Life insurance and other discretionary purchases of insurance products in Dominican Republic are limited by factors such as low incomes of local households and inadequate consumer awareness.
- According to Central America Data, it was reported that in July 2019, the insurance market of the Dominican Republic saw the highest growth in health (56.18%); followed by bonds (41.20%); and marine and air naves (40.68%). This naturally indicates preference towards health insurance purchase in the Dominican Republic in recent days.
- The inclination towards health insurance purchase was also corroborated by the fact that the branches of greater participation were in the order of: health (30.02%); fire and allies (22.39%); and motor vehicles (22.05%).
- However, what percentage of these health insurance purchases was self-motivated could not be ascertained definitively as motor third-party liability, workers' compensation and public health insurance are compulsory in the Dominican Republic.
- The market forecast for Q1 2020 also points toward the fact that demand for insurance in the country is concentrated on basic or compulsory lines, such as property and motor insurance.
- During the last quarter of 2017 motor vehicle insurance was found to be the main drivers of growth. However, a strong surge in demand for health and personal accident insurance products could be noted at the time, which was driven by a strong economy and rising disposable income.
- In 2019, a surge in the purchase of travel insurance could also be noted caused by the news of tourist deaths in the Dominican Republic. Statistically, out of those who were concerned about the news 59% said they were "likely to purchase travel insurance that has medical coverage."
- Although there was no "survey-supported data" to identify which payment method was most used or the most preferred, each provider had multiple payment options listed in their websites.
- One of the biggest insurers in the Dominican Republic is Seguros Universal.
- Payment methods offered by Seguros Universal are: Universal APP, Universal Online, Automatic Payment (making scheduled payments registering bank account or credit card), Telephone Payments (through credit cards) and branch offices.
- Another significant insurance provider in Dominican Republic is Mapfre BHD
- Payment methods offered by Mapfre BHD are: automatic scheduled payments through credit card or bank account; traditional payments in cash, checks or credit cards, payment at providers' office, online payment and payment through Banco BHD león branch network.
- Another insurance provider included in the list of 'top five providers' is Seguros Reservas.
- Payment methods offered by Seguros Reservas are: Customers App 365, Insurance Offices Reservations, payment via contact center, online, Banreservas Branch Network and T-payment dialing * 150# from the cell phone.
Factors Influencing Insurance-Buying Decisions
What Information Was Not Found
- We could not provide exact insights relating to methods of payment used and preferred and who the primary decision maker is.
- Moreover, although we could provide some details relating to factors influencing insurance buying decisions, we could not provide evidence indicating which were the key ones.
To find the information missing, as mentioned above, I deployed the strategies below.
The research team started our search looking into the database of insurance organizations working in the Dominican Republic which included Asociación Dominicana de Corredores de Seguros - Adocose, The Insurance Association of the Caribbean Inc and the websites of the providers such as Seguros Universal, Mapfre BHD and Seguros reservas. We looked at their websites, reports published by them analyzing the industry, internal research publications published as blog posts or website articles.
Adocose had extensive reports covering the insurance industry; however the reports only provided data in terms of market size, growth in premiums at different sectors etc. There was hardly any information relating to purchase behavior or who makes purchase decisions. Although from the company websites, we could find information relating to how they accept payments, there was no definitive survey indicating the most used avenues or the most preferred ones.
We subsequently looked into market research reports on the Dominican Republic's insurance industry. Sources included sites like centralamericadata, market research, business wire among others.
The objective behind looking at these sources was to find information on the market drivers that could be analyzed in terms of locating the consumer preferences which were driving it. For example, if people were asking for online premium payment solutions while choosing their provider, it could be derived that it was the preferred payment method.
However, the information provided in the free sections of these reports were targeted towards the overall market and its growth predictions.
From the information relating to the growth of sub-segments and the market we could identify some insights relating to purchase preferences, or inclination towards a particular type of product and what was driven by mandatory regulations and which ones were driven by discretionary spending.
We then looked at expert interviews from the sector published in newspapers such as El nacional, Diario libre, El Caribe, Listin diarioand others. Our aim was to find required information from such interviews because when experts are commenting or presenting their views on the market, they hint at what the consumers prefer or which type of consumer they target as the main segment.
Some of these newspapers carried information analyzing the sector, but the interviews of company executives or agency leaders were concentrated towards the growth of the market, how industry bodies were working towards modifying some of the existing laws or the role of foreign players in the market. There was no additional information on how the consumers think.
Finally, we looked into academic reports such as those published in Academia or researchgate and reports on country-wise insurance penetration published by global agencies such as IMF, World bank and others.
Presumably owing to the relatively smaller size of the Dominican market there was almost no academic reports. The reports published by IMF or World Bank provided only the penetration percentage for insurance in countries such as the Dominican Republic.