exit

ubw

S
Toei

oza
oT

etr

M
yo

Tok

Oh
Ohara
Bookkeeping
Schoolc/o JETRO, 27, rue de Berri, 75008 Paris, France
Phone: +33 (-0) 1-4261-5879 Fax: +33 (-0) 1-4261-5049

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

NEXI Paris

New York Representative Office

Yodoyabashi Sta.

Mizuno46th Street

Osaka City Office

NEXI, Osaka

45th Street

Aioi Nissay Dowa Insurance
Yodoyabashi Building

44th Street

Yodoyabashi Sta.
Mizuho Bank

Keihan Line

Penn Station
Port Authority

Madison Avenue

Bank of Japan

43th Street
42th StreetthPark Avenue

NEXI NY

47th Street

Vanderbilt Avenue

Hanshin Expressway Loop LineOye Bridge
Midosuji St.

Higobashi Sta.

Tosabori Ave,

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

Osaka Metro
Midosuji Line

Yodoya Bridge

Tosabori River

Osaka Metro Tanimachi Line

Fifth Avenue

Dojima River

Kita-Shinchi Sta.

Phone +1-212-819-7769 Fax. +1-212-997-0464
Route 1FY2018 Financial Results

JR Tozai Line

Osaka Metro
Nishi Umeda Sta. Yotsubashi
Line

Os

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

hiHigaesda Sta.
Um ta.
aS
Umed

a

ak

JR

.
Sta

About NEXI and
Organizational Operation

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

Grand
CentralTerminal

4.5.6 42street/Lexington
th

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

Annual Report FY2018

65

TOPICSNEXI PR Activities

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

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

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

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

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

This Is When Trade andInvestment Insurance Is Useful( Product Outline )66

Annual Report FY2018

This Is When Trade andInvestment Insurance Is Useful( Use Examples )This Is When Trade andInvestment Insurance Is Useful( Procedures related to insured
events )FY2018 Financial Results
FY2018 Financial Review

68

Financial Statements etc.

69

FY2018 Financial Results

FY2018 Financial Review
Overview of Financial Statements(Millions of Yen)
2nd Fiscal Year (FY2018)
Ordinary income
Underwriting income(Net premiums written)

41,551
22,91822,905

Subrogation income

11,725Investment income

6,900

Other ordinary income
Ordinary expenses

939,779Underwriting expenses

33,354(Net claims paid)

33,517(Acquisition of receivables subrogated by paying claims)(7,727)(Provision for outstanding claims)

2,473(Provision for unearned premiums)(16,915)(Provision for contingency reserves)

22,846

Subrogation expenses
Operating and administrative expenses

388
6,037

Ordinary profit

1,772

Extraordinary income

1,600

Extraordinary losses

3,372

Income before income taxes−

Total income taxes

8

Net loss(8)

Total assets

1,726,083

Net assets

794,887

Profit and Losses
NEXI’s underwritten amount in FY2018, the total amount of
insurance contracts underwritten during the ﬁscal year (the same
applies below), decreased by 13.9% year-on-year from JPY 7.3
trillion to JPY 6.3 trillion. Premium income, the sum of direct
premiums written and inward reinsurance premiums written (thesame applies below), declined by 47.7% year-on-year from 56.1
billion to JPY 29.4 billion.

68

Annual Report FY2018

Net premiums written was JPY 22.91 billion; subrogation
income, primarily consisting of recoveries, JPY 11.73 billion,
and investment income, JPY 6.9 billion. Meanwhile, due to largecommercial risk events, net claims paid was JPY 33.52 billion,
subrogation expenses JPY 390 million, and operating andadministrative expenses JPY 6.04 billion. As a result, provision
for contingency reserve of JPY 22.85 billion was recorded.

Financial Statements etc.

(Millions of Yen)

(Millions of Yen)
Account Title

AmountAccount Title(Assets)(Liabilities)

Cash and bank deposits

1,197,998

Bank deposits

1,197,998

Securities

Amount

447,494

Insurance liabilities

908,017

Outstanding claims reserves

2,473

Underwriting reserves

905,544345,442

Unearned premiums

148,896

Municipal bonds

51,000Contingency reserves

756,648

Corporate bonds

30,900Foreign securities

20,152

Income tax payable

66,681

Deposits received

15,411

718

Unearned income

2,504

Buildings

373

Accrued amount payable

4,201

Equipment and ﬁxtures

342

Other liabilities

Tangible fixed assets

Intangible fixed assets
Software
Software in progress
Other assets

3

22,5293

411

Provision for employees' bonuses

122

1,302

Provision for directors' bonuses

9

1,275

Provision for employees' retirement benefits

506

27

Provision for directors' retirement benefits

12

11,796

Total liabilities

Accrued premiums

6,813(Net assets)

