LeapFrog Investments, the world’s first micro-insurance fund, has passed its USD100m target capitalisation months ahead of schedule.
The fund invests in high-growth, high-impact insurance and financial services companies in countries including India, the Philippines, South Africa, Kenya, and Ghana.
LeapFrog’s dual aims are to deliver strong returns for its investors and to bring affordable insurance to 25 million low income and vulnerable people in Africa and Asia.
"Today we have achieved the synergy of profit and purpose," says Dr. Andrew Kuper (pictured), president and founder of LeapFrog. "We have opened the gates of the capital markets, ensuring that millions of vulnerable people, for the first time, will be able to build futures without fear."
Four new investors have made commitments to the fund today. IFC, a member of the World Bank Group, committed USD20m. The board of the Soros Economic Development Fund has approved a USD7m investment. Flagstone Reinsurance, a global reinsurer, has committed USD12m. In the largest investment, KfW Entwicklungsbank and BMZ, the German Ministry for Economic Cooperation and Development, committed USD26m.
Together with the USD47m raised by LeapFrog in 2009, these commitments bring the fund to USD112m.
"We are delighted to join a group of visionary investors backing the LeapFrog team to build high-growth companies that support critically underserved communities," says Stewart Paperin, president of the Soros Economic Development Fund.
The total estimated market for micro-insurance is 1.5 billion people, according to Lloyds and the Microinsurance Center, and the micro-insurance industry now has an annual growth rate in excess of 18 per cent. However, the market is underserved with well over 90 per cent of low income people still without any access to insurance.
LeapFrog seeks to invest amounts between USD5m and USD15m in high-growth potential businesses that will bring insurance to financially excluded people – including life, property, catastrophe, and health insurance.
LeapFrog made its first investment of over USD6m in AllLife, a South African life insurer serving people living with HIV.
