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November 20 2014

LeapFrog to acquire majority stake in Resolution Insurance

  • LeapFrog Investments and Resolution Insurance today announce that LeapFrog intends to invest KSh 1.68 billion (US$18.7million) for a majority stake in Resolution Insurance, through its holding company, Resolution Health East Africa Limited
  • Resolution Health East Africa Limited is the holding company for leading East African general insurer Resolution Insurance with operations in Kenya and Tanzania and in partnership with IAA-Resolution in Uganda
  • Kenya’s non-life insurance market is growing at 20 percent per annum, with health insurance leading the charge at 38 percent. Resolution is strongly placed to capture much of this growth
  • LeapFrog’s expertise will give further drive to Resolution’s broader growth strategy, facilitating the delivery of diversified insurance to emerging consumers and businesses in East Africa

Nairobi, Kenya – November 20 2014

LeapFrog Investments and Resolution Insurance, have today announced that LeapFrog intends to invest KSh 1.68b ($US18.7m) for a majority stake in Resolution Insurance, through its holding company, Resolution Health East Africa Limited.

LeapFrog Investments is the world’s largest dedicated private equity investor in emerging markets financial services. Resolution Health East Africa Limited is the holding company for leading East African general insurer Resolution Insurance with operations in Kenya and Tanzania and in partnership with IAA-Resolution in Uganda.

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.”

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.”

Insurance in East Africa is a high potential market, estimated to be a KSh 180 billion (US$2 billion) opportunity. In particular, the Kenyan non-life insurance market is growing rapidly at 20 percent per annum, fuelled by a robust health insurance sector expanding at 38 percent per year. There is a major opportunity to extend access to health and diversified insurance to millions of low-income emerging consumers across East Africa, leveraging Kenya’s strategic position as a regional leader and gateway in.

Said Liber, “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.”

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.

The investment in Resolution reflects LeapFrog’s ongoing commitment to East Africa as an attractive investment destination. LeapFrog recently raised a new KSh 36 billion (US$400 million) fund for investing in financial services businesses in Africa and Asia. 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.

“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.”

Peter Nduati, CEO, Resolution