BIMA is the global leader in providing insurance through mobile technology. The business provides insurance distribution and underwriting to millions of low income people via highly innovative partnerships with major mobile network operators and financial services businesses. In the past, the traditional insurance industry has struggled to reach this vast market.
In just five years, BIMA has over 32 million subscribers in 14 countries, of which approximately 9 million people are reached with insurance products. BIMA’s customer research shows that 75% of their customers did not have access to insurance before. Globally, approximately 40% of customers are rural. In Ghana and Bangladesh, BIMA has doubled insurance penetration.
The business offers a range of affordable life, personal accident and health insurance products for low-income consumers. Since investing, LeapFrog has been instrumental in developing the company’s strategy in areas as diverse as product development, distribution, reinsurance and branding.
BIMA CEO Gustaf Agartson says, “We’re proud of our success so far, but really we believe we’re just at the start of this journey. Mobile technology has the power to transform people’s lives.”
LeapFrog sold a major stake in BIMA as part of a $96.6m investment by Allianz X, the digital investment unit of Allianz Group, the global insurer and asset manager in 2017.
With a focus on “helping the nation feel better one customer at a time,” Goodlife Pharmacy’s customers have voted with their feet, helping Goodlife to become the largest pharmaceutical retail business across East Africa.
In just under four years, Goodlife has grown to provide trusted pharmaceuticals to 600,000 customers from 19 convenient locations – with a total reach of 1.2 million people.
This innovative healthcare business defies the traditional notion of the pharmacy, by delivering a truly customer-centric brand that combines pharmacy services with wellness, beauty and diagnostics. Goodlife prides itself on being the first in the market to introduce consultation centers into all its locations and will shortly be offering telemedicine.
Crucially, pharmacy is often the first point of care for Kenyans – and Goodlife is dedicated to increasing access to healthcare through its stores, thereby improving the quality of life and wellness of East Africa’s growing consumer class. The pharmacies can be found in shopping malls and gas station locations throughout Kenya, placing health services at the heart of communities and making them accessible to all income groups.
Goodlife was recently endorsed by The Pharmaceuticals Society of Kenya as best pharmacy practice in the country; a testament to Goodlife’s ongoing commitment to excellence in pharmacy practice. It is both widely recognized and trusted as a brand that delivers quality medication, in a market where substandard and counterfeit medication are yet to be rooted out.
In 2018, an independent team within IFC recognised Goodlife as having an inclusive business model as it directly reaches people at the base of the pyramid. This is something only 10-20% of IFC investments achieve.
Goodlife plans to expand to over 100 stores by 2021, reaching over 5.5 million consumers, and creating over 700 jobs, of which approximately 400 will be held by pharmaceutical professionals.
It is tapping a high-growth market, with Kenya’s pharmacy sector already worth $725m and set to rise to $1.3bn by 2020.
LeapFrog invested in Goodlife in 2016, marking it the largest direct investment in the East African pharmacy sector to-date.
“Goodlife, with its consumer focused business model, rapid growth, and excellent management team, has proven to be a fine example of how businesses that serve a real social need can be scalable and provide good financial returns,” says Dr. Felix Olale, LeapFrog Partner and Global Co-Leader for Health Investments.
The LeapFrog team brings to bear significant health industry knowledge, operational skills and international networks, and will enable Goodlife Pharmacy to accelerate its growth across East Africa, delivering best-in-class customer care to millions of consumers across East Africa.
LeapFrog’s first investment was in AllLife, a South African company that is quietly turning the life insurance customer model on its head. AllLife has built a profitable business by offering affordable life cover to people living with HIV, people who once were automatically excluded on the basis on carrying the virus that leads to AIDS. More than this, AllLife actively helps clients manage their health. LeapFrog has worked closely with the business, in underwriting, product design and operations.
“We contact our clients every month,” says Ross Beerman, the irrepressible CEO of AllLife, “reminding them to stay healthy, do their blood tests and take their medication. Our clients get healthier just by being our clients.” This is not just a claim. AllLife clients average a 15% improvement in their CD4 count (an immune system marker) within six months of being insured.
