Microinsurance in Latin America: Disruption in Practice

by Juan Mazzini, November 11, 2013
Industry Trends
Latin America

Abstract

Microinsurance is aimed at people typically ignored by mainstream commercial and social insurance schemes. The potential microinsurance market in Latin America is estimated at 360 million people, with Mexico and Brazil comprising around 55% of the total.

In the report Microinsurance in Latin America: Disruption in Practice, Celent provides an overview of the microinsurance market in Latin America, looking at its implications as well as its future.

Growth of microinsurance has mostly been through simple products, which are easy to administer and usually tied to microfinance products. The major challenge resides in including more commercial products, such as index insurance.

“The microinsurance market is an excellent source of innovation for insurers. It matches perfectly with the underlying conditions required for disruption. Microinsurance stands as a foothold for an underserved, untapped, and fragmented market, with a high cost to serve under the traditional Insurance model,” says Juan Mazzini, Senior Analyst with Celent’s Insurance Group and author of the report. “Innovation around products, pricing, packaging, distribution, processes, and technology will be necessary for insurers wanting to compete for a profitable market share.”

This report examines the challenges and opportunities for Latin American insurers in the microinsurance market. Business and technology strategies are discussed in detail, along with some case studies from the region and the world. Trends discussed reflect Celent’s experience of the market based on ongoing discussions with stakeholders from the industry as well as secondary research.

This is Celent’s first report about microinsurance in Latin America, although we have published other reports on the subject, such as General Microinsurance in India, Life Microinsurance in India: Potential and Pitfalls; and Microinsurance to the Last, the Least, and the Lost.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is part of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America (Boston)
Erica Ferguson
eferguson@celent.com
Tel.: +1 617 262 8225

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)208 870 7875

Asia (Tokyo)
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Table of Contents

Executive Summary

Introduction

 

Microinsurance as a Disruptive Force

Understanding the Microinsurance Market in Latin America

 

Definition

 

Importance

 

Trends and Current State

 

An Example: The Case for Microinsurance in Latin America

Challenges and Opportunities for Microinsurance in Latin America

 

Understanding the Customer

 

Distribution

 

Technology

 

The Importance of Innovation

 

Moving Forward

 

Some Examples from Around the World

Conclusion

Leveraging Celent’s Expertise

 

Support for Financial Institutions

 

Support for Vendors

Related Celent Research

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