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Global Chief Underwriting Officer, Political Risk, Credit & Bond

A major lesson in 2020 so far is that the public and private sectors need each other to keep economies moving. In addition to claiming hundreds of thousands of lives, the coronavirus pandemic has inflicted financial shocks around the world. As governments and businesses begin the process of recovery, they have many opportunities to collaborate, rebuild and invest for future growth.

COVID-19 has caused the deepest global recession in decades, and the World Bank forecasts the global economy will shrink by 5.2% in 2020. By comparison, real GDP in 2019 grew by 2.4%. That is a stunning drop, and it’s even steeper in advanced economies, as the pandemic disrupted supply and demand, trade and finance. Behind those numbers is an enormous human cost, with millions of people out of work and many forced into poverty. Recovery will take a long time, but that timeframe can be shortened if governments and the private sector combine their strengths.

A recent World Bank analysis identified four shocks to global value chains from COVID-19:

  • Employment: The pandemic has caused a global drop in employment due to business closures and social distancing.
  • Trade costs: COVID-19 has raised the cost of imports and exports due to various factors, including increased inspections, reduced hours of operation, route closures, and higher transport expenses.
  • Tourism: International travel and tourism have dropped sharply. To put this into perspective, international air passenger traffic has fallen nearly 89% in 2020, according to the TSA screenings. The International Air Transport Association also says 2020 will be the worst year financially in the history of aviation.
  • Services: Populations in quarantine have shifted away from purchasing services that require close human interaction, such as mass transportation, restaurants and recreational activities. Instead, they are consuming more goods, which can be delivered to people’s homes.

A range of organizations, from government agencies, to international banks, multilateral agencies and development financing groups, are trying to determine what’s next after COVID-19. Some governments are encouraging private institutions and banks to step up and support the rebuilding of critical infrastructure. This is a process of “crowding in” private-sector organizations to balance and supplement public financing with private capital.

The table below offers a sampling of new or expanded programs to aid economic recovery. While the challenges from the pandemic are numerous, the diversity of such programs is a positive sign that shows a great deal of opportunity for public/private partnerships.


Selected New or Enhanced Programs due to COVID-19

World Bank

— Real Sector Crisis Response Facility (IFC)
— Global Trade Finance Program (IFC)
— Working Capital Solutions Program (IFC)
— Combined Global Trade Liquidity and the Critical Commodities Finance Programs (IFC)
— Health Emergency Preparedness and Response Multi-Donor Fund (HEPRF)
— COVID-19 Fast-Track Facility (IFC & MIGA)
— Managed Co-Lending Portfolio Program (MCPP) (IFC)


— Working Capital Guarantee Program
— Medium-Term Single-Buyer Insurance Policies Issued to Exporters or Financial Institutions
— Bridge Financing Program
— Pre-Delivery / Pre-Export Financing Program
— Supply Chain Financing Guarantee Program

European Bank for
Reconstruction and Development

Solidarity Package

— Trade Facilitation Program
— Vital Infrastructure Support Program 

Asian Development Bank

 $20 Billion COVID-19 Pandemic Response Package

— COVID-19 Active Response and Expenditure Support Program
— Supply Chain Finance Program
— Asia Pacific Disaster Response Fund (APDRF)


— Finnvera Guarantee
— Start Guarantee
— SME Guarantee

US Development Finance Corporation

— Rapid Response Liquidity Facility

Export Development Canada

— Business Credit Availability Program (BCAP)

Inter-American Development Bank

— Sustainable Development Bonds

— Contingent Credit Facility for Natural Disaster Emergencies (CCF)

“Build it back better”
A rallying cry that can stabilize economies and support businesses to put people back to work is “Build it back better.” This philosophy, which we fully endorse at AXA XL, should inspire investment in critical industries such as transportation, energy, health care and financial services.

Although investments entail risks everywhere, not just in emerging and developing markets, there also are tools to mitigate those risks. Political risk, credit and bond solutions offer ways to protect investors, balance portfolios, achieve capital relief and ensure that projects are completed.

Understanding complex risks and providing innovative solutions is in AXA XL’s DNA—from our underwriters to our risk analysts, we look to find solutions among the challenges. We therefore take pride in sharing our expertise on each and every project for which we provide financial support. We are eager to partner with governments, development agencies and financial institutions on strategic projects, to accelerate global economic recovery and drive growth into the future.

All in all, AXA XL is committed to help our clients exchange uncertainty for certainty by offering the coverage to invest and conduct cross-border trade with confidence.

The shocks from the COVID-19 pandemic make clear that the risks to critical infrastructure sectors are sizable. At the same time, those same sectors also represent opportunities for the public and private sectors to work together and make a difference. A bigger risk, frankly, is to remain on the sidelines.

About the Author
Daniel Riordan is President and Chief Underwriting Officer for Political Risk, Credit and Bond at AXA XL and is based in Washington, DC. Before joining AXA XL, he held various senior executive roles in political risk, specialty and global corporate property and casualty insurance. He has had a long association with the Berne Union, an international association of export credit insurance organizations, serving as president from 2013 to 2015.

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