Significant demand for insurance exists in emerging markets where there is limited competition, high demand for simple and low-cost products and proven examples of profitability. Microfinance has demonstrated that successful businesses can be built on affordable and relevant products, delivered through efficient and innovative distribution channels to millions of low-income people.
Hollard-Edcon in South Africa is a joint venture between Africa's largest privately held insurer and a retailer whose 430 stores sell items like clothing and (now) 'insurance in a box' to low-income people. Stores provide a point-of-sale and collect premiums. Within 4 years, the venture achieved annual growth of 23% and annual profits of over $41 million.*
AIG Uganda, a private insurance company that is part of AIG Inc, launched its first microinsurance product in 1997. It has since grown to distribute products through 26 MFIs, including in Tanzania and in Malawi. It offers group products with disability, accidental death and credit life benefits. Within 6 years, AIG Uganda covered 1.6 million people.**
sources: *Roth & Chamberlain, 2006 **McCord, Botero, & McCord, 2005
Inspired by these stories and successes, LeapFrog is devoted to a simple but powerful goal:
Generating commercially sustainable social impact.
