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LeapFrog Investments: Providing Insurance Services in Emerging Markets

SOCAP January 13, 2013

–> Who:  Samantha Duncan, Investment Officer for LeapFrog Investments
–> What: LeapFrog is the world’s first and largest investor in companies that insure underserved people in Africa and Asia.
–> How: Read this synopsis, and learn more about LeapFrog Investments here.
By Adam Smiley Poswolsky
Samantha Duncan was born and raised in Australia, and after getting a business degree from the University of Queensland, worked in the private sector with PricewaterhouseCoopers in operational consulting and with Goldman Sachs in investment banking in health care.  Duncan worked for two years at Goldman Sachs in Sydney, but wanted to find more socially impactful work, and after being inspired by Muhammad Yunus and others, she went to Peru and managed a microfinance credit program.
She found that people who were becoming successful with microcredit still faced with other problems such as inadequate housing, insecurity from being targeted for robberies, and the need for a safe place to deposit their savings.  She learned that while microcredit was immensely valuable to her borrowers, it was not the be all and end all of development, and that not everyone strives to be an entrepreneur. Just as important was providing simple financial and nonfinancial services, and supporting small and medium enterprises (SMEs) that create jobs.  “You need to build out the entire ecosystem—supporting both the entrepreneurs, via their access to credit and other financial services, and supporting the greater customer and SME base—the community and commerce as a whole,” Duncan explained to me at SOCAP.
After Peru, Duncan studied international development at the John Hopkins School of Advanced International Studies, looking at access to finance for small and medium businesses in the developing world, and more broadly at sustainable financing models for development.  Working for the Grassroots Business Fund in India, she gained appreciation for the importance of mobilizing local capital.  “What I learned in India was that there is a lot of interest among Indians to fund Indian-led social businesses—there is great potential to mobilize a local base, and in doing so be involved in promoting sustainable, local-led development” says Duncan.
Duncan then joined LeapFrog Investments, working on LeapFrog’s investments in Southeast Asia, with a particular focus on Indonesia.  LeapFrog invests exclusively in businesses that provide financial safety nets to the world’s next billion emerging market consumers. Its investment portfolio aims to provide top quartile private equity returns while reaching 25 million low-income people underserved by insurance and other financial services beyond credit.  Since insurance is a trust-based product, LeapFrog thinks creatively about ways to best reach low income people, including through partnerships with microfinance institutions and other organizations like co-ops and civil society organizations that already have developed a close working relationship with their low-income clients.
“Microinsurance is distinct from mainstream insurance in that achieving efficiency in distribution and administration is critical to achieving affordable insurance products, so we need to continue to innovate to access and build efficient and effective mechanisms to reach large groups of people,” explains Duncan.  LeapFrog’s first fund raised $135 Million, demonstrating an institutional interest in microinsurance—and potential for financial return while providing insurance services to underserved communities in the developing world.  In just over 3 years, LeapFrog’s portfolio companies have reached over 8 million people, even while taking leaps in operational performance and value.  Says Duncan: “We are demonstrating that you really can have profit and purpose.”
To learn more about LeapFrog, check out leapfroginvest.com
 

 
This article is a part of a series produced at SOCAP12 by New Empire Builders. New Empire Builders is a SOCAP12 media partner.

Impact Investing / Social Entrepreneurship
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