When the institutions that once underwrote billions in aircraft deliveries collapsed or withdrew, a new solution had to be built from scratch. Marsh, Boeing, and Airbus – unlikely architects – stepped in to fill the gap. This is the story of how they did it.

Prologue: A financing system in freefall

One vacant board seat in Washington. One regulatory investigation in Europe. Those were all it took to derail one of the most sophisticated financing ecosystems in the world. 

For decades, the sale and deliveries of aircraft, which often cost upwards of hundreds of millions of dollars, were underpinned by government-backed guarantees that enabled banks to issue large loans to airlines with the confidence that they would be protected even in the event of a default. 

Then, within the span of a year, both the US and European export credit systems came to a halt.

In 2015, the US Export-Import Bank lost the legal ability to approve large transactions – specifically, any deal above $10 million. Without the necessary quorum on its board of directors (which happened because a prolonged political impasse in Washington prevented Congress from confirming new board members), the Bank was unable to vote on high-value financing deals. Although Ex-Im, which had previously guaranteed tens of billions in aircraft financing, continued to process smaller transactions, it was effectively sidelined in the segments that mattered most to the aircraft finance market.

Shortly thereafter, in April 2016, the export credit agencies of the UK, France, and Germany temporarily suspended new export credit support for Airbus deliveries following compliance concerns and investigations into Airbus’s use of third-party intermediaries in export credit applications, which raised potential anti-bribery issues. The suspension significantly constrained access to ECA-backed financing for Airbus aircraft, leaving many international airlines, especially in emerging markets, without a viable financing route for new deliveries. 

“There was suddenly a very large hole in the market,” Robert Morin, Senior Advisor at Marsh, recalled. “Boeing was still producing aircraft. They needed a way to get them delivered, and the traditional financing structures just weren’t there anymore.”

When they stepped away, ECAs were supporting up to 30% of global aircraft deliveries. Their withdrawal threatened to stall production lines at both Boeing and Airbus, which together control roughly 95-96% of the global market for large commercial aircraft deliveries.

It was a rare moment when the world’s largest manufacturers faced constraints not from demand, but from shifts in financing availability. While aircraft deliveries continued, the temporary disruption to key funding channels (particularly export credit support) forced an adjustment in how transactions were structured, with the impact felt most acutely by those airlines with limited access to alternative sources of capital. 

The challenge became how to find a new way to give lenders the protection they once received from sovereign-backed guarantees. Only now, without the sovereign.

What followed was private insurers, brokers, and manufacturers coming together to create something that had never existed before: a fully private, scalable mechanism for insuring aircraft finance risk. A pair of programmes, known as AFIC and Balthazar Finance, would ultimately keep the deliveries flowing and bring the necessary additional capital to the industry. But their success was anything but assured. 

AFIC takes flight

With Ex-Im out of action, Boeing needed a substitute that could unlock capital for its customers. The problem was that, without sovereign backing, traditional financiers were often more cautious about lending into jurisdictions where political or credit risk was high. Aircraft are long-life, high-value assets, meaning repayment schedules often stretch over a decade or more. Even with collateral in hand, many banks need an additional form of security that could cover both the commercial and country risks they face.

Without ECA cover, one such solution turned out to be private insurance.

In June 2017, Marsh McLennan and Boeing launched the Aircraft Finance Insurance Consortium, or AFIC, a first-of-its-kind insurance-backed aircraft financing platform. Instead of relying on public guarantees, AFIC used policies underwritten by a syndicate of global insurers to protect lenders in the event of airline default. That insurance policy, in turn, gave lenders the protection they needed to offer senior secured loans (backed by the aircraft) to a broader range of airline credits, including those in higher-risk markets.

“The idea was to replicate, as much as possible, the kind of security lenders had when ECAs were involved,” said Robert Morin, who helped lead the launch of the programme. “We structured it so that the insurance could mirror the terms of an export credit guarantee, and in some ways, actually offer more flexibility.”

Still, success was not immediate. AFIC had to prove itself to an industry that had spent decades relying on government guarantees. According to Morin, one of the key breakthroughs came in late 2017 when one of the major global airlines used AFIC to finance the delivery of Boeing 777s. “Once we had that precedent, it opened the door to others,” he said. “It showed the market that this wasn’t just theoretical, it worked.”

