LeapFrog to acquire stake in Ghanaian insurance firm Express Life with $5.5m investment
LeapFrog Investments, a global impact investing funds company, on Tuesday announced its largest ever private foreign investment in the history of Ghana’s insurance industry.
The $5.5 million investment will allow LeapFrog to acquire a majority stake in Express Life Insurance Company, a Ghanaian insurance firm founded by Obed Kweku Danquah, Executive Chairman of Express Group of Companies.
Express Life Insurance market share below one percent market share in the country is expected to increase significantly with the injection and also meet the new minimum capital requirement of one million dollars for insurance firms in Ghana.
It will also pave way for Express Life to draw on LeapFrog’s capital and distinctive operational expertise to become the market leader in serving the large untapped market of low-income consumers in Ghana.
Briefing the media in Accra Mr Doug Lacey, Head of LeapFrog’s operation in Africa praised Ghana’s economic performance and said the decision to invest stemmed from the country’s macroeconomic achievements that had created a good climate for businesses to thrive.
The name Express Life Insurance would not change, Mr Lacey said because the Ghanaian company had brand equity in the market they believed must be maintained.
Life insurance industry has grown at about 40 percent annually and Lacey believes that there are still great opportunities in the industry because the vast majority of 25 million Ghananians do not have access to insurance.
“Our intension is to grow the business (Express Insurance business) in Ghana to the level an Initial Public Offer will be an option in the Ghanaian capital market,” Lacey said.
Through Express, LeapFrog aims to empower over 500,000 Ghanaians with financial safety nets and springboards to a better life.
Express Life Insurance Chief Executive Mr Obed Danquah said LeapFrog was bringing both capital and expertise to Express and that his company believes in building mergers and buy backs. Express hope to buy back what it had sold out in future.
A recent World Bank report titled: “De-Fragmenting Africa: Deepening Regional Trade Integration in Goods and Services,” described Ghana’s insurance companies and others within the West African Monetary Zone (WAMZ) as inefficient.
It identified only one company within the entire WAMZ region, Nigeria’s NICON that has a gross premium base in excess of $100 million.
The report, however, noted that insurance regulatory supervisors in Ghana and Nigeria are best staffed and equipped.
Source: GNA