IFC makes record investment in insurance industry

MANILA, Philippines - The International Finance Corp. (IFC), a member of the World Bank Group, has invested up to $100 million in Barbados-based Sagicor Financial Corp.

The transaction is IFC’s largest-ever in the insurance sector and will consist an investment of up to $20 million in common shares, or about a four-percent stake in Sagicor, and up to $80 million in convertible and redeemable preference shares.

“It was done to bolster market confidence in the insurance industry and to expand insurance services in the Caribbean,” it said in a statement.

The investment demonstrates confidence in the long-term future of the Caribbean insurance industry, following several market failures and a tightening of credit arising from the 2008 global economic crisis.

The transaction will also allow consumers, especially the poor, to plan and invest in the future by helping to expand Sagicor’s presence in the Caribbean and eventually in Latin America.

“Insurance gives people the security they need to grow businesses and invest in the well-being of their families,” said IFC executive vice president and chief executive officer Lars Thunell. “This partnership between IFC and Sagicor will promote greater access to more types of insurance products in the region.”

The transaction is part of IFC’s strategy to expand its investment activities in the insurance sector, with the goal of increasing availability of insurance products that address individual needs, such as health insurance, and access to insurance products for smaller businesses, microfinance institutions, and agribusinesses. The effort involves partnering with global and regional insurance companies that are focused on expanding in emerging markets.