LeapFrog to Acquire Majority Stake in Resolution Insurance

...Tapping into East Africa's Rapid Health Insurance Growth

  • LeapFrog Investments and Resolution Insurance today announce that LeapFrog intends to invest KSh 1.68 billion (US$18.7million) for a majority stake in Resolution Insurance, through its holding company, Resolution Health East Africa Limited
  • RHEAL is the holding company for leading East African general insurer Resolution Insurance with operations in Kenya and Tanzania and in partnership with IAA-Resolution in Uganda
  • Kenya's non-life insurance market is growing at 20 percent per annum, with health insurance leading the charge at 38 percent. Resolution is strongly placed to capture much of this growth.
  • LeapFrog's expertise will give further drive to Resolution's broader growth strategy, facilitating the delivery of diversified insurance to emerging consumers and businesses in East Africa.

Nairobi, Kenya November 20, 2014 LeapFrog Investments and Resolution Insurance, have today announced that LeapFrog intends to invest KSh 1.68b ($US18.7m) for a majority stake in Resolution Insurance, though its holding company, Resolution Health East Africa Limited.

LeapFrog Investments is the world's largest dedicated private equity investor in emerging markets financial services. Resolution Health East Africa Limited is the holding company for leading East African general insurer Resolution Insurance with operations in Kenya and Tanzania and in partnership with IAA-Resolution in Uganda.

LeapFrog partner Dominic Liber said: "Resolution is a strong and growing business, with an exceptional management team. In a short time, Resolution has grown to become Kenya's fourth largest health insurer and positioned itself as a rising star in East Africa's fast-expanding health insurance space. Our investment positions Resolution to take the next leap in its growth, and we look forward to working with them to expand their reach in health insurance and beyond."

Resolution CEO, Peter Nduati, said "We are excited to partner with LeapFrog for our next stage of growth. 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."

Insurance in East Africa is a high potential market, estimated to be a KSh 180 billion (US$2 billion) opportunity. In particular, the Kenyan non-life insurance market is growing rapidly at 20 percent per annum, fuelled by a robust health insurance sector expanding at 38 percent per year. There is a major opportunity to extend access to health and diversified insurance to millions of low-income emerging consumers across East Africa, leveraging Kenya's strategic position as a regional leader and gateway in.

Said Liber, "East Africa is home to a 150 million strong population with insurance penetration rates below 4 percent, creating a vast opportunity to deliver financial inclusion at scale. Investing in businesses like Resolution enable us to continue contributing to the development of enduring institutions that serve the people of East Africa."

The deal, which is undergoing final regulatory processes, marks LeapFrog's second investment in Kenya; in October it announced the sale of its stake in Apollo Investments Limited, one of the top three regional insurers in East Africa, to Swiss Re.

The investment in Resolution reflects LeapFrog's ongoing commitment to East Africa as an attractive investment destination. LeapFrog recently raised a new KSh 36 billion (US$400 million) fund for investing in financial services businesses in Africa and Asia. Up to KSh 9 billion (US$100million) of this fund is earmarked for investment in East Africa.

LeapFrog also has investments in insurance underwriters and distributors in countries such as Ghana, Nigeria, South Africa and India. The group's portfolio of companies currently reaches over 22 million people across 16 countries.

About LeapFrog Investments
LeapFrog Investments is a specialist investor in emerging markets financial services, seizing the growth opportunity presented by two billion emerging consumers in Africa and Asia. LeapFrog's portfolio companies currently provide insurance, savings and pensions products in countries such as India, Indonesia, Sri Lanka, the Philippines, Ghana, Kenya, Nigeria and South Africa. A pioneer in Profit with Purpose investment, the LeapFrog team draws on decades of operational experience to identify and help build extraordinary companies that deliver top-tier financial and social returns. Today, LeapFrog's partner companies serve 22.7 million people across 16 countries. For more information please visit www.leapfroginvest.com or follow LeapFrog on Twitter @LeapFrogInvest.

About Resolution Insurance
Resolution Health East Africa Limited entered the Kenyan market in 2002 and was the first company to be registered as a Medical Insurance Provider (MIP) under the new Insurance Act. Today, it is the holding company of Resolution Insurance in Kenya, Resolution Insurance in Tanzania and in partnership as IAA-Resolution in Uganda. Resolution Insurance Kenya was licensed as a General Insurer by the Insurance Regulatory Authority (IRA) in 2013. They are licensed to provide Personal Accident, Workmen's Compensation, Liability, Medical and Miscellaneous classes of General Insurance Business.

Over the last 10 years Medical Insurance has been the core product. The general insurer partners with a strong network of 800 Medical Service Providers including hospitals, clinics and pharmacies across this region to deliver quality medical services to the members. It currently manages the medical expectations of over 60,000 members including corporate, social groups, families and individuals. Medical Insurance remains Resolution Insurance's main business and is also a one-stop shop for Employee Benefits with flagship products targeted at corporate organizations, namely Work Injury Benefits Act (WIBA), WIBA Plus, Employers Liability and Group Personal Accident Cover (GPA).

It also offers Personal Accident Cover to individuals and families. Resolution Insurance has partnered with multi-national travel insurance expert Linkham Services to offer Resolution Travel Insurance to cater for persons travelling for leisure, business or study. Resolution Travel Plans are delivered on a fully automated web platform. They offer seven plans that have local, regional, Schengen countries and worldwide cover options.

Media Contacts:
LeapFrog Investments
James Dray (UK)
Brunswick Group
+44 20 7404 5959

Nic Bennett (SA)
Brunswick Group
+27 71 422401

Resolution Insurance
Wanjiku Gitau
Resolution Insurance
+254 722 771 905
email: wgitau@resolution.co.ke