15 November 2017Insurance

AXA forecasts personal accident coverage growth in LatAm

There is a growing appetite in some Latin American markets for personal accident coverage, an insurance policy that pays out if an individual dies suddenly or is critically injured and unable to work, according to Philippe François, global head of business development, AXA Life and Health Reinsurance.

He said that as the middle-class population in many countries grows, there is an increasing willingness for people to protect their family and lifestyle against an unforeseen accident. He noted that increased wealth and affluence often go hand in hand with individuals having more free time to pursue hobbies and activities such as sports, home improvement activities, etc. This often leads to the logic that such activities can result in accidents rendering people unable to work, and makes them open to buying such coverage.

In term of distribution strategy, many markets already have established bancassurance companies, for example, which are often an ideal way to distribute the product perfectly adapted in terms of design and underwriting process.

“In our experience, when a country starts to develop a culture that understands and accepts insurance, this is often one of the first products that can be sold as it is relatively simple and easy to understand,” François said. He added that this type of personal accident product has a great market potential in the Chile and also in countries with a growing middle class such as Peru, Colombia and Mexico.

François added that AXA, particularly in France, has vast experience designing, managing and selling similar personal accident products in other markets and can assist their development in Latin America using AXA’s long track record and experience in this business

He explained that the nature of the product can be adapted to the specific needs of each market, from paying out a lump sum to more complex products that are aligned to income protection on a monthly basis.

“AXA France has been a key player in the development of that business in France, where the ‘Family Protection’ product is a great success for the local intermediaries and a differentiating offer to provide to clients,” François said.

“We plan to launch new products in some Latin American markets to respond to the growing insurance needs of the new middle class and help local insurance companies differentiate themselves in a more competitive market.”

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