At the Clinton Global Initiative Annual Meeting last week in New York City, former President Bill Clinton announced the launch of LeapFrog Investments, the world’s first investment firm to focus on the insurance needs of low-income people.
Its founders say it is also the largest microinsurance initiative in the world.
LeapFrog has committed to invest $100 million over the next 10 years to enable 25 million low income people in Africa and Asia to gain access to affordable, quality insurance and financial services.
“The estimated market size for microinsurance is a billion people. Less than three percent of these people now have any kind of insurance,” President Clinton said. “LeapFrog will enable 25 million low income people to access affordable quality insurance and financial services.”
He said 15 million of the insureds will be women and children.
The key focus regions include India, Pakistan, South Africa, Ghana and Kenya.
“There is a vast unmet demand for insurance globally; the reality for the insurance industry is that growth will come from emerging markets especially — where most of the population is low-income. There is a tremendous opportunity to build profitable and sustainable businesses that at the same time protect low-income people and help them escape devastating poverty,” said Dr. Andrew Kuper, founder and president of LeapFrog Investments
Microinsurance protects poor and vulnerable people by helping them manage diverse risks — to their lives, homes, property, health, crops, and businesses. Without insurance, they find it difficult to recover from shocks, take business risks to increase their income, build assets and thus escape poverty permanently.
Jim Roth, a partner in LeapFrog and one of the pioneers of commercial microinsurance, said, “LeapFrog offers a true synergy between profit and purpose — expanding access to crucial financial services for low income people and helping to alleviate poverty in some the world’s poorest countries.”
Vast Demand for Microinsurance
While more than 150 million low-income people now have access to credit, less than half that number has access to insurance, accoridng to Leapfrog officials. Yet insurance is recognized as critical to escaping poverty permanently — by stabilizing income, enabling people to build assets, and enabling the management of risks in micro-businesses.
LeapFrog’s mission is to tap an estimated one billion person market for microinsurance. Just as leaders such as Muhammad
Yunus and Fazle Abed showed the power of microcredit as an alternative asset class, leading to a flood of funds and firms investing in the space, so the leaders of LeapFrog and their partners have pioneered microinsurance, and are now taking the financing of this industry to the next level.
LeapFrog is supported by global partners including several law firms, actuaries and consultants in financial services, including Akin Gump Strauss Hauer & Feld LLP, Wiley Rein LLP, Attride-Stirling & Woloniecki, Quindiem Consulting, The Microinsurance Centre, Ashoka, and other experienced global consultants.
The firm’s financial supporters include Accion International and individuals such as Goldman Sachs wealth manager Felipe Medina. LeapFrog’s partners have also included development banks such as Germany’s KfW Entwicklungsbank.
Source: LeapFrog Investments