Now ADC sells stake in Resolution Health

The African Development Corporation has sold out of Resolution Health EA, less than four years after investing in the insurer.

ADC exited by selling its stake to a consortium led by Resolution Health founder Peter Nduati and backed by LeapFrog Investments, which becomes the health insurer’s majority shareholder.

ADC bought into Resolution Health in December 2010.

The deal will see LeapFrog invest Sh1.68 billion for the majority stake in Resolution Insurance.

“In a short time, Resolution has grown to become Kenya’s fourth largest health insurer and positioned itself as a rising star in East Africa. Our investment positions Resolution to take the next leap in its growth, and we look forward to working with them to expand their reach in health insurance and beyond.” LeapFrog partner Dominic Liber said.

LeapFrog will be making a re-entry in Kenya’s insurance market after last month’s sale of its stake in Apollo Investments.

LeapFrog is the world’s largest dedicated private equity investor in emerging markets’ financial services, largely backed by controversial American billionaires George Soros and JP Morgan.

STRONG TRACK RECORD

Resolution Health East Africa is a general insurer with operations in Kenya and Tanzania, and in partnership with IAA-Resolution in Uganda.  

Resolution CEO Peter Nduati said a strong track record in health insurance, and the consumer expertise of LeapFrog, would add value and enhance financial inclusion.

He said insurance in East Africa has high potential, estimated to be ($2 billion) Sh180 billion worth.

Some growing areas include non-life insurance market, which is increasing at 20 per cent per year propelled by a robust health insurance sector that is expanding at 38 per cent per year.

EXTEND ACCESS TO HEALTH

Mr Nduati said there was an opportunity to extend access to health and diversified insurance to millions of low-income emerging consumers across East Africa, leveraging on Kenya’s strategic position as a regional leader.

LeapFrog also has investments in insurance underwriters and distributors in countries such as Ghana, Nigeria, South Africa and India. Its portfolio of companies currently reaches over 22 million people across 16 countries.

The firm recently raised ($400 million) Sh36 billion for investing in financial services businesses in Africa and Asia. Some ($100 million) Sh9 billion is earmarked for investment in East Africa.