Where other life assurers might decline or avoid insuring people with dread diseases, AllLife backs their clients to live – and then helps them to do so. The practical, psychological and social impacts of this are profound. People with HIV are now able to take out loan finance, build their lives and participate in the community. And a significant side effect is the reduction in the stigma around HIV/AIDS.
While AllLife’s social impact is considerable, this is a profitable business, one that has seen 50% growth year-on-year, since being founded in 2004. Its sustainable business model was recognized in July 2015, when AllLife won the Prince of Wales Unilever Global Development Award for Business in the Community.
Neither Ross nor any of the founders came from the insurance world. “Otherwise we would have known that what we have accomplished was impossible.”
Financial services in Sub-Saharan Africa is growing at about 19% annually, with East Africa a particular area of growth. Apollo is one of the region’s star performers when it comes to insurance.
The company, which operates through its wholly owned subsidiary APA, is active in Kenya, Uganda and Tanzania. Apollo sells various types of insurance policies, from life to motor to health to crop insurance. It is a pillar of Kenyan society, emphasizing affordable protection products to the underserved. LeapFrog invested in Apollo in 2011, forming a partnership that focused on creating a dedicated emerging consumer strategy and developing pioneering new health products.
Says Ashok Shah, Apollo CEO, “LeapFrog provided more than capital; the team helped us to scale our substantial health insurance offerings. They helped us launch a number of products for underserved clients, including last needs and hospital cash insurance. These innovations will be crucial not just for Apollo, but for regional development.”
LeapFrog successfully exited Apollo to Swiss Re, in a deal announced in October 2014. By then, Apollo was reaching 969,000 people of whom almost 725,000 were under-served emerging consumers. At exit, health insurance coverage had increased 26% to reach 72,500 people, while life insurance coverage had increased 170% to reach 490,000 people.
Nigeria is leading the African growth story; this exhilarating nation has been an outperformer even among fast-growing African markets. Nigeria has been posting 6% real GDP growth every year for the past decade, 1.2% above that of Sub-Saharan Africa. Currently, 66% of the vast Nigerian market is still underserved with vital financial services.
The Asset and Resource Management Company (ARM) is the leading non-bank financial institution in Nigeria, and the largest independent asset manager. ARM partnered with LeapFrog to expand into life insurance to complement its pensions and investment management offerings. ARM Life offers a wide range of investment and savings, risk and annuity products to Nigeria’s mushrooming employee base and mass-market.
LeapFrog’s team brings significant actuarial and operational skills to bear on the development of ARMLife’s retail presence, helping diversify and grow the business. LeapFrog has worked with ARMLife to bring in new leadership talent and support across management training, as well as to improve governance, financial reporting actuarial and technical services and human capital management.
Today, eighty-nine per cent of working Nigerians are not yet registered for pensions. Pensions not only serve as a safety net for aging Nigerians but can also make a huge impact on the households in which these individuals live – for both children and other family members – supporting education, healthcare and other necessary services. The aim of ARM Pensions, one of the largest fund administrators in Nigeria with approximately $1.8bn in funds under management, is to build understanding and uptake of this essential service.
The company provides pensions and retirement savings accounts to three million Nigerians, of which one million are low-income or emerging consumers. Clients are served through 59 locations across all 36 states of Nigeria, with dedicated mobile offices reaching consumers in the most remote areas, and innovative digital channels ensuring swift access to accounts and assistance. The LeapFrog, ARM Pensions partnership began in June 2018. The investment is a continuation of LeapFrog’s focus on pensions in the West African market, following its successful exit from Ghana’s Petra Trust to Capital Alliance Private Equity IV Limited, a fund managed by African Capital Alliance, a pan-African investment firm in February 2018. LeapFrog worked closely with the Petra Trust team to grow the business to become the largest independent pensions provider in Ghana, achieving 76% GAGR over the period of LeapFrog’s investment. The investment also builds on LeapFrog’s partnership with ARM Group following a 2012 co-investment into what is now ARM Life, a high-growth insurer.
