MICROCAPITAL BRIEF: BlueOrchard Executes IIF Equity Buy into Forte Insurance to Boost Agricultural Microinsurance in Cambodia

Switzerland’s BlueOrchard Finance recently disbursed an equity placement of undisclosed size from the InsuResilience Investment Fund (IIF), a Luxembourg-domiciled public-private partnership, for IIF to buy a minority stake in Cambodia’s Forte Insurance Group. BlueOrchard’s investment director for the continent, Thibaud Ponchon, expressed confidence that the placement will “drive the penetration of agriculture insurance products in Cambodia and enhance the adaptation of people with low and middle income to climate change.” IIF will control one seat on Forte’s Board of Directors. With this agreement, BlueOrchard has deployed all of the funding IIF has raised to date.

Founded in 1999, Forte operates in Cambodia and Laos, offering coverages such as life, health, vehicle and property insurance. For farmers, the firm sells weather index insurance, which pays out when weather conditions exceed or fail to reach preestablished thresholds, such as amount of rainfall during a particular crop’s season. Financial data on the firm are not publicly available.

Launched in 2015 and focused on developing countries, IIF is dedicated to increasing access for low-income households as well as micro-, small and medium-sized enterprises to financial services that increase their resilience to climate change. As of March 2022, IIF has invested debt and equity in a total of 27 companies on four continents. The fund is managed by BlueOrchard, a member of the UK-based Schroders Group. IIF was launched at the behest of the German government. As of 2020, IIF used a blended finance model, combining private and public investment through: (1) IIF Debt Sub-fund, which had USD 150 million in assets, providing private debt financing to aggregators and microfinance institutions; and (2) IIF Equity Sub-fund, which had assets valued at USD 80 million, placing equity in insurance companies as well as data and software providers

Since its inception in 2001 through 2021, BlueOrchard invested in 637 institutions in 93 countries. Of the clients served, 80 percent were women, two thirds live in rural areas and 130,000 were students and educational institutions. The total amount disbursed included USD 8 billion in private debt.

By Hasnat Aslam, Research Associates

Sources and Additional Resources

BlueOrchard press release
https://www.blueorchard.com/blueorchard-managed-insuresilience-investment-fund-invests-in-cambodias-largest-insurance-firm/

Forte homepage
https://www.forteinsurance.com/

IIF homepage
https://www.insuresilienceinvestment.fund/

BlueOrchard homepage
https://www.blueorchard.com/

Forte-Toko homepage
https://www.fortetoko.com/

Previous MicroCapital story on IIF
https://www.microcapital.org/microcapital-brief-insuresilience-investment-fund-acquires-40-equity-stake-in-ghana-based-insurance-company-vanguard/

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