Emerging markets firm LeapFrog has entered a strategic partnership with Asset and Resource Management, Nigeria’s largest non-bank financial company, to grow ARM’s recently acquired CrystaLife into the industry leader in Nigerian life insurance.
The $7.5m investment from LeapFrog – which has previously invested in insurance providers across Ghana, South Africa, Kenya, Uganda and Tanzania – is expected to help CrystaLife to cover life insurance for millions of Nigerians, tapping the vast opportunity of Africa’s emerging consumers.
CrystaLife intends to expand its group life insurance offering and develop a new retail offering, Leapfrog said in a statement today.
“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,” CrystaLife CEO Oluseyi Ifaturoti said in the statement.
“LeapFrog’s extensive experience building insurers in emerging markets will help CrystaLife seize the moment, stimulating significant growth in both value and reach.”
LeapFrog founder Andrew Kuper, pictured, added, “The accelerated growth [of Africa] 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.”
The IMF estimates that real GDP growth in sub-Saharan Africa has averaged 5.4 per cent annually over the past five years.
Foreign direct investment in the continent has grown by more than 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 seven per cent growth for the past decade. With 162 million inhabitants, it is also Africa’s most populous country.
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.
More than 60 per cent of the current retail market in Nigeria is underserved by financial services.
Copyright © 2013 AltAssets