Indeed, by the end of 2018, AFIC had supported over $2.5 billion in aircraft financings. That number would continue to grow, particularly in emerging markets where commercial lenders tend to be more cautious because of heightened political risk and limited access to reliable credit information.

Far from outright replacing Ex-Im, AFIC was something different and reflected a shift toward greater private sector participation in risk sharing, hinting at a new equilibrium where sovereign and private risk appetites might coexist. But its early success also raised questions. If the private sector could step in this effectively, what role should ECAs continue to play?

That question would become even more relevant the following year, when Airbus and Marsh launched a similar insurance-backed alternative.

Then came Balthazar Finance: Airbus turns to the private market.

If Boeing had AFIC, Airbus needed its own solution. Across the Atlantic, Europe’s aerospace sector was facing a similar challenge of figuring out how to deploy additional and diversified capital for the financing of its deliveries. 

By 2017, it was clear that the amounts needed demanded access to new balance sheets. With tens of billions of dollars in annual delivery financing at stake, Airbus began working with Marsh and a group of insurers to create a new model. The result, launched in 2018, was BalthazarFinance.

Jonathan Dufeu, Global Balthazar Finance Leader at Marsh, recalls that the question driving its creation was whether the industry could rely on traditional channels (like banks, capital markets, or ECAs) to meet the full $90 billion in annual aircraft financing needs. The answer, he said bluntly, was no. “There was a need for new sources of capital. That was the starting point.”

In 2019, the programme closed its first policy, with more on the horizon as the flexibility and the disruptive bank-centric approach from the new product proved very successful. But just a year later, COVID-19 plunged the aviation industry into its worst crisis on record. Despite the exceedingly unfavourable environment, Balthazar Finance, thanks to its unique model, honoured every commitment it made. “Even in the most difficult cases, banks and insurers collaborated to deliver,” Dufeu recalled. By maintaining that record and refusing to falter in the face of what was, effectively, an existential crisis for aviation globally, Balthazar Finance showed the industry that it intended to be taken seriously. And it worked. By 2025, the program had financed 80 transactions across nearly 20 countries, covering both widebody and narrowbody aircraft for airlines and lessors alike, with more than $5.5 billion in cumulative volume.

Like AFIC, Balthazar Finance is not a replacement for ECAs (Dufeu is explicit about that), but together the two marked the first time the private sector had created parallel, transatlantic mechanisms capable of sustaining a global industry on their own.

How it works: Anatomy of an insurance-backed aircraft finance deal

AFIC and Balthazar Finance may sound complex, but at their core, they are built around the simple idea that lenders need protection, and insurers can provide it. What makes these programmes different is how that protection is structured and integrated into a transaction.

In a typical aircraft financing, a bank or group of banks lends money to an airline so it can pay for new aircraft. The loan is secured by the aircraft itself, meaning that if the airline defaults, the lender has the right to repossess the plane. But aircraft are expensive, mobile, and operate across multiple jurisdictions, which can make legal enforcement a challenge, especially in some jurisdictions. For a lot of banks, this means that the collateral of the aircraft alone is rarely enough. This is where insurance steps in. 

In the case of Balthazar Finance, for example, a syndicate of insurers issues a non-payment insurance policy covering up to 100% of the loan. The policy is structured so that the lenders (rather than the airline) are the beneficiaries. If the airline defaults and the bank cannot recover the outstanding debt, the insurers pay out to the lenders under the terms of the policy.

Under Balthazar Finance, the role of the broker (in this case, Marsh) is to assemble the panel of insurers, negotiate standardised terms, and administer the programme. “It works exactly like a commercial loan from the airline’s perspective,” Jonathan Dufeu of Marsh’s Balthazar program explained. “Behind the scenes, the insurance is fully integrated. The borrower sees one bank, one lawyer, one set of documents.”

Unlike ECAs, which operate under statutory mandates and political oversight, Balthazar Finance imposes no fixed country quotas or risk categories, no fixed financing documentation, and it can support any recognised financing format (such as French leases, Japanese Operating Leases (JOLCOs), operating leases, finance leases). It can even accommodate bespoke structures if a strong primary bank is leading the deal and the insurers are comfortable with the risk.

