- Secures US $ 15mn funding from Finnfund and Norfund
- Inks US $ 15mn financial reinsurance deal with MunichRe
Softlogic Life Insurance PLC, a unit of Softlogic Holdings PLC and the country’s third largest life insurer, yesterday said it finalised two landmark deals to the tune of US $ 30 million (Rs.5.6 billion).
Development financial institutions, Finnish Fund for Industrial Coorporation Ltd (Finnfund) and Norwegian Investment Fund for Developing Countries (Norfund), collectively signed a US $ 15 million Tier II subordinated debt transaction with Softlogic Life, on August 24, 2020.
Norfund and Finnfund are impact investors funded by the Governments of Norway and Finland and private capital markets, whose objectives are to fund sustainable development through responsible and profitable businesses across the globe.
Softlogic Life also concluded a financial reinsurance transaction in March 2020, of US $ 15 million, with MünchenerRückversicherungs-Gesellschaft (MunichRe), one of the top providers of reinsurance, primary insurance and insurance-related risk solutions in the world, based on the top-quality portfolio of the company.
This arrangement is viewed as an innovative market-leading transaction in the South Asian life and health reinsurance arena.
“These investments by Norfund, Finnfund and MunichRe are a testament to the solid work we have put into building Softlogic Life into a formidable business in Sri Lanka’s insurance industry. We like to think of it as an endorsement that we have done something special,” Softlogic Life Insurance PLC Chairman Ashok Pathirage said.
What makes the transactions even more significant is that they are being executed amidst the ongoing COVID-19 pandemic that has impacted the entire world.
Softlogic Life doubled its market share to 16.2 percent as at March 31, 2020. In 2019, Softlogic Life grew by 25 percent, outpacing the industry growth of 11 percent, issuing 247,755 policies and selling the highest number of policies, accounting for 33 percent of the market.
The investment marks one of Norfund and Finnfund’s first investments in Sri Lanka’s insurance industry, where, like in other developing markets across Asia, they will be looking to provide expansion capital to sustainable businesses like Softlogic Life in the financial sector.
“Norfund invests in financial institutions to strengthen their ability to contribute to increased access to capital for companies and previous unbanked people. Softlogic Life is a great fit with our objective to create jobs and improve lives by investing in businesses that drive sustainable development,” said Norfund Regional Director Asia Fay Chetnakarnkul.
“Softlogic Life’s leadership team has over the years consistently delivered and together, we hope to continue contributing to its growth journey. We appreciate the partnership with them and we hope this investment also will contribute to economic growth and increase financial inclusivity in Sri Lanka,” said Finnfund Investment Manager Ulla-Maija Rantapuska.
“MunichRe enjoys a long-standing relationship of over 15 years with Softlogic Life and has introduced a number of product initiatives that have performed well for our partnership. This financial reinsurance transaction heralds the next generation of cooperation where we are pleased to be part of an exciting future,” said MunichRe India Branch Managing Director Life and Health Srinivasa Rao.