Resolution Insurance

Resolution Insurance is Kenya’s fourth largest health insurer and a rising star in East Africa’s fast-expanding general insurance markets.

Entering the Kenyan market in 2002, Resolution was the first company to be registered as a Medical Insurance Provider. In a short time, the company grew to become a leading health insurer and a highly trusted brand, under the stewardship of an exceptional management team and entrepreneurial CEO, Peter Nduati. Today, the Resolution Group comprises Resolution Insurance in Kenya, Resolution Insurance in Tanzania and IAA-Resolution in Uganda, a partnership with IAA.

The company partners with a robust network of 800 medical service providers across East Africa, managing the diversified health insurance needs of corporates, social groups, families and individuals.

It has carved out a niche in serving the SME sector, reaching almost 50,000 emerging consumers though provision of health insurance to employees of SMEs and individual retail clients. LeapFrog’s actuarial and subject-matter experts are working with Resolution to develop new products, to stretch into broader general insurance lines, to grow its distribution network, and to strengthen its team and capabilities.

Says Peter Nduati, Resolution CEO, “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.”

Syn Mun Kong (SMK)

In emerging markets, much attention is paid to the phenomenon of the mushrooming metropolis. In reality though, the economic need of those who remain in the rural areas is even more pressing. Not only are incomes lower, but rural people are very difficult to reach with essential services.

One company that is proving its ability to reach this market is Thailand’s Syn Mun Kong Insurance Public Company Ltd (SMK), the country’s second-largest motor insurer and fifth largest general insurer. SMK is one of the most distinguished and trusted names in Thailand’s insurance industry.

The company has built extensive and diverse distribution into rural and semi-urban regions of Thailand, and reaches 7.5 million emerging consumers via 2.8 million customers. The operation is run by the highly regarded Dusdeesurapoj family.

Thailand is home to a population of over 62 million people, with 41% currently low income and underserved by financial services. Investing alongside Lombard Investments (Thailand’s outstanding private equity firm) LeapFrog has created an innovative partnership that will combine Lombard’s local market know-how with LeapFrog’s operational expertise in emerging markets insurance.

Reliance Capital Management

The world’s fourth most populous nation, Indonesia’s emerging middle class alone is expected to grow to 140 million in the next 10 years. With exceptionally low insurance penetration (2.1% of GDP) and only 36% of adults with a bank account, the need for financial inclusion is great.

LeapFrog’s investment in Reliance Capital Management is aimed precisely at meeting this social need and business opportunity. A home-grown company, Reliance intends to become the financial supermarket for Indonesia’s mass-market. Founded by entrepreneur Anton Budidjaja, the group includes Indonesia’s fourth largest group health insurer, a fast growing life and general insurer insurance operations, and a listed retail-focused securities arm.

Reliance currently reaches over 4.4 million people via almost 900,000 customers across the country, with deep reach into rural areas and a trusted brand name. The company recently acquired a stake in Bank Kesejahteraan Ekonomi (BKE), a general bank with a focus on financial inclusion, giving it potential to reach a further 2 million addressable customers via cooperative relationships.

LeapFrog led this co-investment with FMO and PartnerRe, creating a partnership that will inject strategic capital and diverse skillsets to help boost Reliance’s reach to millions across the country.

Says Anton, “There is a real need for Indonesia to grow its financial services sector. LeapFrog, FMO and PartnerRe are here to help us grow, and to make an increasing contribution to the industry.”

Magma Fincorp

Magma, a trusted Indian financial services group, helps its customers to “invest in even the smallest dream”. It is currently making more than 650,000 dreams come true across India.

The company reaches emerging consumers across rural and semi-urban India with vehicle finance, housing finance and general insurance. Led by an outstanding entrepreneurial team, Magma is delivering on its original vision: to bring financial services to the unbanked in some of India’s poorest regions. The majority of customers are experiencing formal financial services for the first time.

Rural India represents an enormous market opportunity with a population of over 850 million people, roughly two-thirds of the country’s total population. Two out of five rural households rely on informal credit sources or local money-lenders that often charge usurious interest rates. Within that market, the ‘self-employed’ borrower segment is highly attractive; this group of striving entrepreneurs has generally been overlooked by non-banking financial companies but represents an exciting business opportunity to serve pent-up demand with formal financial services..

