LeapFrog ready to invest up to 35 million GHS in Ghanaian insurance and financial services businesses
4/2/2010 9:18:49 PM -
Accra - March 29, 2010: LeapFrog Investments, the world's first microinsurance fund, today announced that it has raised the equivalent of 155 million GHS ($110 million) for investment in businesses that deliver affordable and life-changing insurance in Asia and Africa. Leapfrog estimates that of this total, over half could be deployed in Africa. The fund has selected Ghana as one of three priority countries on the continent, meaning that ultimately up to 35 million GHS ($25 million) could be invested in local companies.
LeapFrog Principal Doug Lacey, explains: 'We see significant potential in the Ghanaian market particularly given the rapid growth of the insurance industry since it was privatised, and the strong demand and need among the majority of the population - who are still underserved by insurance products. The Commissioner of Insurance has on many occasions stressed the importance of promoting and developing microinsurance, and we see genuine openness to foreign investment. LeapFrog will invest to help Ghanaian insurance companies to grow and help the Ghanaian people to achieve greater financial inclusion and security.'
The brainchild of a largely African team of insurance and investment industry CEOs and experts, LeapFrog is a long-term and strategic investor. The fund commits substantial capital and expertise to supporting high-growth, high-impact insurance opportunities. LeapFrog now aims to leverage its unique resources and capabilities to make investments in, or partner with, local insurance companies, microinsurers, or businesses with significant distribution platforms that reach the mass market.
'Millions of people in Ghana still do not have access to affordable and relevant financial services. With this latest capital injection to the fund, we look forward to partnering with local companies and insurers, bringing to bear substantial capital and global best practice to ensure microinsurance is delivered with commercial success and profound social impact in Ghana.' adds Lacey.
In addition to Ghana, Leapfrog's priority countries for investment include Kenya, South Africa, India, and the Philippines.
Asked why LeapFrog is especially interested in Ghana, President and Founder Dr. Andrew Kuper said: 'Over 96 percent of the Ghanaian population, or more than 18 million people, are classified as low-income, but they do have sufficient income to afford insurance for their families and enterprises. Insurance can have a transformative impact on their lives and livelihoods, enabling them to build futures without fear. We should be reaching everyone - it can be done on a commercial basis and no one should go without protection.'
The LeapFrog fund aims to invest amounts between around 7 million and 21 million GHS ($5 million to $15 million) per business, so as to drive significant growth. In describing the fund's investment approach, Kuper said 'Our success will be driven by the fact that we are meeting the escalating demand for microinsurance at the right time, with the right people. Our team can add value to portfolio companies in business planning, product design, regulatory and risk management, and development of efficient and high-volume distribution channels.'
Leading investors have aligned behind LeapFrog's profit-with-purpose investment proposition, with four global institutions announcing investments today at a signing ceremony in Frankfurt. The International Finance Corporation, part of the World Bank Group, committed $20 million. The board of the Soros Economic Development Fund has approved a $7 million investment. Flagstone Reinsurance, a global reinsurer, committed $12 million. The largest amount of $25 million was committed by KfW Entwicklungsbank and BMZ, the German Federal Ministry for Economic Cooperation and Development. LeapFrog is now by far the largest dedicated investor in the microinsurance sector worldwide.
With nearly a half a billion rand ready to be invested in Africa, LeapFrog is on the lookout for innovative insurance and financial services companies, or businesses that own strong distribution platforms who could be strong local partners.