InsuResilience Investment Fund (“IIF”) has acquired 39.25 percent equity stake in Royal Exchange General Insurance Company Limited (“REGIC”), Nigeria’s foremost insurer.
The InsuResilience Investment Fund (IIF) promotes the development of climate risk insurance products by providing debt and equity, along with technical assistance, to qualified insurers, re-insurers and companies in the insurance value-chain in developing countries.
The specific objective of the fund is to reduce the vulnerability of micro, small and medium enterprises (MSME), as well as low-income households, to extreme weather events. Currently, there are two investments in Africa, five in Latin America, one in Central Asia, and one global investment.
With this investment, Royal Exchange General will be making a strong incursion into agric insurance, and this will happen soonest, a source in the company said.
The announcement of the acquisition was communicated to the Nigerian Stock Exchange Thursday, informing shareholders and the investing public that the investment has been approved by the regulator of REGIC, the National Insurance Commission.
Through its activities, the IIF is expected to reach out to more than 1 million Nigerian farmers by 2025.
REGIC, a subsidiary of Royal Exchange Plc, is a leading player in agriculture insurance. The proceeds of the investment will help REGIC to spur growth by increasing its risk capital and supporting its underwriting capacity in agriculture, hereby extending its outreach to low income farmers.
“The history, team and commitment of REGIC to agriculture insurance make it a great addition to our portfolio. REGIC is uniquely positioned to capture the opportunity presented by 30 million under insured small scale farmers in Nigeria. We are thrilled to partner with and support REGIC with capital, technical assistance and our international network in the agriculture insurance space, with the objective to increase the resilience of small scale farmers to climate change“, says Ernesto Costa, senior vice-president, Private Equity at BlueOrchard.
“REGIC has entered into strategic alliances with various stakeholders in the agricultural space to drive insurance within that sector of the economy.”
Kenny Ezenwani Odogwu, chairman of Royal Exchange Plc said agriculture and retail insurance, we believe is the future of insurance and at Royal Exchange, we will continue to develop products and services to ensure that we remain relevant in this space.
“REGIC is determined to take advantage of growth initiatives available in the industry, while leveraging on technology to expand its revenue base and stronger bottom-line”.
Ernst & Young Nigeria acted as the exclusive financial due diligence advisors to both IIF and REGIC for this transaction. Udo Udoma & Belo-Osagie acted as the exclusive legal advisor to IIF while Sefton Fross acted as legal advisor to REGIC.
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