Digital channels are becoming an ideal opportunity for the industry to deliver agile, accessible, and affordable solutions to society. However, significant challenges remain, such as educating users and simplifying the language.
Digitalization in the insurance industry is becoming more critical and necessary, not only for company operations but also for improving customer experience and attracting more consumers.
In an interview with El Asegurador LATAM, Alessandro Labelli, Head of Insurtech at Mercado Pago, discussed how technology and digital channels can make insurance more accessible to population segments that currently lack coverage. He emphasized the importance of understanding the protection needs of users in these specific markets.
El Asegurador LATAM (EAL): Mercado Pago has led the way in integrating digital financial services across Latin America. How do you see the role of embedded insurance in your ecosystem’s evolution, and what specific benefits have you identified for your users?
Alessandro Labelli (AL): I need to divide my answer into two parts. The first is how we see the insurance value proposal within the Mercado Pago ecosystem, and the second is how we plan to evolve.
Initially, we focused on our users’ needs (we refer to this as protection in all categories), because our business includes a range from extended warranties on Mercado Libre to traditional insurance products.
At Mercado Pago, we identified an opportunity to replicate our method of selling protections within the marketplace in an embedded manner. For us, this means addressing insurance and protection organically and naturally as part of the user experience within the app.
So, we detected a need among online users, based on existing market offerings, that we were able to meet in our app. By this, I’m referring to the use of payment methods, payment instruments such as cards, and other general uses, for example, sellers who need to protect their health from accidents or even their lives.
Therefore, we designed these protections to be affordable and easy for users to understand while navigating the application. That’s how our first insurance products were born within the Mercado Pago app.
In late 2022, we launched the Protected Belongings Insurance, and in early 2023, we launched a Life and Accident insurance.
Regarding embedded insurance, we promoted these insurance products through messages, push notifications, and banners within the Mercado Pago app. We noticed that users understood the insurance products better when browsing the app.
In our experience, we noticed that users were able to connect the protections offered with their activities within the app. This connection led to an organic increase in sales, representing a significant turning point for us in how we communicate integrated insurance to users as a cohesive offering.
From then, we also observed that our intuition to design small, affordable products, almost like microinsurance, was another excellent opportunity to close the gap between people who had never purchased insurance and those who could not afford it due to high premiums. As a result, we designed products with low insured sums.
For a long time, we offered this Protected Belongings insurance plan at MXN 32 per month (about USD 2). This very affordable price made it easy for many people to purchase and pay for it each month.
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