Magma is well placed in the non-banking financial services market, with its robust rural distribution network and a large and loyal customer base.

Both LeapFrog and Magma see tremendous opportunity to drive value creation through operational improvements and expansion, in both the lending business and the insurance business. This includes areas such as distribution, product design, and health insurance.

Northern Arc Capital (formerly IFMR Capital)

In India the formal financial services sector has made minuscule inroads into the potential market. Smaller enterprises constitute 99% of all companies and contribute to 30% of GDP, but they lack formal access to finance, with 80% currently self-financed.

A company that is challenging this status quo is LeapFrog investment Northern Arc Capital (formerly IFMR Capital) a non-banking finance corporation. Northern Arc is a dynamic link between debt capital markets and high-quality debt originators who are the last mile link to individuals and businesses that traditionally face challenges in access to finance.

Northern Arc provides efficient and reliable access to debt for such lenders across India, in turn enabling a steady supply of finance for financially excluded families and businesses.

Since inception in 2008, the company has partnered with more than 140 institutions to impact the lives of over 33 million customers across 29 states and 540 districts across of India. The company has enabled debt financing of USD 7 billion across sectors like microfinance, small business loans, affordable housing finance, vehicle finance and agri-finance. It has structured and executed over 400 transactions which have been placed with over 120 investors.

Northern Arc uses a variety of structures to provide financing to its clients, including direct loans, securitization, guarantees, arrangement and placement of commercial paper, bonds, debentures, and other capital markets products. It invests in the debt of its originators ensuring skin-in-the-game. Northern Arc developed and launched the world’s first Multi-Originator Securitization for micro-loans and listed India’s first securitised debt instruments on the BSE. It recently introduced a fund advisory and management platform and India’s first rated (AA) financial inclusion debt fund as a Category I AIF, backed by leading insurance companies, a bank and private wealth investors.

Northern Arc also provides rating enhancement advisory services and helps originators to build better operations, oversight and customer protection. The result? End-borrowers receive quality products and services, providing the very foundation of trust.

This trust works its way back into the capital markets. Northern Arc’s robust risk management systems at the grass roots ensure strong risk-adjusted returns for investors, and an A+ credit rating for the entity.

Northern Arc Capital CEO Kshama Fernandes speaking about the reach and impact of Northern Arc, says “Northern Arc stands for access, change, freedom, growth and prosperity for all. We are the frontier that spans across the world of finance – from those who have little or no access to finance to those who have it in abundance.”

Jumo

Jumo is a disruptive fintech business that is rapidly reshaping how ethical financial products reach consumers and SMEs in emerging markets. Its mission is to build and operate inclusive digital banking marketplaces to advance financial inclusion for the 80 per cent of the world’s population who are excluded or underserved by traditional financial services.

Advancing inclusive access to and usage of affordable formal financial services is vital to promoting vital financial health, economic empowerment, financial stability and sustainable growth. Yet emerging markets have negligible penetration of formal financial services: savings is chronically underdeveloped and the majority of the world’s 2 billion unbanked adults are found in low- and middle-income emerging markets.

By contrast, digital and mobile network operators offer highways into these markets – a road that JUMO is traveling at high speed. By creating a customer-centric platform that enables the distribution of leading-edge financial offerings instantly and on-mobile, JUMO is generating access at an unprecedented rate. So far JUMO has analysed more than 33 terabytes of data to serve more than nine million customers in seven countries across Africa and Asia, including Tanzania, Kenya, Uganda, Ghana, Zambia and Pakistan. 100% of its customers are estimated to be low-income, earning less than $10 per day PPP, and approximately 80% have never interacted with formal financial offerings before using the platform. The company has extensive expansion plans for both Africa and now Asia, with CEO and Founder, Andrew Watkins-Ball having relocated to Singapore to drive expansion.

As an investor partner, LeapFrog’s financial services expertise is being used for product design and multi-country rollouts, to turbocharge Jumo’s growth and spur financial inclusion across Africa.

In 2017 Jumo won the MasterCard Foundation’s third annual Clients at the Centre Prize. The US$150,000 prize recognises the innovative work of the South African-based company as a large-scale, low-cost financial services marketplace that serves low-income people.