Karima Ola, Partner LeapFrog Investments, commented: “ARM Pensions is a well-established first-class pension fund administrator with an impressive track-record of both profitability and growth. Our team brings significant operational skills to bear on the development of ARM Pensions’ market presence. We have identified valuable opportunities to support the company’s digital strategy, to facilitate partnerships and to increase the firm’s brand awareness in ways that further strengthen customer retention and acquisition. LeapFrog sees the partnership with ARM Pensions, and the shared growth agenda, as capable of delivering large and measurable impact for Nigeria’s people.” Founded in 2005, ARM Pensions is one of the first seven Pension Fund Administrators (PFA) to be granted a license by the National Pension Commission. The company is majority owned by Asset and Resource Management (ARM) Group, Nigeria’s largest and most respected non-bank financial institution, and the country’s largest independent asset manager.
According to the World Health Organisation, orthopaedic conditions are the second largest contributor to disability worldwide. Such conditions significantly limit mobility and dexterity, leading to difficulty working and early retirement from employment, reduced accumulated wealth and decreased ability to participate in social roles. In India, orthopaedic disorders are the most prevalent chronic disease affecting over 200 million people. In particular, elderly populations tend to have a higher prevalence of orthopaedic ailments.
Ascent Meditech, a leading Indian medical products company and distributor of niche consumer healthcare products, is helping to provide relief for these chronic conditions.
Ascent, which has built a sophisticated manufacturing, distribution and retail strategy, specialises in wound care, mobility aids and orthopaedic soft goods. The company sold 15 million products in 2017 through its extensive network of 150,000 retail pharmacy points across 12 Indian States. Ascent’s flagship brand of products, Flamingo, is sold in more than 40 countries across the globe.
The company’s products are currently sold to seven million customers, approximately 90% of whom are low-income emerging consumers, with a focus on providing high quality and competitively priced orthopaedics to India’s aging population. The share of India’s population over the age of 60 is projected to increase from 8% today to 19% by 2050. Typically, elderly consumers prefer medical aids over invasive solutions such as surgery.
Dr. Felix Olale, Partner and Global Co-Lead for Health Investments at LeapFrog commented: “The Ascent Meditech team has achieved outstanding growth in the orthopaedic and wound care market, addressing a core need for consumers with high quality products and competitive prices, thus opening up accessibility. We see a huge opportunity for LeapFrog to partner with an outstanding management team to increase production and distribution of Ascent’s quality and trusted products, including the flagship Flamingo brand, in India, Asia, Africa, and the Middle East.”
The investment in Ascent will capitalise on the favourable dynamics in both the domestic and international markets. The $100 billion Indian healthcare market is expected to expand at 12-15% CAGR.
How much do you need to know about a person before making a loan? Today, Cignifi Inc. is helping answer this question for many of the 2.5 billion emerging market consumers with no credit history, but access to a mobile phone.
Cignifi, a leading tech innovator in emerging market financial services, partners with some of the world’s largest mobile operators and financial institutions, enabling online credit scoring using mobile phone usage data. Partners include AT&T, AXIATA, Telefónica, Globe Telecom, Equifax, Santander, and HFC Bank.
LeapFrog invested in Cignifi in 2017, alongside existing investor Omidyar Network.
Today, over 90% of the population in low and middle income countries are without a documented credit history, meaning they’re unable to borrow or save for the products they need to improve their lives and economic prospects. McKinsey and the IFC estimate that the unmet need for credit among emerging markets businesses is $2.1 trillion to $2.5 trillion, providing a blue-sky opportunity for growth.
Cignifi has created a sophisticated machine-learning platform that’s able to ingest large volumes of mobile data –some 200 million records a month, and growing – from mobile networks. It sorts and presents data in a way that Cignifi’s clients – banks, consumer lending companies, insurers – can easily understand and score. In doing so, it connects financial institutions to emerging consumers who need credit products.
“Cignifi is doing something incredibly important,” said Stewart Langdon, Partner at LeapFrog Investments. “Up until now, the world’s low-income consumers have had a very hard time borrowing money because they don’t have credit histories. Cignifi addresses this through a machine learning platform that integrates with the world’s most accessible infrastructure – mobile networks – to give people a digital identity. This financial technology has the potential to revolutionise how we assess the creditworthiness of billions of people globally and drive down customer acquisition costs.”
To-date the company has credit scored more than 150 million emerging consumers in Asia, Africa and Latin America.
