John Lentaigne,
Head of Credit & Political Risk at Specialist Risk Group
As global markets navigate heightened uncertainty, credit and political risk insurance (CPRI) remains a
cornerstone for enabling investment in emerging economies. In this Q&A, John Lentaigne, Head of Credit
& Political Risk at Specialist Risk Group (SRG), shares insights on market trends, the role of multilaterals,
and innovations shaping the future of sustainable finance.
Setting the Global Context
CPRI market has undergone significant change in recent years. How would you describe the current state of the global credit and political risk insurance industry particularly in terms of capacity, pricing dynamics, and sentiment toward emerging and frontier markets?
The market has undergone a revolution in the last decade, in particular with Lloyd’s removing their prior regulations that boxed Lloyd’s syndicates into narrow trade-related credit and sovereign non-payment risk. This means that CPRI insurers these days can consider a far broader subset of risks and asset classes. But from a specific development perspective, this evolution has meant that emerging and developing nations form a smaller portion of CPRI insurers risk portfolios than they previously did. Another interesting trend has been the intensifying specialisation of CPRI insurers, increasing the need for specialised intermediation. We’d argue, the market 10-15 years ago was relatively homogeneous compared to the current state of play; where ‘the market’ is, in our view, a series of adjacent sub-markets with insurers employing varied strategies as to which areas to participate in and to what extent. Market capacity remains robust and continues to grow year on year, as does the market’s capabilities around tenor (where insurers are having to respond to a phenomenon being labelled ‘tenor creep’ – the gradual, but seemingly continual, lengthening of the duration of risks insured. Pricing has stabilised for investment-grade sovereign and quasisovereign exposures, while frontier markets and distressed credits attract significant premium differentiation. Sentiment toward emerging markets is cautiously constructive: yields are presently compressed and lenders are active, but they demand robust risk-mitigation structures, particularly for long-tenor transactions.
MDBs, ECAs, and Multilateral Insurers — Complementarity in Practice
In your experience, what differentiates multilateral insurers such as ICIEC from private CPRI providers? Where do you see the strongest complementarities between MDBs, ECAs, and private market insurers in supporting high-risk or long-tenor transactions?
Multilateral insurers such as ICIEC bring unique advantages: preferred creditor status, deep regional knowledge, significant influence in member countries, and an alignment with development objectives (rather than national export priorities). Private insurers excel in speed, flexibility, and bespoke structuring. The strongest complementarities arise when MDBs provide anchor guarantees, enabling private markets to extend tenor or access capacity that would otherwise be unavailable — particularly for infrastructure, energy transition, and sovereign-linked deals.
Studies increasingly show that riskmitigation instruments can materially reduce the cost of finance. How do private lenders and institutional investors view multilateral guarantees/insurance when assessing pricing, tenor, and credit risk in emerging markets?
Private lenders and institutional investors increasingly recognise multilateral guarantees as catalytic. These reduce perceived sovereign and political risk, which directly influences pricing and tenor decisions. For many credit committees, the presence of a multilateral insurer signals enhanced recovery prospects and improved governance standards, making transactions more attractive relative to standalone emerging-market risk. For single-B rated sovereigns, we think that the presence of a multilateral guarantor can be a major mobiliser of private reinsurance, allowing for longer and larger transactions, and also the sort of complex structuring that is often required to bring institutional investors into such funding structures.
De-Risking and the Cost of Capital
Based on your interactions with banks and institutional investors, how do tools such as credit enhancement and risk mitigation instruments offered by multilaterals translate into tangible reductions in financing costs?
Based on your interactions with banks and institutional investors, how do tools such as credit enhancement and risk mitigation instruments offered by multilaterals translate into tangible reductions in financing costs?
Credit enhancement tools translate into tangible benefits by lowering risk-weighted asset charges and improving internal ratings. For many institutional investors, they simply cannot by mandate contemplate the financing without such de-risking. Multilateral guarantors, such as ICIEC, tend to target transactions that enable private capital but also generate what we term quasi-concessional all-in pricing. In some cases, these instruments can compress margins by 50–150 basis points, especially for long-tenor or high-risk jurisdictions.
From a purely market-driven perspective, what makes a transaction “bankable” in emerging markets today? What riskmitigation elements most reliably shift investor appetite or credit committee decisions?