Accounts receivable

1,185

Capital169,352

Accrued income

2,947

Capital surplus

625,553

513

Other assets

338

Deferred tax assets

94

931,196

Legal capital surplus

625,553(19)

Retained earnings(19)

Other retained earnings
Retained earnings brought forward

Total assets

1,726,083(19)

Total shareholders' equity

794,887

Total net assets

794,887

Total liabilities and net assets

1,726,083

About NEXI and
Organizational Operation

Deposits

Insurance Products

Other tangible ﬁxed assets

Other liabilities

NEXI Activities

Government bonds

Receivables subrogated by paying claims

NEXI Review of
Performance

Balance Sheet (As of March 31, 2019)

FY2018 Financial Results

Annual Report FY2018

69

FY2018 Financial Results

Financial Statements etc.
◆ Notes:Significant accounting policies are as follows.
(1) Valuation of securities: Bonds held to maturity are recorded atamortized cost (straight-line depreciation method).
(2) Depreciation of tangible fixed assets is calculated using thestraight-line method.
(3) Depreciation of intangible fixed assets is calculated using thestraight-line method. Software for internal use is depreciatedbased on the straight-line method over the period of internal use(ﬁve years).
(4) Foreign-currency receivables and payables are converted into
Japanese yen at ﬁscal year-end exchange rates, and conversion
adjustments are recorded as proﬁt or loss.
(5) Provision for employees’ bonuses is recognized for the paymentof employees’ bonuses, based on the expected amount to be
paid at the end of the year.
(6) Provision for directors’ bonuses is recognized for the payment of
directors’ bonuses, based on the expected amount to be paid atthe end of the year.
(7) Provision for employees’ retirement benefits is recognized in
preparation for the payment of employees’ retirement allowance,
based on the projected retirement benefit obligation at theend of the year. Retirement benefit obligation and retirement
benefit expense are calculated based on the simplified method
whereby the requested amount to be paid at the end of theyear for voluntary retirement of all employees is regarded as thecompany’s beneﬁt obligation.
(8) Provision for directors’ retirement benefits is recognized in
preparation for the payment of directors’ retirement allowanceas the requested amount to be paid at the end of the year, in
accordance with the internal regulations.
(9) Contingency reserves are recognized in preparation for thepayment of large insurance claims due to political risks or otherreasons, in accordance with Article 22 of the Trade Insurance andInvestment Act.

c. Risk management for financial instruments[1] Country risk management
In concluding insurance contracts that could cause theacquisition of receivables subrogated by paying claims, NEXI’s
Country Risk Analysis Group conducts risk assessment bygathering information through the Berne Union and the OECDand by researching and evaluating country risk.
[2] Credit risk management
For the credit risk management of export contract
counterparties (overseas buyers), the Credit Administration
Group conducts credit check and assessment of overseas
buyers.
[3] Market risk management
Regarding the ﬂuctuation risks of interest rates, prices andexchange rates associated with investments in securities
and time deposits, NEXI manages those risks in line with thefund management plans discussed by the Board of Directors.
The current state of managing these risks is ascertained andcontrolled, and related reports are submitted to the Board of
Directors.
d. Supplementary information on fair value of financial instruments
The fair value of financial instruments is calculated based onquoted market prices and in a rational method when market
prices are not available. Such fair values are measured undercertain assumptions, and therefore they may differ under otherassumptions.
(2) Fair value of financial instruments
The table below describes carrying amounts shown on thebalance sheet, fair value and differences of ﬁnancial instruments as ofthe end of the year, excluding instruments for which fair value cannot
be measured reliably. (Refer to Note 2.)(Millions of Yen)

Carrying
amountFair value Difference
shown onbalance sheet(10) Consumption tax and local consumption taxes are accounted
for by the tax-excluded method.

Significant components of deferred tax assets include
the disallowance of provision for employees’ bonuses,
provision for employees’ retirement benefits, and of
unpaid business taxes, while the main component ofdeferred tax liabilities is retirement benefits liabilities
translation adjustments.
Financial instruments(1) Statusa. Policy on financial instruments
NEXI is engaged in the trade and investment insurance
business. Some of its surplus is invested in securities tostrengthen NEXI’s ﬁnancial base. In addition, the surplus from thetrade and investment insurance business is invested in securities,
deposits, and other ﬁnancial instruments to the extent stipulated
in Article 29 of the Trade and Investment Act.
b. Financial instruments and risk
Receivables subrogated by paying claims are exposed to thecredit risk of debtor countries or debtors. Securities are exposedto the ﬂuctuation risks of interest rates and of market prices.

