Innovation in Political Risk Insurance: Experience from the Multilateral Investment Guarantee Agency
The Multilateral Investment Guarantee Agency (MIGA) is the youngest of The World Bank Group's four financial institutions, but it has a long history of innovation in its mandated sphere: political risk insurance and credit enhancement. MIGA's mission is to foster cross-border investment flows to support development, with the goal of eradicating poverty and enhancing shared prosperity in emerging market and developing economies. The path to accomplishing this mission has, however, been continually evolving. This article provides a discussion of the: (1) contextual backdrop to innovation for a multilateral financial institution providing political risk insurance; (2) the importance of political risk insurance and the traditional coverage provided; (3) the expanded capability to de-risk private investments as seen through the lens of innovation at MIGA; and (4) a conclusion on the continuing importance of innovation in a changing global environment.