TOKYO -- Nippon Export and Investment Insurance will partner with France's Coface in providing reinsurance on the trade activity of Japanese companies overseas, helping to broaden coverage to nearly 100 countries.
Coface will extend trade insurance on Japanese companies' exports from one country to another, and NEXI will cover a portion via reinsurance, starting in May. If the seller is unable to collect payment due to the buyer going bankrupt, for example, Coface and NEXI will each cover half of the loss.
Through the partnership, NEXI's reinsurance coverage will expand sharply from 19 nations now to 96 and reach across Asia, South America and Africa. This marks the government-backed entity's first tie-up with a private-sector credit insurer.
The French company is a leading player in the industry, trailing only Euler Hermes -- a credit insurance provider under Allianz Group of Germany -- in premium income.
NEXI has until now provided trade reinsurance for contracts spanning more than two years, such as those involving aircraft and plant building. But now, it will offer reinsurance on trades spanning less than a year, hoping to capture demand from small and midsize electronic parts makers.