One of the most interesting and gratifying areas that Ensure Tech has made a difference in perhaps fintech more broadly has made a difference, is that the so-called base of the pyramid, where technological advancements have allowed the reaching out to markets that have traditionally been underserved. The definition of the base of the pyramid some would say by the C.K. Prahalad notion, four or five or some would say six billion people around the world living on less than two dollars equivalent per day, represent what one US President described as the great powerful mass at the base of the economic pyramid. Those who are underserved, those who are challenged by the iron ring of hostile environments, where direct insurance, which could ensure away some of the risk is the hostile environment, are either impractical, expensive or not profitable to provide. A leading example of an enterprise focusing on the base of the pyramid is the Omidyar Network, which was founded by Pierre Omidyar in 2004. Omidyar as many of you know was the co-founder of eBay. It's interesting model and that's a non-profit profit model that combines a for-profit limited liability company with a 501(c)(3) organization in the US that makes grants. It's either donated or invested more than $1.5 billion since its inception. Almost half-half, $676 million of for-profit investments just under $800 million in grants, targeting microfinance, microinsurance, infrastructure and technologically enabled activities focused again on the base of the pyramid, much of which could be classified as fintech. One example via investments in LeapFrog is specifically microinsurance. Microinsurance is the provision of insurance products or services to low-income, low-net worth population, who would otherwise have limited access to insurance but who have tremendous needs. They could be exposed to challenging geopolitical environments or histories, harsh physical environments perhaps exposed to earthquakes, pestilence, fires, volcanoes or they could be exposed to geopolitical challenges as well as poverty. The kinds of products that have been provided by microinsurers range from traditional term life policies, but also the kinds of policies that focus on risks that are especially specific to the base of the pyramid, namely accident insurance and disability insurance, which if not otherwise provided, could see a family, highly exposed to a given wage earners' physical health. Casualty insurance, insuring crops and livestock, and insuring against earthquakes and tsunamis and natural disasters. Even these days, expanding to savings plans. The kinds of insurers who are involved today are large multinational insurance companies like Tokio Marine, credit unions or other mutuals, governments, NGOs and also small community organizations and regional insurers. The benefits of microinsurance are traditional. The pooling of risk, providing financial protection in a traditional manner, but also allowing those who are insured to take risks that provide betterment in their life. For example, drought insurance, providing the ability for small farmers to withstand the shock that would otherwise wipe them out, who have natural exposure to variation in weather, or safeguarding families from falling back into poverty from the death of a breadwinner or having a destroyed house. The Indian Ministry of Health found that 25 percent of all hospitalization in India pushed individual or families into poverty due to the cost of treatment. We could also target specific populations. For example, in South Africa, All Life which is a subdivision of Sanlam has focused on providing insurance to those who are already HIV positive or those living in flood zones or to micro-entrepreneurs. Microinsurance is also valuable, because it can complement other social welfare programs or bolster other so-called micro-finance activities. For example, the ability to assign a term life policy to secure a business or a mortgage loan. A very interesting example is BIMA, which is an "Insurtech" leader and some would say an insurance business disruptor, it's a mobile insurance and health company that provides accident, life and health insurance to low-income population members in 15 African, Asian and Latin American countries, with its largest markets in Ghana and Sri Lanka. How does it do it? It provides insurance underwriting and customer interaction using mobile technology. Microinsurance subscriptions via cell phones. The BIMA business model is a "pay-as-you-go" subscription model, enabled by mobile phone technology. The products which can cost as little as $0.60 a month in the "pay-as-you go" rollover approach, offers payouts up to a $1,000 to a family if the insured person dies. It's a streamline model, takes only three minutes to sign up, and the payments are collected through mobile phone services using local country technology. Recently, BIMA has indicated that it has grown by over 550,000 customers a month and that the overwhelming majority of those customers live on less than $10 a day. In fact, three-quarters of them have never had insurance before. Executives at BIMA tell us that one major component that their offering is educating customers on how life insurance works, because many of them had simply never been exposed to it and faced a trust gap. Because they've never been exposed, they didn't think it worked. They needed to be shown by example. BIMA recently received a $300 million valuation at the sale of LeapFrog stake to Allianz, the European insurer, for almost a $100 million. There are some subtle differences, when we consider what the incumbents have been doing with respect to investment around the globe or with respect to maturity of investment they've been making. Clearly in the last five years, technology developed in the United States has led the fray. 54 percent of private technology investments by insurers themselves have focused on the United States. That has been diversifying however, compared to the last five years. For example, in the last five years, 54 percent of private technology investment by incumbents has been in the United States whereas, in the fourth quarter of 2018, only 33 percent has been. 21 percent was in China, 13 percent in Germany and 13 percent in the UK compared to 8, 8, and 6 over the last five years. In other words, we see a rapid internationalization of investment targeting by those who are moving quickly to ramp up as incumbents. We also see that they are investing further along the life cycle of the company's targeted. Only 16 percent of investments were Seed or Angel stage, whereas 29 and 24 percent respectfully were Series A or Series B. It's not that surprising that incumbents are outsourcing technological development. Now, we can see that trend continuing the most recent time period, when 35 percent of targeted investments fell into the Series B classification. This is a pattern that we see in other industries historically where, independent disruptors, those who finance and carry out innovation are brought into the incumbents as the incumbents respond to the disruption. Insurtech is an outstanding example of that pattern.
