QBE Equity 2

completed

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. IFC originally committed US$10.0 million in preferred shares and US$8.5 million in common shares (resulting 7.4% common equity stake) of QBEDIR in March 2010. Since then, the Company has continued to expand its product base and geographic reach with the support of a strong management team. The proposed project consists of an additional equity investment and sends a positive signal to the market as QBEDIR’s second largest shareholder, QBE Insurance Group, divests its participation. The investment will also allow the Company to focus on its regional expansion strategy.