Shriram

From a no-frills office behind one of the many bustling, palm-lined streets of Chennai, India’s jewel of the South, the Shriram Group began its story.

Founded in 1974, Shriram has grown to become one of India’s most respected and trusted business houses, serving the mass-market with essential services. It is a business that can convincingly claim that “the bottom of the pyramid is the top of our agenda” and has been for 40 years.

In 2011, LeapFrog invested in a Shriram subsidiary, Shriram CCL, a distribution group offering unique access to the consumer growth story across India.

Shriram stands out for its deep integrity, community-based business model, committed management team, and emphasis on the importance of long-term strategy over short-term wins. It’s there for the long haul. This is perhaps one reason it reaches 7 million people with insurance and savings today, of which 5 million are low income.

For many of its customers, Shriram CCL is also one of the first points of contact they have with the formal financial system. The company reaches people through a smart and low-cost distribution strategy, using large agency forces in local villages. It sells into traditional ‘Chit’ programs – or rotating credit and saving schemes – as well as direct to new customers in towns and villages across the country’s mind-stirring canvas.

Says G.S. Sundararajan, Managing Director of Shriram Capital, “Our strategic partnership with LeapFrog is redefining financial inclusion in India.”

In 2017, LeapFrog successfully exited its investment in Shriram CCL, after significant value-add and impact.

Petra Trust

Ghana’s recently liberalised pensions industry is one of the fastest growing in the world. LeapFrog’s investment in 2014 was predicated on the shifting financial services landscape of Ghana – at the time of investment, only 19 percent of the population had ever used a formal savings product. Investing in Petra Trust was a recognition of the market potential as much as it was a vote of confidence in Petra’s dynamic leadership team.

The Petra team has a long shared history: Co-founders Kofi Fynn and Chris Hammond, and Head of Operations Helena Poku were school friends before studying in the US, at Harvard and MIT. Later they returned home to Ghana to start Petra, inspired by the social need for pensions, and the market opportunity this represented.

Launched in 2011, Petra was the first trustee approved and licensed by Ghana’s National Pensions Regulatory Authority in 2012. Today Petra is the largest independent pensions trustee in Ghana, and one of the two largest by assets under management.

Petra has benefited from LeapFrog’s support in consumer research, marketing, governance and strategy and IT infrastructure.

Kofi Fynn, Managing Director, said, “In partnership with LeapFrog, we have made key changes to the business, including introducing a world-class governance structure, diversifying our product offering, and opening up access to high quality, affordable savings for Ghanaians. Our work together has set the foundations for the provision of financial security for millions of emerging consumers in Ghana.”

The LeapFrog and Petra team rapidly grew the business into the leading independent pensions trustee in Ghana with over 1.4bn GHS (USD 310m) in assets under management (AUM). The company has achieved average annual revenue growth of 76 percent across the period of investment. LeapFrog successfully exited in 2018.

Mahindra Insurance Brokers

Back in 2009, when the Mahindra Group invited LeapFrog to invest in its Mahindra Insurance subsidiary, it was for two principle reasons: the insurance expertise LeapFrog would bring, and the shared ethos of the two organisations. Mahindra’s “Rise” philosophy, focused on building prosperity and improving lives, chimed perfectly with LeapFrog’s Profit with Purpose investment philosophy.

As Anand Mahindra, the Chairman of Mahindra Group, and world-leading businessman, put it at the time, “This partnership is a perfect alignment between our philosophy of driving positive change and LeapFrog’s socially conscious investment strategy. Together we will provide financial services that protect and enable millions of people to secure their future.”

Insurance penetration among India’s vast population remains extremely low, at 3.4% for life insurance and 0.7% for general insurance, indicative of a tremendous opportunity for growth and impact.

Mahindra Insurance is a fast-growing, high-impact company providing life, motor and health insurance. With a wide reach across rural and semi-rural India, it has a footprint in over 170,000 of India’s 650,000 villages. Mahindra Insurance currently reaches 10 million people with insurance, including 6.5 million low income consumers. The company offers insurance products for as little as $1 per month. With over 850 million people living in rural India, this is still just the beginning.

LeapFrog’s insurance expertise in this market has proved important in areas such as product development, digital and mobile strategy and market research. In fact, the Mahindra-LeapFrog partnership began with a health insurance product which has reached 550,000 people via 110,000 low income policy holders.

LeapFrog successfully exited Mahindra to XL Group in 2017 after significant value-add and impact.

Express Life

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.

ARM Life

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.

Apollo

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.

AllLife

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.”

BIMA

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 UG agents registering cutsomers-2

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.