Business Overview & Financial Data FY21

Business and Operational Review
Reinsurance
MIGA Financial Highlights
BUSINESS AND OPERATIONAL REVIEW
Against the backdrop of the COVID-19 pandemic and declining FDI, MIGA continued to mobilize private investment into developing economies and increased its gross outstanding guarantee portfolio from the prior fiscal year. In FY21, the agency issued US$5.2 billion in new guarantees in support of 40 projects. Twenty-five percent of the gross issuance was in IDA and/or FCS countries, and 26 percent was in projects that support climate finance. MIGA’s gross outstanding exposure stands at US$23 billion and net exposure at US$9.1 billion.

Guarentee Portfolio Exposure

 

Guarentee Portfolio Exposure

  Gross Guarantee Portfolio Exposure ($B) Net Guarantee Portfolio Exposure ($B)
FY17 17.8 6.8
FY18 21.2 7.9
FY19 23.3 8.3
FY20 22.6 9.2
FY21 22.9 9.1
Guarantee Portfolio Exposure
REINSURANCE

Since 1997, MIGA has successfully leveraged reinsurance as a tool to use its capital efficiently and manage the risk profile of its portfolio. The primary benefits of reinsurance accrue to MIGA’s clients—first, to the investors, who gain access to increased capacity to insure eligible projects in developing countries; and second, to client countries that benefit from higher FDI.

The agency continued to use reinsurance capacity, ceding US$3.5 billion of new business during FY21 to the reinsurance market in line with the strategy of preserving capital to fund future growth. As of June 30, 2021, US$13.6 billion (59 percent) of the outstanding gross portfolio was reinsured. Over the past five years, MIGA has increased the use of reinsurance in its guarantee portfolio, allowing the agency to support its growth trajectory through increased guarantee capacity without the need for additional capital from its shareholders.

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Portfolio Reinsurance ($B) and Rate (%)

Bar Chart
MIGA FINANCIAL HIGHLIGHTS

Financial Results

By fiscal year, millions of dollars 2017 2018 2019 2020 2021
Gross premium income 179.7 210.1 237.9 232.3 239.3
Net premium incomea 93.2 104.1 115.1 117.1 121.3
Administrative expensesb 51.3 51.6 57.8 61.1 58.7
Operating incomec 41.9 52.5 57.3 56.0 62.6
Net income 200.2 40.9 82.4 57.2 81.5
Administrative expenses to net premium income ratio 55% 50% 50% 52% 48%
  1. Net premium income equals gross premium income and ceding commissions less premium ceded to reinsurers and brokerage costs
  2. Administrative expenses include expenses from pension and other post-retirement benefit plans
  3. Operating income equals net premium income minus administrative expenses

Capital Measures

By fiscal year, millions of dollars 2017 2018 2019 2020 2021
Total economic capitala 592 685 717 756 768
Shareholders' equity 1,213 1,261 1,320 1,335 1,474
Operating capital 1,398 1,471 1,542 1,591 1,724
Total economic capital/ operating capital (%) 42% 47% 47% 48% 45%
  1. Total economic capital (EC) equals capital consumption from the guarantee portfolio, plus capital required for operational risk and investment risk. Effective FY17, EC is based on a new model and is not comparable with prior periods based on an older EC model.

Financial Results

2017
2018
2019
2020
2021
Gross premium income 179.7
Net premium incomea 93.2
Administrative expensesb 51.3
Operating incomec 41.9
Net income 200.2
Administrative expenses to net premium income ratio 55%
Gross premium income 210.1
Net premium incomea 104.1
Administrative expensesb 51.6
Operating incomec 52.5
Net income 40.9
Administrative expenses to net premium income ratio 50%
Gross premium income 237.9
Net premium incomea 115.1
Administrative expensesb 57.8
Operating incomec 57.3
Net income 82.4
Administrative expenses to net premium income ratio 50%
Gross premium income 232.3
Net premium incomea 117.1
Administrative expensesb 61.1
Operating incomec 56.0
Net income 57.2
Administrative expenses to net premium income ratio 52%
Gross premium income 239.3
Net premium incomea 121.3
Administrative expensesb 58.7
Operating incomec 62.6
Net income 81.5
Administrative expenses to net premium income ratio 48%
Footnotes
  1. Net premium income equals gross premium income and ceding commissions less premium ceded to reinsurers and brokerage costs
  2. Administrative expenses include expenses from pension and other post-retirement benefit plans
  3. Operating income equals net premium income minus administrative expenses

Capital Measures

2017
2018
2019
2020
2021
Total economic capitala 592
Shareholders’ equity 1,213
Operating capital 1,398
Total economic capital/ operating capital (%) 42%
Total economic capitala 685
Shareholders’ equity 1,261
Operating capital 1,471
Total economic capital/ operating capital (%) 47%
Total economic capitala 717
Shareholders’ equity 1,320
Operating capital 1,542
Total economic capital/ operating capital (%) 47%
Total economic capitala 756
Shareholders’ equity 1,335
Operating capital 1,591
Total economic capital/ operating capital (%) 48%
Total economic capitala 768
Shareholders’ equity 1,474
Operating capital 1,724
Total economic capital/ operating capital (%) 45%
Footnotes
  1. Total economic capital (EC) equals capital consumption from the guarantee portfolio, plus capital required for operational risk and investment risk. Effective FY17, EC is based on a new model and is not comparable with prior periods based on an older EC model.