VENTURES AFRICA – LeapFrog Investments has acquired a major share of Express Life Insurance Company. This is the largest foreign investment in the history of Ghana’s Insurance Industry.
According to a statement issued by LeapFrog, Express Life Insurance Company stands to benefit from LeapFrog’s capital and distinctive operational expertise to become the market leader in serving the large untapped market of low-income consumers in Ghana with products often costing less than US$10 per month.
The investment will substantially increase financial inclusion in this pivotal African market and will mark a new phase of inclusive growth for the sector. LeapFrog is the world’s largest investor in inclusive insurance and related financial services with its $135m fund. The fund invests in companies serving the next billion, the vast untapped market of emerging consumers in Africa and Asia. It has made landmark investments in Africa and Asia, contributed to robust operational and financial performance of its portfolio companies, and currently reaches over 8.6 million people, 70% of whom are women and children.
Ghana’s insurance penetration is low compared to other African countries. More than 23 million of Ghana’s almost 25 million population is yet to be insured in any way, a report released earlier this month indicated. However, Ghana’s GDP grew at 13.5% last year and its life insurance industry has grown at 40% annually for the past five years.
Obed Kweku Danquah, Executive Chairman of Express Group of Companies, launched Express Life in 2009. He is a Ghanaian entrepreneur whose businesses focus on financial services for the mass market in Ghana. The company primarily offers hybrid savings and risk products to individuals employed by public sector institutions.
“Given LeapFrog’s profit-with-purpose approach to investing and experience in the insurance industry, they are an ideal partner. This powerful strategic alignment will permanently alter the insurance space in the country by setting a new standard for ethical and inclusive provision of insurance to the mass market” said Danquah.
As an investor, LeapFrog is investing USD$5.5 million as capital and expertise to Express, and providing operational support across the organization. Key operational initiatives include strengthening management, building and training a distinctive agency force, and designing relevant and affordable products.
Mr Doug Lacey, Head of LeapFrog’s operation in Africa, said the name Express Life Insurance would not change, because the Ghanaian company had brand equity in the market they believed must be maintained.
“LeapFrog is committed to driving the delivery of affordable insurance for low-income consumers across Africa, and Express will play a leading role in this regard for Ghana,” said Doug Lacey, the LeapFrog partner who led the transaction.
“Our portfolio now covers five African countries and includes landmark investments in companies such as Apollo, the leading insurance group in East Africa, and AllLife, the innovative South African insurer for people living with HIV/AIDS.”
LeapFrog’s Founder and President, Dr. Andrew Kuper said, “Investing in Ghana underscores LeapFrog’s commitment to high-growth emerging markets that are home to the next billion consumers.” He also revealed that through Express, LeapFrog will to empower over 500,000 Ghanaians with financial safety nets and springboards to a better life.