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PROFIN Foundation

About the Project
Project Name: 
VidaAgrícola
Type of Facility Project: 
Innovation Grant
País de operaciones: 
Bolivia
Region: 
Latin America and the Caribbean
Project Thematic Focus: 
Product design
Product: 
Composite
Type of Risk Carrier: 
regulated insurance company
Type of Distribution Channel: 
Bank
Government networks
Microfinance institution
Project Description: 

'VidaAgrícola' is a composite insurance product, which includes protection for agriculture, life, and property; its cornerstone is linked with technical assistance for non financial risk management. The project will actively involve prospective clients to identify priorities and to provide input during the design and scaling-up of the product.

The project will be implemented in 3 phases, each one will last one year. During the first year, PROFIN and its partner Nacional Vida/ Latina Seguros will complete the product design, consolidate public-private partnerships with regional governments to grant their participation in  subsidizing part of the agricultural premium, select distribution channels and partners, train relevant stakeholders such as  government institutions and  distribution channels, in order to finally launch  the promotional campaign.

During the second year, PROFIN and its partners will implement a pilot, and prepare to scale up the product. In the third year, the product will then be launched nationwide.

Consortium Members: 

From its inception, Nacional Vida Seguros de Personas S.A has quickly become a leading life insurance company and the fastest growing insurer in Bolivia, providing a range of life, personal accident and funeral insurance products to commercial and low income market segments. It also offers access to an international health insurance network.

Latina Seguros Patrimoniales S.Ais one of the four companies that integrate the Nacional Vida corporate group.  

Both, Nacional and Latina have been interested in developing microinsurance products due to the growing demand in the country, and Nacional has shown its leadership launching their first life and property micro products, having subscribed 50’000 policies in the first year.

Beneficiaries: 

Small scale farmers are the most vulnerable economic sector in the country. Their economic activity is exposed to a series of adverse weather and climate conditions. The project focuses on small producers, of whom 68% own and cultivate an average of 1.5 hectares of land.

Lessons from the Project
Learning Agenda: 

Consumer demand and value

  • What factors convince small farmers either to buy or not buy the composite insurance product VidaAgrícola over other solutions that they already use?
  • What value do small farmers find in a composite insurance? Does the value they percieve from this product have a real impact on their welfare in relation to the price that is paid?

Supply

  • How needs of the client can  be incorporated into the design of a composite product and its commercialization?
  • What are the criteria to select delivery channels that are most suitable from the client’s perspective, as well as most efficient for the project?

Education

  • Which model is most adequate, sustainable, and efficient for awareness raising and education, for the consumer as much as for the insurer, distribution partners and the government?

Public-private partnerships

  • What are the conditions and factors that are most important to set up and consolidate sustainable public-private partnerships?
  • What role does an institution like PROFIN play in such a project?
Emerging Lessons: 
  • Non-financial values for clients allow for a better welcome of agricultural products that may seem expensive at first glance. 
  • Trust and information are key factors in the planning of a commercialization strategy, lack of these can deter sales.
  • Complex products need to be set up in an easy to understand way for clients to improve the sales effort.
  • Distribution channels for a rural product need to fulfill certain requirements. 
  • Several educational barriers need to be overcome when working with an insurers that is new to microinsurance.
  • Support from the government varies as different political changes occur; therefore different strategies need to be implemented to face these situations.
  • Risk analysis about different scenarios with the government should be implemented for a more structured implementation strategy.
  • Need to create a shared vision about the benefits of microinsurance with the government.
About the Organization
Tipo de vínculo con el Fondo: 
Innovation grantee
Country of Head Office: 
Bolivia
Region : 
Latin America and the Caribbean
Type of institution : 
Non government organization
Participation in Microinsurance: 
Consulting support
Organizational Overview: 

The PROFIN Foundation develops, promotes and facilitates financial innovation, linking them with non-financial services in cooperation with public and private institutions. Its aim is to provide micro, small, and medium size rural and urban agricultural producers access to appropriate, equitable, and comprehensive financial services. As a leading centre of expertise and knowledge, PROFIN has been  supporting economic development in Bolivia through innovative solutions on financial and risk management, as well as advocating supportive and consistent public policy.  For the last 5 years, PROFIN has worked on the development of microinsurance in Bolivia,  focusing on generating experiences and learning about microinsurance in the rural area.

More about the Organization
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