70

Annual Report FY2018(1) Cash and bank deposits(2) Securities
Bonds held to maturity

1,182,597 1,182,597−

447,494

501,00253,508447,494

501,00253,50813,654

13,654−(3) Receivables subrogated by paying
claims (commercial risk)
Receivables subrogated by paying claims
Allowance for doubtful accounts＊(Net)(4) Accrued premiums
Assets−−−13,654

13,654

−

6,813

6,813

−

1,650,558 1,704,066

53,508(5) Deposits received

10

10

−

Liabilities

10

10

−

＊Allowance for doubtful accounts associated with receivables subrogated bypaying claims is deducted

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

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

subrogated by paying claims (political risk) and of expected
receivables subrogated by paying claims (political risk), due to thedifficulty in predicting the time and frequency of concluding debt
rescheduling agreements and their details, such as a grace period
and debt reduction.
Note 3. Maturity analysis of financial assets(Millions of Yen)Type

Carrying amountshown onFair valuebalance sheet

Cash and bankdeposits

419,830

Those withfair value notexceeding thecarrying amountGovernment
and municipal
bonds

27,66327,544-120

447,494

501,00253,508

Total

53,6281,182,597

−

−

−

−

−

15,401

4,040

8,213

71,636

138,500

218,500−−

Securities
Bonds held tomaturity

6,813

−

−

−

−

−

−

1,193,450

8,213

71,636

138,500

218,500−

15,401

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

Regarding accrued premiums, the book value is deemed as thefair value since it is scheduled to be settled in a short period oftime and the book value approximates the fair value.
Note 2. Financial instruments whose fair value cannot bemeasured reliably
Financial instruments whose fair value cannot be measured reliably
are as follows.

Total＊Receivables subrogated by paying claims (commercial risk) are not given
due to the absence of redemption dates.
＊1 Of cash and bank deposits, the amount accumulated in the aforementioned
Fund is included in Undetermined.

Accumulated depreciation of tangible fixed assets is
JPY 292 million.
The breakdown of underwriting reserves at the end of
the year is as follows.

Insurance Products(4) Accrued premiums and (5) Deposits received

Over 1 to 3 Over 3 to 5 Over 5 to Over 10 to Over 20 Undeteryears
years
10 years 20 years
years mined＊1

NEXI Activities

Government
and municipal
bonds

473,458(Millions of Yen)
Within 1
year

Difference

Those with fairvalue exceeding
the carrying
amountNEXI Review of
Performance(2) Securities

Underwriting reserves

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

JPY 158,139 million

Underwriting reserves for outward reinsurance related
to the above

JPY 9,243 million

Net (a)JPY 148,896 million

Underwriting reserves for others (b)JPY 756,648 million

Total (a + b)

JPY 905,544 million(Millions of Yen)

Carrying amount shown on balance sheet
15,401

Deposits received

15,401(Millions of Yen)

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

53,027

Total net assets, the basis for calculating net assets per share,
is JPY 794,887 million, and the full amount is related to commonshares. The number of common shares at the end of the year is 15
million.

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

JPY 53,027 million

Receivables subrogated by paying claims (commercial risk)

JPY 12,777 million

Expected receivables subrogated by paying claims(political risk)−

Expected receivables subrogated by paying claims(commercial risk)

JPY 877million

Transferred claims
Total

FY2018 Financial Results

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

Net assets per share is JPY 52,992.48.
About NEXI and
Organizational Operation

Cash and bank deposits−
JPY 66,681 million

Amounts are rounded off to the nearest integer unit.