In some cases, the insurance premium itself can be rolled into the financing. Rather than paying up front, the airline can include the cost in the loan, making the product more accessible and predictable. That premium, combined with the bank’s margin, usually results in a cost slightly higher than an ECA-backed loan, but often lower once the value of speed, certainty, and simplicity is taken into account.

ECAs return, but the market has changed

By 2019, the institutions that had once withdrawn began to return. In the United States, the Senate finally confirmed enough board members to restore the Export-Import Bank’s quorum, giving it back the legal authority to approve large transactions. In Europe, the UK, French, and German ECAs gradually resumed Airbus cover after years of investigation and compliance reform.

Yet when they came back, they found a market that had learned to operate without them.

Programmes like AFIC and Balthazar Finance had already filled a portion of the vacuum, establishing new norms for how risk could be shared between lenders and insurers. What had begun as an emergency workaround was now a fully functioning part of the aircraft-finance ecosystem.

“The world didn’t wait,” said Robert Morin. “By the time ECAs returned, the private insurance market had proven its ability to support complex transactions at scale.”

For borrowers and banks alike, that meant more choice once they reentered the market. AFIC and Balthazar Finance provide faster execution and broader eligibility, particularly for airlines in markets that fell outside traditional ECA mandates. The two systems began to coexist with sovereign guarantees anchoring stability, and private insurance adding reach and flexibility.

In practice, this coexistence has created a more layered market. Some transactions still rely on ECA cover, while others are handled entirely by private insurance. Increasingly, the two mechanisms even work side by side. A single transaction might combine an ECA guarantee on part of the exposure with an insurance policy covering the rest, blending the low-cost capital of the public system with the agility of private underwriters.

The result is a financing landscape that is more dynamic and less centralised. ECAs remain vital for anchoring market confidence, but their share is smaller and more selective than before. Private insurers have taken on a wider range of risks, supporting smaller airlines, emerging-market carriers, and innovative financing structures that would once have been inaccessible.

Jonathan Dufeu described it as a more balanced model. “There will always be a role for ECAs. We are not competitors but rather complementary,” he said, “but the market is no longer dependent on them.”

Beyond aviation: A new playbook for infrastructure finance

This has become a blueprint for how the private market can mobilise capital in industries where public guarantees were once the only viable option.

It proved that private insurance, when structured intelligently, can replicate much of what sovereign support once provided (i.e., credit enhancement, liquidity access, and investor confidence). By absorbing the repayment risk, insurers made it possible for lenders to finance assets that would otherwise have sat idle. This can be a lesson for industries beyond aviation.

Marsh is already adapting similar frameworks for adjacent sectors where funding needs are large, long-term, and politically exposed. In shipping, for instance, it launched a similar private non-payment insurance called Marine Supported Finance (“MSF”), which has already closed 3 financings and is increasingly being used to support fleet modernisation and low-emission retrofits. In renewable energy, insurers are beginning to underwrite project-finance exposures in emerging markets where multilaterals cannot meet the growing demand alone. 

Even ECAs are taking notice. Rather than competing with private insurers, many are now looking to partner with them, using reinsurance and co-insurance structures to extend their reach and manage capital constraints. The model that once existed as a stopgap for the aircraft industry is now being studied as a template for how public and private capital can work together to close global infrastructure gaps.

Jonathan Dufeu believes this shift could be transformative. “What AFIC and Balthazar showed is that you don’t always need a government guarantee to unlock financing,” he said. “You just need trust in the structure and collaboration between stakeholders who are willing to share the risk. With insurance-supported finance, the private insurance market is standing out as a new source of balance sheet for capital-intensive industry”

The same dynamics that once underpinned aircraft deliveries are now shaping how the world funds everything from ports and power plants to digital infrastructure. When sovereign capacity is stretched, private markets can step in, not to replace the state, but to keep the systems that connect it running.

In that sense, the insurance-backed model that kept the world flying may yet prove to be one of the most important financing innovations of the decade.