Microfinance Focus, October 18, 2011: Interview with Eugênio Velasquez, Executive Director and Head of Microinsurance at Bradesco Seguros, one of the largest insurance company in Brazil

How did you become involved in microinsurance and what is your current role?

Eugênio Velasquez: I have a great enthusiasm and passion for mass markets and have routinely been accumulating experience in distribution projects throughout my career. I first got involved in microinsurance in 2008, when Bradesco Seguros initiated a special focus on insurance for low-income markets and small businesses. It has now become an important strategic goal for Bradesco Seguros.

I am currently in charge of the development and implementation of products for the low-income market and am the official spokesman of Bradesco Seguros for this segment of the business. Furthermore, I have a number of additional roles relating to microinsurance, which include being the Chairman of the National Committee for Microinsurance and Popular Insurance of the CNSeg (Confederation of Brazilian insurance companies), being a member of the Microinsurance Network and the Microinsurance Working Group of the SUSEP (the Brazilian regulatory agency responsible for the supervision and control of insurance).

What microinsurance products does Bradesco Seguros offer and how are they distributed?

Eugênio Velasquez: Bradesco Seguros is the first insurance company in Brazil to offer products with the philosophy and concepts of traditional microinsurance products. Currently, we have two products on the market:

The First Protection Bradesco, a personal accident insurance, with USD 11,000 coverage for a monthly premium payment of USD 1.89.

Residential Bradesco Ticket, a home insurance product that covers damages caused by lightning, fire, explosion and flood, with a USD 5,500 coverage, in exchange of a single premium payment of USD 5.35.

In October, we will reach the milestone of one million policies sold only with these two products. Sales started in January 2010 and since then, the products have been distributed through insurance brokers in our branches.

All products are developed using extensive market research and we are in the process of developing and launching six new products in 2012. These include funeral insurance, unemployment, disability/hospitalisation, and several bundled packages such as home and life insurance, personal accident and funeral insurance, and funeral and unemployment insurance.

There is a perception amongst the low-income population in Brazil that insurance in "muito caro" or very expensive, what initiatives are being carried out by the government and insurance companies to change this?

Eugênio Velasquez: Our products have been developed by following two distinct ideologies. The first one is to offer products that are perfectly aligned to the needs of the low-income market. The second is to enhance the educational aspect, showing people the costs and benefits of buying insurance products.

Last year, through the Estou Seguro Project (sponsored by the ILO’s Microinsurance Innovation Facility), we made a video that illustrates the benefits of insurance are greater than the cost of the buying a policy. We are also currently launching two booklets with the objective of reinforcing the need to purchase insurance, which will be made available at the 7th International Microinsurance Conference in November.

With microinsurance on the increase in Brazil, the government is putting together a number of campaigns to raise the insurance awareness to ensure families are better protected.

Does the informal microinsurance market have an effect on the formal regulated market? If so, how?

Eugênio Velasquez: We don’t have an informal market in Brazil. The insurance industry in our country is completely formal and highly regulated. We can say, however, in Brazil we have an initial market for microinsurance called “Popular Insurance”. These products have been sold for a long time in our country and are individual products, such as personal accident, funeral, credit life, extended warranty, life and home insurance, with low monthly premium of up to USD 11. In Bradesco Seguros, among our 38 million clients, about 20 million of them have bought these products.

In general, these products are distributed through traditional insurance brokers, bank branches, retail shops and utility companies.

In 2010 it was estimated that Brazil have between 23 and 33 million microinsurance clients, how do you think this figure will change over the next 5 years?

Eugênio Velasquez: We agree with this number, although we acknowledge that in the five coming years, we hope to reach 60 million clients. According to studies published by the Fundação Getúlio Vargas, a Brazilian higher education institution that focuses on economic, social and financial analysis, this figure will grow even more over the next 10 years, with an estimated outreach of 100 million people.

Bradesco Seguros aims to be the leader in this market and in order to achieve this goal, we intend to focus on using technology to facilitate sales through mobile phones, POS, PDA, ATM and the internet, as well as using our unparalleled distribution channels (Bradesco Seguros is present in all Brazilian cities with about 40,000 points sales and service). Additionally, we intend to further develop simplified products with understandable language and affordable premiums. Not only will these products be sold through bank correspondents, using the regional and local retail chains and microinsurance brokers, they will also be coupled with extensive and continuous education programmes.

In light of the upcoming 7th International Microinsurance Conference, which will be taking place in Rio de Janeiro, Brazil from 8 to 10 November 2011, the organisers, Munich Re Foundation and the Microinsurance Network, are interviewing selected speakers at the conference to highlight the content that will be discussed.

This interview with Eugênio Velasquez, Executive Director and Head of Microinsurance at Bradesco Seguros, highlights some of the content of the Plenary 3 session of the conference, which is entitled "Roundtable on microinsurance in Brazil".

Disclaimer: This interview was contributed by Microinsurance Network. Microfinance Focus is not responsible for the content correctness.