It is difficult to measure the fair value of receivables subrogatedby paying claims, due to the absence of value based on market
prices. Similarly, it is difﬁcult to measure the fair values of receivables

Annual Report FY2018

71

FY2018 Financial Results

Financial Statements etc.
Statement of Income (April 1, 2018–March 31, 2019)(Millions of Yen)
Account Title
Ordinary income
Underwriting income
Net premiums written
Foreign exchange gains

41,551
22,91822,905
13

Subrogation income

11,725Investment income

6,900Interest and dividends income
Foreign exchange gains
Other ordinary income
Ordinary expenses

6,230
670
9
39,779Underwriting expenses

33,354

Net claims paid

33,517

Acquisition of receivables subrogated by paying claims(7,727)

Commissions(839)

Provision for outstanding claims

2,473

Provision for underwriting reserves

5,930

Provision for unearned premiums(16,915)

Provision for contingency reserves

22,846

Subrogation expenses
Operating and administrative expenses

388
6,037

Ordinary profit

1,772

Extraordinary income

1,600

Gain on government grants

72

Amount1,600

Extraordinary losses

3,372

Loss on software

3,372

Income before income taxes−

Income taxes-current

6

Income taxes-deferred

2

Total income taxes

8

Net loss(8)

Annual Report FY2018

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

JPY 29,362 million

Reinsurance premiums paid

(JPY 6,458 million)

Total

JPY 22,905 million

JPY 275 million

Debt recovery expenses (underwritten)

JPY 106 million

Recovery expenses (inward reinsurance)(Millions of Yen)−
JPY 33,517 million(3) The breakdown of commissions is as follows.
Commissions for agencies and others

JPY 1 million

Commissions for outward reinsurance(JPY 839 million)

Total(JPY 839 million)

Provision for unearned premiums (before thededuction of underwriting reserves for outward
reinsurance)(JPY 11,692 million)

Provision for underwriting reserves for outward
reinsurance related to the above

JPY 5,224 million

Net (a)(JPY 16,915 million)

Provision for other underwriting reserves (b)JPY 22,846 million

Total (a + b)

JPY 5,930 million(5) The breakdown of interest and dividends income is as follows.

Interest and dividends from securities
Other interest and dividends
Total

JPY 805 million−
JPY 6,230 million

Subrogation income

Gain on government grants recorded as extraordinary
income refers to grants provided by the government
to partially compensate for the impact that debt
deduction for HIPCs and others has on the trade andinvestment insurance business.
Net loss per share is JPY 0.55.
Net loss for the current ﬁscal year, the basis for calculating net
income or loss per share, is JPY 8 million, with the full amount of
the loss being related to common shares.
The average number of common shares during the ﬁscal year
was 15 million. The diluted net loss per share is not given since
there are no dilutive shares.

Other notes:

Interest from receivables subrogated by paying
claims (political risk)

JPY 3,969 million

Recovery of receivables subrogated by paying
claims (commercial risk)

JPY 469 million

Interest from receivables subrogated by paying
claims (commercial risk)

JPY 51 million

Related expenses

Recovery of transferred claims

JPY 184 million

Total

Loss on disposal of software in progress

FY2018 Financial Results

Loss on software
During the current fiscal year, misconduct was discoveredin the process of developing NEXI’s more advanced trade andinvestment insurance system, including its bidding. As a result,
NEXI recognized JPY 3,372 million as loss on software, the totalsum of software in progress, which was previously recorded asassets by the ﬁscal year-end and has been written off from thisyear’s ﬁscal report, due to no expectation of the system’s use;
and related expenses, which was incurred in the ﬁscal year.
The breakdown of the item is as follows.

JPY 5,114 million

JPY 2,594 million
JPY 778 million
JPY 3,372 million

JPY 1,095 million

Recovery received of overseas inward
reinsurance

JPY 99 million

OthersJPY 27 million

Total

−

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

Recovery of receivables subrogated by paying
claims (political risk)

Foreign exchange gains (subrogation income)−

JPY 5,425 million(6) The breakdown of subrogation income and subrogation
expenses is as follows.

Recovery received

1,600

About NEXI and
Organizational Operation

Interest from bank deposits

Trade and
Proceeds
Major
Ministry of Directly held investment
fromshareholder Finance100%
insurance government
administration grants1

Insurance Products(4) The breakdown of provision for underwriting reserves (ﬁguresin parentheses are reversal of provision) is as follows.

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

NEXI Activities

Type

Total

JPY 388 million

JPY 33,517 million

Reinsurance claims recovered

JPY 6 million

Total

Business with related parties is as follows.

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

Loss on bad debts (commercial risk)

NEXI Review of
Performance◆ Notes:Amounts are rounded off to the nearest integer unit.

