Zurich Brazil, part of the Zurich Group, is one of the 20 largest insurance companies in Brazil. For ten years Zurich Brazil has distributed mass-market insurance products through alternative distribution channels. Zurich has developed a product for the lower income middle class that combines different types of insurance and can be purchased individually or combined, once basic cover has been acquired. The basic cover has: R$5,000 for Accidental Death in Public Transport, R$2,500 for Accidental, Death Caused by Other Events, 3x R$250 for Unemployment, R$5,000 per month for Lottery and Home Assistance. Possible additional covers are: home owners (home protection), personal accident and funeral (family protection) and hospital cash (health protection). To get closer to the low-income clients, Zurich is adjusting both its traditional products and insurance processes. The policy has been simplified, written in a straightforward and easy to understand language, and formatted in a colorful style, presenting information in a question and answer format. Moreover, both the insurance purchase and claim settling processes will be simplified.
The initial distribution channel for this product will be Valecard. Valecard is a Benefit Card Company based in the state of Minas Gerais in Brazil. Its clients are the Human Resources Departments of companies that provide the Valecard Credit Card benefit to its employees. The employees are primarily from low-income families – with an average income around R$500.00 ($313 USD) per month - and without bank accounts.
As of today Valecard has 130,000 active cards (clients). The first step is to reach the clients with the basic product. The basic cover would be a voluntary product. The monthly cost for the basic cover is R$5,99 (about $3.75 USD) and each extra cover is R$ 3,00 (about $1.9 USD). The product includes a lottery prize that is higher for clients who have purchased more than one cover.
Both Valecard and the participating companies will support the sales of the product. The sales force will be trained along with the promoters.
The distribution of the product is planned using two channels:
- Promoters: sales kiosk at the ten biggest Valecard clients, for four days during the year, with the first month premium as sales incentive
- Direct Mail: to current basic products clients – twice a year
Zurich will also try to partner with financial services providers, retailers, supermarkets, and utility companies (e.g. phone, gas, electric). These partners should be able to distribute the product more cost-effectively, as they will add insurance on top of their existing client relationships.
Date created: June 2011