LeapFrog Investments has acquired a KSh 1.68b ($US18.7m) majority stake in Resolution Insurance, though its holding company, Resolution Health East Africa Limited in a move that will help LeapFrog tap into East Africa’s growing insurance sector which is estimated to be a KSh 180 billion (US$2 billion) opportunity.
The investment in Resolution comes just a few months after LeapFrog’s in September raised a new KSh 36 billion (US$400 million) fund for investing in financial services businesses in Africa and Asia and after an exit in Apollo Investments to Swiss Re. Up to KSh 9 billion (US$100million) of this fund is earmarked for investment in East Africa.
LeapFrog also has investments in insurance underwriters and distributors in countries such as Ghana, Nigeria, South Africa and India. The group’s portfolio of companies currently reaches over 22 million people across 16 countries.
In a statement, LeapFrog partner Dominic Liber said: “Resolution is a strong and growing business, with an exceptional management team. In a short time, Resolution has grown to become Kenya’s fourth largest health insurer and positioned itself as a rising star in East Africa’s fast-expanding health insurance space. Our investment positions Resolution to take the next leap in its growth, and we look forward to working with them to expand their reach in health insurance and beyond.”
The deal, which is undergoing final regulatory processes, marks LeapFrog’s second investment in Kenya; in October it announced the sale of its stake in Apollo Investments Limited, one of the top three regional insurers in East Africa, to Swiss Re.
Resolution CEO, Peter Nduati, said “We are excited to partner with LeapFrog for our next stage of growth. We believe that LeapFrog’s dedicated operational investing approach, strong track record in health insurance, and emerging consumer expertise will add tremendous value. Importantly, LeapFrog shares our entrepreneurial ethos and commitment to financial inclusion.”
East Africa is home to a 150 million strong population with insurance penetration rates below 4 percent, creating a vast opportunity to deliver financial inclusion at scale. Investing in businesses like Resolution enable us to continue contributing to the development of enduring institutions that serve the people of East Africa.”