Kenya: LeapFrog to exit insurance company stake
UK-based global insurance solutions firm, Linkham Group will acquire a stake in Resolution Insurance after agreeing to purchase 100% of the equity holding of private equity impact investment firm, LeapFrog Investments, for an undisclosed sum. The agreement is subject to certain closing conditions, including regulatory approvals in Kenya, and is expected to complete within this quarter.
The Insurance Regulatory Authority (IRA) of Kenya gave a nod to the parties to progress the transaction to completion in a move that will see Resolution Insurance business immediately gain access to Linkham Group’s financial and insurance networks in Africa and across the globe. Linkham Group insurance and reinsurance practices focus on providing innovative products relevant to each of their markets. The investment will give Resolution Insurance customers greater choice, broader availability and better value in a hypercompetitive Kenyan insurance sector at a time when a global health pandemic has put tremendous pressure on health service providers.
Linkham Group, which was founded in 2007 and remains privately owned with operations in South Africa, Mauritius, the UK and Ireland, now finds a foothold into its third market on the continent with the purchase.
Mike Cranfield, Linkham Group CEO, said the company, was excited to enter one of Africa’s very developed insurance sectors at a time of unprecedented challenge for businesses and consumers, emphasising that the entry into a third African market was further evidence of the group’s commitment and investment in Africa and firm belief in the tremendous growth prospects that the continent offers.
“This investment lays the foundations for Resolution Insurance to leverage our global scale, resources, capability and efficiency needed to accelerate its growth and contribute to the economic and social prosperity of Kenyans, insurance service providers, policyholders and the local communities. We will bring our expertise in end to end delivery of insurance solutions to the financial services, airline, broker and card payments sector with leading–edge innovation that will challenge industry norms,” he said.
“Resolution is an attractive investment because of its unique understanding of the local market as a purely Kenyan business founded by a visionary entrepreneur. We want to compliment his passion by pursuing a focused and sustainable growth strategy through our innovative, consumer-centred localised global solutions.”
Resolution Insurance was founded by businessman Peter Nduati in 2002 as a medical insurance provider in Kenya. The company changed its name from Resolution Health to Resolution Insurance in 2013 as it expanded into East Africa. It grew to become a tier two underwriter offering a variety of products from medical plans, travel plans, liability plans, property covers, motor covers and all other classes of general insurance.
“For nearly 20 years, we relied on our local capabilities, heritage and experience to gain the scale, resources and execution capability to operate as a valuable provider of health insurance in Kenya and other East African markets – serving our customers and stakeholders diligently in a sector whose market dynamics continue to be very challenging,” said Resolution Insurance CEO, Peter Nduati.
Nduati said over the past few years, the business environment presented a number of challenges including heightened competition, tight margins, customer affordability challenges and a tough macroeconomic environment and the current Covid-19 global pandemic, all of which put stress on individuals and companies across the board.
“We look forward to benefiting from Linkham Group’s international experience to streamline the services of the Resolution Group, technology transfer, shared IT and insurance-related infrastructure, business processes and enhanced underwriting expertise and network,” he added.
Cranfield said he felt encouraged that Kenya continues to be a regional hub for scores of regional and global enterprises looking to invest in the East African region and saw the Group’s fortunes dovetailing neatly with opportunities to not only to grow their footprint but to make an impact through partnerships with leading indigenous brands that have created employment opportunities for millions of Kenyans.
“The Linkham Group is committed to a long-term engagement in Kenya. This is going to be a marathon for us and not a sprint. We will be looking at growing the brand together, fostering an environment for creation of innovative products and continued development of human capital pipeline to service the business.”
Raimund Snyders, a partner at LeapFrog Investments said, “Since first investing in Resolution Insurance in January 2015, we have worked with their team to drive commercial strategies to scale the growth and impact of the company at a period when the insurance sector faced severe challenges. We see this as an appropriate significant development in enabling Resolution Insurance to optimise the opportunities presented by an investor with sector specific expertise across Africa and mature European markets. We believe the platform we created over the past five years is strong enough for its future growth. The completion of this transaction is great news for our investors and all local stakeholders.”
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