LeapFrog Microinsurance Fund Announces Major New Investors, fund close of $137 million

Microfinance Focus, May 7, 2010: LeapFrog Investments, the world’s first microinsurance fund, announced its final close on $137 million for investments in Africa and Asia – a record amount that makes leapFrog the largest investor in microinsurance worldwide, according to an official statement. The fund announced major new investors including J.P. Morgan, TIAA-CREF, and Proparco as well as the Waterloo Foundation and the ACE Group. J.P. Morgan committed $10 million and TIAA-CREF $7 million to the fund.

The fund’s portfolio companies are anticipated to reach 25 million low-income and vulnerable people in Africa and Asia with life-changing financial services. The companies may offer a range of affordable products including health and life insurance as well as low-income housing and weather index insurance. Safety nets of this kind can be critical to better coping with natural disasters that have afflicted countries such as Chile and Haiti.

LeapFrog also provided new details on its innovative investment strategy. Based on avid interest from local insurers, LeapFrog is identifying and screening a variety of larger opportunities in its priority countries including India, Kenya, Ghana, South Africa and the Philippines. The fund plans to invest in and alongside insurers as well as large distributors, such as microfinance institutions, retail chains, religious groups, and mobile phone networks. LeapFrog expects to deploy around $5 million to $15 million in each portfolio company, to join the board, and to bring deep operational expertise to bear to drive growth and success on the double bottom line.

The fund has already invested in AllLife, a profitable South African life insurer that exclusively serves people living with HIV and diabetes.

Other investors in LeapFrog include the Soros Economic Development Fund and the Omidyar Network (created by eBay founder Pierre Omidyar), the largest development banks including IFC (part of the World Bank Group), KfW, and EIB, as well as major reinsurers Flagstone Re and SCOR. Microinsurance is being sold profitably in many countries and shows enormous potential for growth, with a recent Lloyds study estimating the market to be 1.5 billion people.

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