Investing in Microinsurance

On the sidelines of Monte Carlo, Swiss Re said it would contribute to a new private equity fund, which has raised USD 200m for investment in insurance and financial services aimed at low-income consumers in developing countries.

This is the second fund raised by Leapfrog Investments, a private equity fund manager specializing in microfinance, particularly insurance.

The new investment vehicle will take stakes in companies that offer insurance and related products and services to low-income consumers in South-East Asia and Sub-Saharan Africa.

Swiss Re's investment is part of its strategy "to support the development of insurance markets, in particular in high-growth markets," says John Piper, Vice President, in Principal Investments & Acquisitions, which is part of Swiss Re's Group Strategy unit.

"For this transaction, we worked with colleagues in Reinsurance and Global Partnerships to establish whether this would be complementary to their objectives too. We received positive views, both highlighting that current insurance penetration in most emerging markets is low and there is an opportunity to develop these markets by giving people access to insurance products"

Leapfrog typically invests in companies that bring insurance and related financial products to people who earn less than USD10 a day, are underserved or excluded from financial services.

Swiss Re's investment comes alongside that of other insurers and financial services providers.

More details on Leapfrog can be found via their website.

Published September 2013

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