The InsuResilience Investment Fund (IIF) has entered into an agreement to acquire a significant minority stake in Lahore-based Asia Insurance, a general insurer offering agriculture insurance to over 100,000 farmers in Pakistan.
Luxembourg-based IIF, set up by the German Development Bank KFW and managed by Swiss-based Impact Investment Manager Blue Orchard Finance, will subscribe to a rights issue in the insurance company for a 25% equity stake post-acquisition, taking the company’s total equity to approximately PKR1.04 billion (US$9.9 million).
The additional funds will help Asia Insurance to grow by increasing the company’s risk capital and supporting its underwriting capacity in agriculture, reported The Nation.
Asia Insurance is a leading player in microinsurance in the agriculture, livestock and farm machinery sectors with approximately 44% of its gross written premium in 2016 generated from these areas.
Mr Ihtsham ul-Haq Qureshi, CEO of Asia Insurance, said: “With InsuResilience Investment Fund’s investment, we will expand our outreach and our range of insurance products for this market with a view to innovative solutions tailored to Pakistan’s needs.”
The IIF, as part of the InsuResilience Initiative of the German G7/G20 presidencies, aims to contribute to the adaption to climate change by improving access to and the use of climate risk insurance in developing countries and emerging economies.
Mr Ernesto Costa, Co-Head of Private Equity at BlueOrchard, said: "Pakistan experiences various natural disasters and consequences of climate change, but has a low level of insurance coverage, leaving a significant part of its low-income population without protection. We are looking forward to partnering with Asia Insurance Company, a leading Pakistani insurance company, to extend the insurance coverage of poor and vulnerable households.”