Bankability today hinges on predictability, enforceability and clarity of risk location. Transactions that combine strong contractual frameworks, transparent governance, and credible risk-mitigation — such as the insurance solutions ICIEC provides — are far more likely to clear credit committees. Investors also value blended structures that align their need to make commercial returns with development impact
Private Sector Lens — What Investors Actually Need
Working closely with private lenders and corporates, what are the key concerns they raise when considering long-tenor or frontier-market exposures? How do issues such as FX liquidity, governance, sovereign behaviour, or climate vulnerability shape their risk appetite?
The top concerns remain FX liquidity, sovereign behaviour under stress and of course ultimately default risk, and regulatory unpredictability. Climate vulnerability is increasingly material, as it affects both physical risk and fiscal resilience. We think for instance that it is not coincidental that so many sovereigns in the Sahel region are currently experiencing serious challenges. Governance and debt transparency are critical — lenders want assurance that projects will not be derailed by policy shifts or arrears episodes.
How can multilateral insurers — including ICIEC — better present, structure, and communicate their insurance solutions to achieve stronger traction with private investors?
Clear communication of product features and claims history is essential. Private investors respond well to simplicity and certainty — concise term sheets, standardised documentation, and transparent pricing models. Demonstrating how coverage interacts with Basel capital treatment or rating agency methodologies can significantly boost uptake.
Blended Finance, MDB Reform, and Sustainability
The FFD4 Conference formally recognised the role of ECAs and multilateral insurers in private capital mobilisation. What practical impact do you believe this recognition will have on market behaviour or blendedfinance structures going forward?
Formal recognition of ECAs and multilaterals as mobilisers of private capital should accelerate blended-finance adoption, but we think the role of multilateral guarantors for instance needs to be better factored into other frameworks such as the Common Framework. We expect greater use of risk-sharing platforms and co-guarantee structures, enabling MDBs to stretch balance sheets while crowding in private liquidity. This could be transformative for climate and infrastructure pipelines in high-risk jurisdictions as truth be told there is insufficient concessional funding to meet all needs.
How do you see the intersection of CPRI, climate finance, and sustainable development evolving? Are you observing greater interest in Green or SDG-linked transactions where guarantees can be catalytic?
Despite short-term political noise, there remains clear long-term momentum behind green and SDG-linked transactions. Guarantees are increasingly viewed as enablers for sustainabilitylinked bonds and climate-resilience projects, particularly where tenor and risk profile would otherwise deter private investors. We anticipate more hybrid structures combining political risk cover with performance-linked incentives such as margin adjustment mechanisms relating to ESG criteria.
Looking ahead, what innovations in underwriting, data analytics, stress testing, or risk modelling are needed for the insurance industry to support the next generation of climate-transition and resilience projects in emerging markets?
Underwriting must evolve to incorporate climate stress testing, more granular and reliable ESG data, and scenario modelling for transition risk. Advanced analytics — including satellite data for physical risk and even AI-driven credit scoring — will be critical. The industry also needs dynamic pricing tools that reflect both climate exposure and resilience measures. What we don’t want to see is that entire regions becoming unbankable due to climate risk, which is a real possibility. Insurance companies are probably more realistic about climate risk than other investors as they see it daily in their modelling, and through their balance sheet via losses.
Looking Forward
What advice would you offer to ICIEC Member States seeking to leverage CPRI, multilateral guarantees, and blendedfinance partnerships to reduce borrowing costs, strengthen resilience, and attract larger volumes of private capital?
Leverage ICIEC’s guarantees strategically to unlock longer tenors and lower margins. Engage early with insurers and lenders to structure risksharing frameworks that address FX, governance, and climate vulnerabilities. Transparent disclosure and alignment with sustainability objectives will not only reduce borrowing costs but also attract institutional capital seeking impact-driven opportunities. Insurers are an unfunded investor class with significant appetite for ICIEC member countries, and through ICIEC Member States, they can be better engaged.
Final Thoughts
ICIEC stands at the intersection of risk mitigation and development impact, offering solutions that go beyond insurance to unlock sustainable investment in challenging markets. By combining preferred creditor status with deep regional expertise, ICIEC provides confidence to private lenders and investors, enabling longer tenors, lower costs, and greater resilience. As global capital seeks both returns and impact, ICIEC’s role as a catalyst for blended finance and climate-linked projects has never been more critical — helping Member States attract private capital and deliver on their development ambitions.
