Leading Global Reinsurer SCOR Invests in LeapFrog, Groundbreaking Microinsurance Fund Backing brings Fund to USD $47M and demonstrates strong commercial appeal of new market
PARIS, Nov. 25 /PRNewswire/ -- SCOR, the Paris-based global reinsurer, has announced an investment in LeapFrog, the world's first microinsurance fund. SCOR joins a diverse set of public and private investors, including the European Investment Bank, Omidyar Network, FMO, Triodos-Doen, Hivos-Triodos Fund, ACCION International, Calvert Large Cap Growth Fund, and wealth manager Felipe Medina, in backing LeapFrog's distinctive approach to tapping the massive market for microinsurance. The fund invests in businesses that bring insurance products to low-income and vulnerable people in Africa and Asia, and targets strong returns for investors while reaching 25 million beneficiaries.
"Our investment in LeapFrog is a demonstration of our support of a socially-responsible sector such as microinsurance," says Paolo De Martin, Chief Financial Officer of SCOR. "The Group believes that the microinsurance sector is a market that has the potential to expand very quickly as it represents more than one billion individuals without access to traditional insurance services such as life, health, disability or livestock insurance. The investment was done based on strict investment return criteria applied by SCOR for all its investments."
Numerous studies have demonstrated that low-income people in developing countries are willing and able to pay for a safety net that protects their family or business, but they generally cannot access affordable and quality insurance. Last week, Lloyds released a new study by the Microinsurance Center (MIC), estimating a market size of 1.5 and 3 billion policies. It notes that microinsurance already covers around 135 million people, and has an annual growth rate in excess of 10%, but only 5% of the potential market is penetrated -- a significant opportunity.
"SCOR's commitment confirms the coming of age of microinsurance as a profitable investment class," says Dr. Andrew Kuper, LeapFrog's Founder and President. "For the global insurance industry, growth will come largely from emerging markets -- we cannot ignore the 83% of the population in Asia and 95% in Africa classified as low-income. The industry has a historic opportunity to develop profitable businesses that serve this immense customer base. LeapFrog invests in these exciting businesses, anticipating strong social and financial returns."
Beyond financial capital, LeapFrog can provide portfolio companies with support in business planning, product design, regulatory and risk management, or development of efficient high-volume distribution channels.
According to the MIC study, in addition to profit there are several benefits to commercial insurers in providing and investing in microinsurance. These include a large, diversified risk pool, reputational benefits, improved relations with government, market intelligence and innovation applicable across a range of business activities.
LeapFrog Investments created and manages the world's first microinsurance fund. Launched by President Bill Clinton in 2008, LeapFrog has raised $47 million to date from banks, funds, and microfinance and insurance investors. Its profit-with-purpose investment approach has been hailed by many global leaders as a new frontier for alternative investment and microfinance. www.leapfroginvest.com
SCOR is a leading global reinsurer, covering both Life and Non-Life reinsurance. SCOR's specialist teams operate in over 52 countries, developing value added, innovative and made to measure products and services and making long-term commitments to their clients, namely insurers and large corporations. At 30 September 2009, SCOR's total investments, including cash, stand at EUR 19,699 million. Investments consist of fixed income (44%), funds withheld by cedants (40%), cash and short-term investments (9%), equities (4%), real estate (2%) and alternative investments (1%). www.scor.com
SOURCE LeapFrog Investments