MercadoLibre launches second insurtech product in Brazil and targets the unbanked

RIO DE JANEIRO, BRAZIL – The Argentine e-commerce and fintech giant is starting to offer the possibility of taking out life insurance through MercadoPago. Why is it betting on the sector?

MercadoLibre, the Argentine e-commerce giant, launched in Brazil a life insurance service through its fintech app, MercadoPago, representing the second step of the company led by Marcos Galperin in the insurance market.

The solution, developed by Argentine startup Klimber, is part of the Latin American unicorn’s strategy to expand the MercadoPago ecosystem following the launch of the cryptocurrency trading service in 2021.

The product is backed by Prudential Seguros and Swiss Re. Users will pay monthly installments from their digital accounts. Through the initiative, MercadoPago customers will have an insured sum of R$150,000 (US$28,700), claims resolutions, telemedicine, and dental emergencies, among other services.

When asked by Bloomberg Línea, MercadoPago sources assured the service has a huge potential market in those unbanked people with low access to insurance through traditional means.

“We are accessing a segment that until now was not attacked by anyone,” said Julian Bersano, CEO of Klimber.

They also highlighted that the Brazilian market was chosen for the launch because it is the largest market in the region, with a high potential in the insurance sector. The service will be incorporated into MercadoPago in other countries in the region soon.

With the precedent of having launched in 2021 an insurance for cell phone theft and damage, which had an excellent acceptance, according to the company, the decision to launch life insurance was made during the pandemic, which highlighted the relevance of this type of product for consumers.

At the same time, the company indicated that it plans to expand its offer in Brazil with a complete personal accident insurance product and, in the future, will continue to analyze areas where there is potential to provide users with a relevant value proposition.

MercadoPago emphasized that the new product is aimed at a segment, both individuals and small merchants, with low access to life insurance, telemedicine, and dental emergencies.

Therefore, the policies can be customized according to the needs of each user to cover everything from death and funeral expenses to hospitalization annuities and coverage for serious illnesses or surgeries.

In this sense, the company is confident that there is a massive opportunity for growth in Latin America, not only in Brazil, as it understands that most of the population has never received an insurance offer, in a context in which 50% do not have a bank account.

Julián Bersano, CEO of Klimber, considered in dialogue with Bloomberg Línea that the launch represents a significant milestone for the Argentine company: “We are accessing a segment that until now was not attacked by anyone, which is to sell personal insurance to the base of the pyramid in a market such as life insurance or insurance in general”.

“There is little interest in selling to the base of the pyramid because there is low commission,” explained the CEO of the first company in the country to create an intelligent platform that allows you to buy insurance 100% online,” he explained.

“In 2018, we launched the first life insurance in the digital region, and the road was always quite winding. Achieving the launch in Brazil of such a product is a spectacular milestone. Moreover, we did it with the largest player in Latin America,” the entrepreneur highlighted.

“In a few hours, we passed 1,000 policies. It is going very well,” he said and anticipated that Klimber’s projection, through its regional expansion plan, is to reach 1 million policies placed in Latin America during the next twelve months.

Although he assured that the intention is to expand in the region after the launching in Brazil, he emphasized that the starting point in that country is the “biggest challenge for any Latin American company that is not from that country because the language is different, the market is super large, and the regulatory framework is complex because each Brazilian state is a separate country”.

With information from Bloomberg

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