“Mobile enabled financial services have the ability to scale at an unprecedented rate, reaching billions of consumers, and driving vast social impact throughout emerging markets,” said Jonathan Hakim, Founder and CEO of Cignifi. “LeapFrog will accelerate our ambition to reach one billion people in emerging markets by supporting Cignifi’s growth strategy and expansion into adjacent categories such as insurance.”
Cignifi’s platform can be extended to deliver a range of financial services, including insurance and SME services, ultimately enabling the team to reach their goal of providing 1 billion customers with financial fingerprints.
When it comes to financial services, Enterprise Group Limited is a household name in Ghana. Just seven years shy of its centenary, the company, founded in 1924, has been providing Ghanaians with access to life changing financial products for more than 90 years.
The investment in a milestone two times over. At USD $180 million it is LeapFrog’s largest to-date, as well as marking the first investment of the LSAI, a fund in which Prudential Financial, Inc. (PFI) (NYSE: PRU) is the primary investor. It draws from a USD $350m separately managed account established in 2016 with Prudential Financial to access high growth markets in Africa.
“They [LeapFrog and Prudential] bring an incredible network of global insurance contacts and experience, and also the capacity to provide growth capital towards the realisation of our very ambitious strategic objectives,” said Keli Gadzekpo, Group CEO of Enterprise.
Enterprise Group offers a comprehensive suite of financial services including insurance, life cover and pensions to the country’s emerging consumers. A jewel in the crown, Enterprise Life, Ghana’s oldest life insurance company and the country’s leading provider of life insurance, controls gross premiums of over $50m, and has reported a market-leading compound annual growth rate (CAGR) of 26 per cent in premiums between 2013 – 2015.
Despite it’s incredible growth story so far, Enterprise Group is poised to take its bid to deliver quality financial services even further. According to The World Bank, today only 5 per cent of Ghanaian adults have some form of insurance, presenting a viable opportunity for Enterprise to drive financial inclusion apace. Further opportunity comes in the form of pensions. Ghana’s recently liberalised pensions industry is one of the fastest growing in the world, and the country’s retirement industry is set to swell 400% by 2018.
All of this is underpinned by the rapid expansion of the Ghanaian economy, projected to reach 8.7 per cent in 2017.
LeapFrog will apply its deep operational expertise in emerging markets financial services, helping the business increase efficiencies, expand in West Africa, deliver new products, and scale toward new levels of growth and impact.
“We are extremely pleased to enter into this strategic relationship with Enterprise Group,” said Norm Kelly of LeapFrog Investment. “Enterprise Group’s management team has built a robust platform for growth in West Africa. With the capital and expertise of our team behind the business, we are confident that it will scale to provide millions more people with access to essential financial services.”
LeapFrog’s majority investment in Express was, at the time, the largest private foreign investment in Ghana’s insurance industry.
At the time, the company was in difficulty, but LeapFrog saw the opportunity in Ghana’s burgeoning insurance market. The country is one of the fastest growing economies globally, with the life insurance sector alone growing 40% per annum. Yet less than 2% of the country’s 25 million people had access to insurance, offering a compelling opportunity for quality, relevant and affordable products to fill this gap.
LeapFrog set to work, with the objective of restructuring Express and then transforming it from insignificance to a dominant position in the mass-market.
LeapFrog helped Express Life to create a completely new product range: more affordable, better quality, and more relevant to the emerging customer. LeapFrog supported the implementation of a new IT system, enabled customer service improvements and ensured the viability of low-cost insurance policies. Over 350 team members underwent sales and management training, including a large new agency force.
Crucially, LeapFrog promoted connections across the portfolio by introducing Express to BIMA, a dynamic mobile distributor and LeapFrog investment. Read about this partnership here.
When LeapFrog invested, Express had 12,000 clients. Within two years, Express Life had catapulted to 423,000 clients, reaching almost 900,000 people, family members included.
This transformed company attracted the attention of Prudential PLC, who were looking to establish a footprint in Africa. By March 2014, Express – now a healthy and growing company – had been acquired by Prudential PLC. The successful LeapFrog exit was a remarkable demonstration of how profitable investing can go hand-in-hand with deep social impact.