EMERGING LIFE INSURANCE STARTUPS

Youse: Innovative Digital Insurer

•  Youse, launched in 2015, is an online insurance startup that offers life, home, and auto insurance. The company, located in São Paulo, Brazil, was launched by Caixa Seguradora, a subsidiary of CNP Assurances.
• In 2018, Susep, the Brazilian insurance regulator, authorized Youse as a digital insurer. As such, the company offers the ability to buy insurance "without the need to consult an insurance broker during the process, making the service faster and eliminating steps."
• Youse life insurance services cover double compensation for accidental death, compensation for the death of a child, and natural and accidental death, among others.
• Competitive advantage:
• As an online platform, "Youse offers personalized insurance policies in a matter of minutes through website or mobile, 24 hours a day, seven days a week."
• Youse provides more than 1,000 possible combinations of insurance services during the purchase process.
• The company insurance business model eliminates the need to consult an insurance broker, which makes the service faster.
• Reasons to Include Youse as a startup that is attracting opportunities:
• Youse was founded by Grupo Caixa Seguradora, which is Brazil’s fifth-largest insurance company, with over nine million policyholders.
• The company's performance is a sign of its promising future in attracting opportunities: The startup has more than 150k customers. Since the company's launch in 2015, about 17 million quotes were made.

DM10: An Insurance Marketplace

•  DM10, an insurance marketplace that launched in 2007, is located in Rio de Janeiro, Brazil. The startup connects independent distributors of life and pension insurance with customers.
• The company's portfolio includes private pension insurance, life insurance, and professional income loss Insurance.
• Competitive advantage:
• The company is "the first insurance company that offers a 100% digital open architecture platform and has a White Label culture, where the protagonists are partner consultants."
• Currently, DM10 has more than 900 affiliated brokers and insurance companies.
• Reasons to Include DM10 as a startup that is attracting opportunities:
• In 2017, DM10 had accumulated funding over a Private Equity round that drew one investor, Old Mutual. Moreover, in June 2020, the startup was acquired by XP Inc., a Brazilian VC fund. Both events are signs of the success of DM10 in attracting investors that are predicting the future opportunities DM10 will attract.
• The company's insurance partners include some of the biggest life insurance companies in the country, such as Sulamerica, Mapfre, Amil Insurance, Icatu Seguros, and Unimed.

LIFE INSURANCE MARKET: DISTRIBUTION BY SALES CHANNELS

Bancassurance Dominates the Market

•  Sixty-four percent of life insurance coverage was sold through banking institutions in 2019. This practice is commonly-known as bancassurance. As such, Brazilian customers are more likely to buy life insurance policies through banking channels, "which is unlikely to change in the near future."
• In 2014, the bancassurance channel accounted for 80% of life insurance premiums.
• Specifically, "bancassurance is the dominant distribution channel for individual life insurance, retirement savings, and capitalization products."

Other Sales Channels

• In 2013, brokers, as a sales channel, followed bancassurance in the life insurance segment. "The number of new policies sold through brokers increased from 1.3 million in 2009 to 2.2 million in 2012, with this number expected to increase to 3.6 million by 2018."
• Other sales channels are retail stores and dealers. As such, insurers entered "into agreements with large retailers for distribution."
• Caixa Seguros chose an innovative channel: lottery network.

Online Sales Channel

• While bancassurance is dominating the market, digital distribution within the segment began to emerge. Digital distribution channels include "digital marketplaces and open banking systems selling unit link products. Leading insurers are already moving to transform their distribution and expand their use of digital channels."
• E-commerce channels and online aggregators are on the rise in the Brazilian life insurance market.

LIFE INSURANCE MARKET OVERVIEW

Market Size and Growth

• In 2018, the Brazilian life insurance premium volume reached $35.576 billion.
• Individual and group life insurance reached $8.852 billion, which is a share of 24.88% ((8.852/35.576)x100).
• Free Benefit Generator Life insurance reached $26.724 billion, which is a share of 75.11% ((26.724/35.576)x100).
• In terms of the structure of investment, the market breakdown is as follows:
• Investment funds: 89.1% 
• Debt: 7.8% 
• Equity: 2.9% 
• Other (Real estate, Cash, and Other financial investments): 0.3% 

Top Life Insurers by Market Share in 2018

• Brasilprev: 24.5% 
• Bradesco: 23.1%  
• Itau: 14.9%  
• Caixa: 14.2%  
• Zurich: 7.3%
• MAPFRE: 4.8% 
• Icatu: 2.6% 
• Prudential: 1.8%
• Cardif: 0.9%  
• Safra: 0.9%