Prudential Financial to Invest $350 Million in African Insurers

Prudential Financial Inc. has committed $350 million to invest in life insurers in Africa, the continent with the fastest-growing population.

The funds will be managed by LeapFrog Investments, a private-equity firm with offices in London and Sydney that was founded in 2008 to invest in financial-services companies in emerging markets.

Prudential Financial previously contributed to a $400 million fund that LeapFrog raised from multiple investors to buy stakes in companies from Africa to Asia. The new partnership will target majority stakes in large life-insurance companies in Ghana, Kenya, Nigeria and other countries. Prudential Financial will have the option to buy the companies from the fund, LeapFrog cofounder Jim Roth said in an interview.

"The potential targets are the large, established life insurers in Africa," Mr. Roth said. The partnership will target acquisitions worth as much as $200 million, he said.

Global insurers are seeking ways to expand in Sub-Saharan Africa as the rapidly growing population, rising incomes and new technology make the market more attractive, according to a recent report by consulting firm EY. Annual insurance premium growth is expected to reach 10% in Nigeria, 9% in Ghana and 6% in Kenya through 2018, according to EY.

American International Group Inc., MetLife Inc., Swiss Re AG and France's Axa SA have also invested in LeapFrog's previous funds.

LeapFrog is planning to raise a new fund of between $800 million and $1 billion from investors. The U.S.'s Overseas Private Investment Corp. has agreed to invest as much as $200 million in the fund.

LeapFrog says it aims to create a positive social impact as well as a financial return from its investments by providing financial services to people who often don't have access to them.

More than 36 million people reached by companies in which it has invested in are so-called emerging consumers who earn less than $10 a day. Most of these people are accessing insurance, savings, pensions or credit for the first time, according to LeapFrog.

Write to Simon Clark at [e-mail]

(END) Dow Jones Newswires

January 22, 2016 08:55 ET (13:55 GMT)

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