Finland's Finnfund to buy nearly 15% stake in TPL Insurance

TPL Insurance, a subsidiary of TPL Corp Limited, has entered into a share subscription agreement and a shareholders agreement with the Finnish Fund for Industrial Cooperation Limited, a private limited company incorporated in Finland, (“Finnfund”), a notice to the Pakistan Stock Exchange (PSX) said on Friday.

Finnfund is a major development financier and impact investor, investing in responsible and profitable businesses in developing countries.

“Finnfund will hold 20,640,000 shares representing 14.97% of the total post issued share capital in TPLI, on a fully diluted basis, subject to obtaining all regulatory approvals,” read the notice.

Finland's 'major development financier' eyes investment in Pakistan's TPL Insurance

Founded in 1980, Finnfund made 31 investments with a total worth of 206 million euros in 2020. New investment decisions target mainly (98%) countries of low or lower-middle income, in which the need for sustainable development investments is greatest.

Meanwhile, TPL Insurance said that this foreign collaboration will enable the company to introduce innovative and tech-driven products, such as yield based crop and livestock insurance, as well as women-specific insurance programs.

“Thereby increasing penetration of insurance in Pakistan in diverse segments,” it said.

This is the second such investment by an international development financier following DEG – Deutsche Investitions - und Entwicklungsgesellschaft mbH since last year.

Last year in April, DEG a wholly-owned subsidiary of KfW Group based in Cologne, Germany, acquired a 19.9% equity stake in Pakistan’s TPL Insurance by investing Rs466.5 million ($3mn) on a fully diluted basis.

TPL Insurance then said that the collaboration will help it to develop its agriculture and micro-insurance segments, thereby increasing the penetration of insurance in Pakistan. “The equity injection will also improve the financial strength and underwriting capability of TPL Insurance,” it added.