LeapFrog invests over Rs. 2 b for 19% stake in Softlogic Life Insurance

LeapFrog Investments, the leading Profit with Purpose investor, yesterday made a $12 million (over Rs. 2 billion) investment in Softlogic Life Insurance PLC, purchasing the shares of FMO, the Dutch development Bank. 

Softlogic Life, growing at 2x the market, is one of Sri Lanka’s fastest growing life insurers, providing Sri Lankans with individual life and health, group life, and other policies. The main shareholders of the Company will now comprise Softlogic Capital, DEG and LeapFrog Investments.

LeapFrog Investments Founder and CEO Dr Andrew Kuper	Softlogic Group Chairman Ashok Pathirage

“The team, products and high growth of Softlogic Life make for an outstanding company. We are thrilled to see them join the LeapFrog portfolio,” LeapFrog Investments Founder and CEO Dr Andrew Kuper said. 

“This investment reveals our positive view of Sri Lanka’s long-term trajectory, and its financial services industry. The deal also caps the best year of deployment in the history of our firm,” he added.

Softlogic Life, a top five player, has established itself as a leader in providing quality life insurance products to Sri Lankans. The company leads the market in customer-centric product innovation, including tailor-made products such as a worldwide cashless hospital settlement product integrating more than 60 local hospitals, doorstep doctor visits, and medical testing. It was also first-to-market in Sri Lanka in offering life insurance via mobile, through a partnership with Dialog Axiata. The company employs a 2400-person agent force, as well as distributing protection products via banks and direct means. 

“We are excited about the next wave of growth for Softlogic Life, and our ability to continue to accelerate our market-growth strategy in partnership with the LeapFrog team and the insurance and financial services expertise they bring to the table. We are deeply appreciative of FMO’s partnership to build our Company to this strong position and are happy to have provided an excellent return on exiting their investment,” Softlogic Group Chairman Ashok Pathirage said.

“LeapFrog has a reputation for partnering to achieve channel expansion, as well as to help solidify strategic relationships that underscore growth – two continued areas of focus for the Softlogic Life business. We hope that this is the first of many investments in Sri Lanka and with the Softlogic Group,” Pathirage added.

“Sri Lanka presents a compelling investment opportunity, with an underpenetrated, yet high growth insurance market,” LeapFrog Investments Director Fernanda Lima said. “By taking advantage of a diversified distribution strategy, and in particular delivering insurance in partnership with mobile companies and financial institutions, we will be able to increase the reach of relevant products into the country’s emerging consumer segment, who have traditionally been excluded from easy and affordable access to insurance,” she added.

Mobile insurance products significantly open up access to the emerging consumer demographic – people living under $10 USD a day. LeapFrog was an early investor in BIMA, which in only four years grew to become the leading emerging consumer mobile insurer, scaling to over 30 million polices for emerging consumers in only four years. LeapFrog sold the majority of its stake in BIMA as part of a $96.6 million investment to Allianz X, the digital investment unit of Allianz group. 

An innovator in insurance, Softlogic Life was recently selected as one of the Top 3 Insurers in the Asian region by Asian Insurance Review and has won a multitude of accolades. Its strong brand and customer-centric agent force combined with tailor-made products are enabling strong growth.

“FMO has been an investor in Softlogic Life Insurance PLC since December 2012, at that time a small insurance company, combining general and life insurance products. Some of the main reasons to invest were the professional staff, Softlogic Group being a strong shareholder and the company’s approach to introducing innovations in the insurance sector,” FMO Chief Investment Officer Linda Broekhuizen said.

“By making insurance products customer friendly and increasing accessibility, the Softlogic Life team improved financial inclusion in Sri Lanka. We are proud that the company has performed so well that the reputable LeapFrog Investments took over to further guide the company,” she added.

With a population of 21 million, Sri Lanka is currently underserved with life and health insurance products, yet represents a strong growth opportunity with penetration at only 0.6% versus GDP. Between 2012 and 2017, the insurance industry grew at a CAGR of 12% driven by growing awareness of the benefits of insurance, as well as the introduction of new and innovative products to service the market. 

LeapFrog invests in extraordinary businesses in Africa and Asia, partnering with their leaders to achieve leaps of growth, profitability and impact. LeapFrog companies now reach 157.4 million people across 149 countries with healthcare and financial services. Over 130 million of those individuals are emerging consumers, often accessing insurance, savings, pensions, credit and healthcare for the first time. LeapFrog companies have grown on average by nearly 40% per year since LeapFrog’s investment. The companies now provide jobs and livelihoods to over 122,000 people. LeapFrog was recently ranked by Fortune as one of the top five companies changing the world, alongside Apple and Novartis, becoming the first private investment firm ever listed.

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