LeapFrog Investments, an international for-profit microinsurance fund, recently announced that it had raised an additional USD 65 million in commitments, bringing the fund’s total to USD 112 million. The new investors in the fund include the International Finance Corporation (IFC), the lending arm of the World Bank, which committed USD 20 million; Flagstone Reinsurance, a global reinsurer based in Bermuda, which committed USD 12 million; the Soros Economic Development Fund, a nonprofit foundation that aims to alleviate poverty, which contributed USD 7 million; and KfW Bankengruppe, a German development finance institution, and the German government’s Ministry for Economic Cooperation and Development, which committed a combined USD 26 million. This funding, combined with USD 47 million raised by LeapFrog in 2009, totals USD 112 million, which exceeded LeapFrog’s target of USD 100 million.

A LeapFrog press release indicates that the global market for microinsurance includes 1.5 billion potential customers. LeapFrog intends to invest in innovative microinsurance companies that will be able to expand rapidly to fulfill this demand. For example, LeapFrog has already invested USD 6 million in a South African life insurer that profitably insures clients with HIV by helping its clients manage their health.

About LeapFrog Investments

LeapFrog Investments was founded in 2007 by Dr. Andrew Kuper. It is a for-profit, private equity fund aimed at earning large returns by investing in and supporting microinsurance initiatives. The fund had raised a total of USD 112 million as of March 2010. The fund focuses on ventures in Africa and Asia, with initial target countries including South Africa, Kenya, Ghana, India, Indonesia, Pakistan and the Philippines.

About the International Finance Corporation (IFC)

The International Finance Corporation (IFC) is a member of the World Bank Group, created to support financial private sector development, mobilize private capital and provide advisory and risk mitigation services to businesses. It uses loan and debt securities, equity investments and guarantees as instruments of poverty alleviation. It invests in financial institutions in emerging markets as well as provides technical assistance. IFC has 182 member countries that collectively determine its policies and approve investments. In 2009, IFC made new investments in developing countries that reached a total of USD 14.5 billion.

By Eric McKay, Research Assistant

Bibliography

[1] LeapFrog Investments Press Release, “LeapFrog Poised to Invest $112 Million in Insurance and Microfinance Companies, After Historic Commitments by IFC, KfW, Flagstone and Soros”, March 29, 2010, http://www.leapfroginvest.com/uploads/100329GlobalPressRelease-Final.pdf

Additional Links

MicroCapital Universe: LeapFrog Investments: http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=LeapFrog+Investments

MicroCapital Universe: International Finance Corporation: http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=International+Finance+Corporation+%28IFC%29