Despite the economic downturn there are still substantial opportunities for growth in the insurance market. The growing middle class increasingly influences the mix of products offered by brokers and carriers.
A good example of this is the creation of microinsurance. This alternative insurance provides coverage for consumers across a range of risks, but also contributes to the growth of the economy by acting as a boundary between financial services and social protection.
By the end of this year, carriers will begin selling microinsurance by text message (SMS), which reflects the fact that everyday technology can help boost product sales. SUSEP (Brazilian Private Insurance Office) recently passed a new regulation for the marketing of insurance products and services at lower prices. This is now being implemented in Brazil .
How are Brokers Adapting?
The introduction of this regulation in the continuously evolving Brazilian market has meant that brokers have had to adapt their product portfolios and the way they sell insurance. There is always a need for brokers to update their marketing strategy in order to reach new customers and offer alternatives and new technologies.
This product, created exclusively for prepaid customers of TIM (TIM Brasil, a leading Brazilian telecommunications provider) offers three microinsurance products with the option to purchase via SMS:
- Personal Accident Funeral Assistance (with the reimbursement of funeral expenses in case of death)
- Crime Victims Assistance (includes services such as transportation, keychain and other emergency services)
- Sweepstakes (10 weekly prizes valued at $500).
With a premium of $1.50 Brazilian reais per month, the aim of these services is to deliver good coverage and contract terms simply and at a low cost.
Low Operating Costs for Both Brokers and Carriers
With trends like this emerging, the Brazilian insurance market is becoming more and more automated. Gathering contracts by phone may become the simplest and most cost-effective way for carriers and brokers to do business. This new approach enables all aspects of the sales process to be integrated into the same chain and reduces paperwork.
The feedback from the pilot project has been so positive that is has now entered full product development. It looks like mobile phone insurance transactions are here to stay!
Guest blogger Luiz Fabregat is the Affinity Director of Willis Brazil. He joined Willis in 2002 as leader of the Affinity business sector in Brazil, specialising in new distribution channels and strategy for auto manufacturers, retailers, banks, telecommunications and work site marketing.