JPY 717 million
JPY 11,725 million

Annual Report FY2018

73

FY2018 Financial Results

Financial Statements etc.
Statement of Changes in Shareholders' Equity (April 1, 2018–March 31, 2019)(Millions of Yen)
Shareholders' Equity
Capital Surplus
Share
CapitalBeginning balance

169,352

Retained Earnings
Other retained
earnings

Total
shareholders'equityTotal net
assetsLegal capitalsurplus

Total capitalsurplus625,553625,553

(10)

(10)

794,895

794,895

−

(8)

(8)

(8)

(8)

Retained earnings
brought forward

Total retained
earnings

Changes during theyear
Net loss
Total change during
the yearEnding balance

−

−

−

(8)

(8)

(8)

(8)

169,352

625,553625,553

(19)

(19)

794,887

794,887◆ Notes:
Type and number of issued shares and treasury
shares(Thousands of Shares)
Number ofshares as ofApril 1, 2018

Increase during
Decrease
Number of
the fiscal year during the fiscal shares as of2018
year 2018
March 31, 2019

IssuedsharesCommonshares

15,000−−15,000Total

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

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

Dividends
There are no applicable matters.

74

Annual Report FY2018

(Millions of Yen)
Account Title

AmountCash flows from operating activities
Premiums received

26,411

Insurance claims paid

(33,509)

NEXI Review of
Performance

Statement of Cash Flows (April 1, 2018–March 31, 2019)(1)

Commissions

33,209Payment for allocation of collection from receivables subrogated by paying claims(6,099)Payment for operating and administrative expenses(6,134)

NEXI Activities

Proceeds from collection of receivables subrogated by paying claims(29)

OthersSubtotal

13,849Interest and dividend income received

10,071

Income taxed refund (paid)(160)

Net cash provided by (used in) operating activities

23,760Cash flows from investing activities(80,000)

Purchase of securities(100,651)

Proceeds from sales and redemption of securities

16,500Total from asset management activities(164,151)(Total from operating and asset management activities)(140,391)

Purchase of tangible fixed assets(23)

Purchase of intangible fixed assets(1,071)

Insurance Products

Payments into time deposits(27)

OthersNet cash provided by (used in) investing activities(165,272)

Cash flows from financing activities
1,600

Net cash provided by (used in) financing activities

1,600

Effect of exchange rate changes on cash and cash equivalents

1,096

Net increase (decrease) in cash and cash equivalents(138,816)

Cash and cash equivalents at the beginning of the year

1,241,712

Cash and cash equivalents at the end of the year

1,102,896◆ Notes:Cash and cash equivalents in the statement of cash
flows comprise cash on hand, deposits that can bewithdrawn at any time, and short-term investmentsthat are readily convertible into cash and bear only
minor risks with respect to fluctuation of value with
their redemption deadline arriving within about
three months from the acquisition date.

FY2018 Financial Results

The Statement of Cash Flows to be submitted
to the Minister of Trade, Economy and Industry
under the provisions of Article 20 of the Trade andInvestment Insurance Act is prepared in accordancewith accounting principles generally accepted inJapan and ordinance on terminology, forms andpreparation methods of financial statements.

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

About NEXI and
Organizational Operation

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

Cash and bank deposits

1,197,998(79,701)

Time deposit(15,401)

Other bank deposits＊
Cash and cash equivalents at the end of the year

1,102,896＊Other bank deposits are not included in the scope of cash and cash
equivalents due to the following reason. Under the debt relief agreement
between the governments of Japan and Cuba, the Cuban government
opened an account at Banco Nacional de Cuba under the name of“NEXI.” The use of withdrawals from the account is restricted to activities
including Cuban-peso denominated projects related to the development of
Cuba approved by both governments, with the account’s users making a
repayment of the equivalent amount in Japanese yen.

Amounts are rounded off to the nearest unit.

Annual Report FY2018

75

FY2018 Financial Results

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

Details

Receivables subrogatedby paying claims

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

Accrued premiums

Accrued premiums associated with insurance application

Accrued income

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

Outstanding claims
reserves

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

Unearned premiums

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

Contingency reserves

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

76

Account item

Details

Net premiums written

Direct premiums written adjusted by reinsurance premiums, with inward reinsurance premiums added andoutward reinsurance premiums deducted

Subrogation income(expenses)

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

Investment income(expenses)

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

Net claims paid

Claims paid less reinsurance claims collected

Acquisition ofreceivables subrogatedby paying claims

Value at the time of recognition of acquiring receivables subrogated by paying claims (excluding transferredclaims)Commissions

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

Gain on government
grantsGrants received, related to matters including debt forgiveness deemed necessary to fulfill international
obligations under Article 36 of the Trade and Investment Insurance Act

Annual Report FY2018

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

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

Head Office
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