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May 14, 2011

LeapFrog Investment in East African Microinsurer Is the Largest in African History
    by Robert Kropp

The fund invests $14 million in Apollo Investment to provide insurance coverage to 7.9 million self-employed people in Africa. -- LeapFrog Investments, a $135 million investment fund that invests in insurance companies serving consumers in Asia and Africa, recently announced a $14 million investment in the East African insurance group Apollo Investment. The deal is the largest in the history of microinsurance in Africa.

The Microinsurance Network defines microinsurance as "adapting insurance services mainly to clients with low income and no access to mainstream insurance services." In 2010, Swiss Re published a report in which it estimated that the microinsurance industry has the potential of covering up to four billion people and generating $40 billion in income.

According to the press release, Apollo will use the investment to expand insurance coverage to 7.9 million self-employed people in the informal sector.

Commenting on the deal, Anthony Johnson, a partner with Alternative Asset Analysis (AAA), stated, "LeapFrog is a fantastic example of a prosperous socially responsible fund that focuses on investing in insurance firms in Asia and Africa that help as many as 25 million vulnerable people to access insurance services."

AAA is an organization that promotes impact investment as a means of generating returns while helping to improve enterprise in developing countries.

In a press release, Doug Lacey, a LeapFrog partner, stated, "Our aim as a fund is to reach 25 million vulnerable people with affordable insurance generating robust financial returns as well as social impact from serving this untapped market."

In 2009, LeapFrog invested more than $6 million in AllLife, a South African company that provides insurance coverage to people living with HIV and diabetes. Since then, AllLife has reportedly doubled in size, and now provides coverage to 250,000 policyholders and dependents.

Launched with former President Bill Clinton at the annual meeting of the Clinton Global Initiative (CGI) in 2008, LeapFrog invests in businesses that extend and enhance security to the poor and financially excluded. Among its investors is Calvert Investments.

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