Leading emerging markets fund LeapFrog Investments today announced a strategic partnership with Nigeria's largest non-bank financial company, Asset and Resource Management Company Limited (ARM). Further to ARM's recent acquisition of a majority stake in CrystaLife Assurance Plc, the partnership's ambitious aim is to make CrystaLife, currently the sixth largest life insurer in Nigeria, the industry leader in Africa's most populous nation.
"Africa's time has come," said LeapFrog founder Dr. Andrew Kuper. "It is the place for investors to find top-tier returns, and make an enormous difference too. The accelerated growth and increased stability over the past ten years is nothing short of phenomenal. The world is just beginning to understand that Africa is home to hundreds of millions of consumers, workers and entrepreneurs. They are actively acquiring products and services, lifting families and nations out of poverty."
LeapFrog's support, drawing on its extensive team of insurance experts and actuaries, is expected to help CrystaLife to cover millions of Nigerians, tapping the vast opportunity of Africa's emerging consumers. CrystaLife intends to expand its successful group life insurance offering and to develop a new retail offering.
The IMF estimates that real GDP growth in sub-Saharan Africa has averaged 5.4% annually over the past five years. Foreign direct investment in the continent has grown by over 20% each year, pushing Africa's share of the world's investment to almost a quarter. Even in this context, Nigeria has been an outperformer at an average 7% growth for the past decade. With 162 million inhabitants, it is also Africa's most populous nation.
McKinsey reports that around 90 million African households had joined the world's consuming classes by 2011, meaning that almost 500 million Africans now have the means to pay for critical financial tools. However, nearly 110 million people in Nigeria alone still lack access to financial services, presenting a significant challenge and opportunity. Over 60% of the current retail market in Nigeria is underserved by vital financial services.
"Nigeria is one of the continent's jewels. We are pleased to have the opportunity to partner with ARM, a reputed and fast-growing leader in financial services in the country" said LeapFrog partner Dominic Liber, who leads the fund's work in Nigeria. In Africa, the fund has previously made investments in insurance providers across Ghana, South Africa, Kenya, Uganda and Tanzania.
Mrs Oluseyi Ifaturoti, CrystaLife Managing Director and CEO concluded: "The market opportunity for insurance in Nigeria has grown rapidly, requiring businesses to rethink product design, pricing, and distribution strategies to effectively reach the increasing pool of potential customers. LeapFrog's extensive experience building insurers in emerging markets will help CrystaLife seize the moment, stimulating significant growth in both value and reach."
Launched in 2008 with President Bill Clinton, LeapFrog Investments recently won the Investor of the Year award from Business Insider and the Sustainable Investor of the Year special commendation award from the Financial Times and IFC.
On the other hand, Asset & Resource Management Company Limited, ARM, is the largest non-bank financial services provider in Nigeria, and has emerged as one of the leading long-term investors in Nigeria, managing assets of $2.5 billion. The ARM Group supplies financial and investment products through Asset Management, which includes pension and non-pension retail, wealth and institutional asset management, and Specialized Funds, which includes private equity, hospitality and retail, infrastructure finance and real estate.
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