The proposed investment in QBE del Istmo Re (the “Company” or “QBEDIR”) fits well with IFC’s industry strategy to support locally-based reinsurance companies that have a regional focus. By providing insurance for insurance companies, reinsurance companies support the industry in managing its business more effectively in the context of risk, uncertainty and volatility of insurers’ underlying underwriting and business activity. In addition, reinsurers also provide expertise and services to primary insurers, especially in the fields of product development, pricing, underwriting and claims management. This is particularly useful in developing markets where access to insurance skills may be limited and costly. In recent years, reinsurers have additionally served as an invaluable source of capital relief and flexible financing not otherwise available to insurers, other than reverting back to shareholders. The Company is an established regional player that is expected to grow rapidly in the coming years as a result of the strong management team and market growth potential. The proposed project supports the development of the insurance and reinsurance sectors in the Latin American and Caribbean regions through an investment package that will enable an experienced regional player to further expand and provide a broader range of products while also improving its corporate governance standards. This project is expected to strengthen the capital structure of a regional reinsurance player active in over 20 countries; and to support the Company’s growth throughout the regions.