Fintech in Latin America – Insurance for everybody

insurtech_dcTo talk about insurance in Latin America is quite a challenge because there is no culture of insurance in the continent. Conversely to the US or Europe, to buy an insurance policy is more an obligation than a natural preventive action. With this reality, the insurtech has the mission to change the mentalities of the Latino-American people showing the value of an insurance policy for a fair price Brazil, the most developed Fintech landscape of Latin America has shown an interesting evolution of how the insurtechs are evolving themselves.

The Insurtech movement started with online marketplaces of insurance policies since 2011 with actors as Minuto Seguro and Bidu. Since then, the demand has increased exponentially because insurtechs had appealing prices and an available and helpful customer service. We mentioned before that Latino-Americans are not active consumers of insurance services. So, even if the purchase of policies is done online, the contact with the customer service is important to reassure customers about the service acquired. Since 2016, some disruption emerged in the insurance market. We have for example, ToGarantido, a broker of micro-insurance that targets the low income class using online and offline channels. This is an example of insurance for inclusion. Then, we have Youse, an insurtech focused on millennials who can build and purchase their own insurance service with an app. The insurtech also plans to use no intermediaries to sell its services but this point is still under review with the regulator. To foster the Brazilian ecosystem, the largest local insurance company decided to play a key role supporting innovation. Recently, Porto Seguro made a deal with Orange consulting to dig more on the Internet of Thing experience. Porto Seguro also created Oxigenio, an accelerator program to monitor and do partnerships with local insurtechs. Insurtechs are giving to the insurance market a new face that can convince Latino-Americans to finally bet on and trust the sector.

Thank you to assess the article at to able to write a deeper analysis of the evolution of insurtechs in Latin America.




Fintech…no sorry call me “Insurtech”

The press loves to write about the complicate relationship between startups and banks and how this is changing the financial services market. But, what can we say about “Insurtech”? The Fintech movement was supposed to cover all the startups providing financial services, nevertheless the startups providing insurance services preferred to differentiate themselves and created their own label. The “Insurtech” can put the insurance market to another level where technology will define new products, play with big data and push further the customization.

In Latin America, this movement will may be slower. First of all the insurance market in Latin America is very different compared to the US or Europe. The culture of purchasing insurance policies is just starting. The last years, the middle classes in these countries have grown up developing the insurance culture and appealing international players to settle around. In 2014, the Insurance market in Latin America grew of 2.2% compared to 2013. Even if 2015 was considered as a difficult year, the insurance market should grow again.

The challenge is double:

  • Insurers need to get more clients and there is no generation exclusivity
  • It is all about technology

For example in Brazil, less than half of the insurers use technology or digital channels to sell products or provide insurance quotations.

What are the actions taken abroad to help the Insurtech to disrupt the ecosystem?

Big funds and accelerators are aware about the role of the Insurtech wave.

Sequoia Capital announced in December 2015, his investment of USD 13 million in Lemonade, a peer-to-peer personal insurance in the US. This is one of the largest seed investments in the firm’s history. If they took this risk, certainly Lemonade is creating disruption and is a company that we need to follow in the future.

Axa, one of the top worldwide insurance companies, created the incubator Kamet in order to boost technological innovations to serve insured people. They plan to invest 100 million euros on the project; the program should start on January 2016. This is another initiative to add to their Axa Labs in Silicon Valley and Shanghai and the Axa Strategic Ventures entity.  The company planned to give another step to dig in innovation and technology and contribute to the Insurtech. Axa recognizes that technology is changing the value chain of the industry and they need to act fast.

In Latin America, there is a first initiative launched by Porto Seguro, the top one insurer in Brazil. In September 2015, they inaugurated an accelerator called Oxigênio (oxygen) in a partnership with Plug and Play Tech center from the Silicon Valley. Oxigênio plan to work with 10 startups per year. The first 5 companies will start in January 2016. The first 3 months of the program will be spent in Sao Paulo and then 3 months in Silicon Valley. The companies selected will be able to do business with the companies of Porto Seguro group, to be mentored by executives from the group and active players of the technology market and to use the tools and facilities of the company. Porto Seguro plans to invest 50 thousand dollars in each startup selected.

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There are few examples of insurance startups in the market but we hope that thank to these initiatives, new Insurtech startups will emerge in the Latam ecosystem.

To be a good player in this industry, remember:

  • Focus on the customer, because he is the king (what does he needs)
  • An engaged player (go with the customer all along the contract, not only at the beginning and at the end)
  • Get/Provide data and more data (insurers need data)

If you have considered these three points, your Insurtech startup is on the right path. OxigenioAceleradora