LeapFrog Investments, the world’s first micro-insurance focused-private equity fund, is looking at investing $30

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million in Indian microinsurance companies. According to Jim Roth, principal, investments, South Asia, for the company, the $112 million fund is banking on a two-fold rise in the Indian micro-insurance market over the next

four years.

“We are looking at equity exposure in a micro-insurance distribution company in India,” Roth told Financial Chronicle. According to Roth, LeapFrog has not identified potential investee companies. “We have just raised the money and now are on the look out for investment opportunities,” Roth added. The fund has been investing in businesses that deliver affordable insurance. The focus has been on emerging markets in Asia and Africa. “India is one of the priority countries for the fund, where LeapFrog would seek to invest up to

Rs 138 crore,” a company statement said.

Institutions such as International Finance Corporation, part of the World Bank Group, have committed Rs 92 crore ($20 million) for the LeapFrog fund. The board of Soros Economic Development Fund approved an investment of Rs 32 crore ($7 million). Flagstone Reinsurance, a global reinsurer, committed Rs 55 crore ($12 million). The largest commitment of Rs 115 crore ($25 million) was announced by KfW Entwicklungsbank and BMZ, the German Federal Ministry for Economic Cooperation and Development.

At present, there are 24 microinsurance plans registered with the Insurance Regulatory and Development Authority (Irda) from 15 life insurance companies. Yet there is a huge growth opportunity because only 5 million people — or only 2 per cent of the poor, have micro-insurance.

Over the next four years, the fund hopes to make a number of individual investments of between Rs 23 crore and Rs 69 crore each ($5 million to $15 million) and partner with local insurance companies, microinsurers, or businesses with significant distribution platforms that reach the mass market.