Former US President Bill Clinton has helped launch LeapFrog Investments, a private equity firm committed to investing $100 million in the next 10 years in micro-insurance platforms in Africa and Asia. Clinton made the announcement at the annual meeting of the Clinton Global Initiative, the former President's development-focussed philanthropic venture.
LeapFrog plans to complete eight to 10 transactions of $5 million to $10 million, Andrew Kuper, the founder of LeapFrog, recently told sister publication PrivateEquityOnline.com. The firm's goal is to provide 25 million low-income individuals with access to micro-insurance, which involves small insurance plans managing the risk to life, homes, property, health, crops and businesses.
Kuper said the low-income population around the globe, which consists of four billion to five billion people, the largest untapped market in the world. He said that 80 percent of the population of Africa and 75 percent of Asia's fall into the low-income category.
“We found that there is a huge demand, over one billion people, demanding micro-insurance,”said Kuper, referencing the findings of LeapFrog's 100 country landscape study of the insurance industry in Africa and Asia. In other words, they can pay and they're willing to pay for insurance products that protect them.”
Kuper said there are several African countries that are logical targets for investment, including: South Africa, Nigeria, Uganda, and Kenya. These are countries with large, low-income populations and “relatively decent” infrastructure, Kuper said.
LeapFrog's strategy requires a longer investment period than might be needed in other markets.
“Typically, if you make social investments, it takes a little longer to take off and then the curve is much steeper so you have to be prepared to stay in it a little longer in order to get up to the best part of that steep curve in terms of the value of the business,”Kuper said.