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Nubank enters life insurance in partnership with Chubb

  • Nubank and Chubb are launching a life insurance product in Brazil.
  • And this should drive revenue gains for Nubank considering the growing consumer interest in life insurance and its swelling customer base. 
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The Brazilian neobank has rolled out life insurance coverage—Nubank Vida—which will be underwritten by global insurer Chubb, per the press release.

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Nubank and Chubb are launching a life insurance product in Brazil.

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The offering is fully digital from quote generation to claims resolution, and policyholders have the flexibility of choosing their level of coverage. Basic coverage includes mortality protection as well as hospitalization costs, and customers can also elect for more expensive monthly coverage, including pandemic coverage. The partnership will also make Chubb’s Brazilian life insurance products available to Nubank’s some 25 million customers.

Nubank’s low-cost, digitized offering might help it capitalize on the growing consumer interest in life insurance in Brazil. Forty-seven percent of Brazilians indicated that life insurance has become more important to them during the pandemic, presenting an opportunity for innovative players to scoop up customers.

Similarly, an internal Nubank survey found that only 20% of surveyed customers owned life insurance, yet 75% were interested in the product, further illustrating the opportunity. Nubank is well positioned to attract these customers since its offering is fully digitized, allowing it to capitalize on the country’s growing smartphone penetration.

Moreover, flexible coverage will allow policyholders to choose the level of protection they require, which will drive down the price for basic protection. This could benefit Nubank, considering the high cost of insurance is an inhibiting factor that prevents Brazilians from owning life insurance.

The insurance expansion should enable Nubank to further monetize its large customer base and strengthen its competitive position in Brazil.

  • Nubank can cross-sell insurance to its swelling user base to drive increased revenues. Nubank already offers a broad array of banking services, such as business accounts and credit cards, and this product will expand its offering into another core financial services area. Nubank’s Brazilian customer base has more than doubled in the last year to around 25 million, giving it a sizable opportunity to cross-sell to these customers and diversify its income stream.
  • Expanding into insurance will also level the competitive playing field. Nubank’s principal competitor in Brazil, Banco Inter, trails Nubank in terms of customer numbers but leads Nubank with a more diversified offering. In addition to banking services, Banco Inter offers investment and insurance products, including life insurance, enabling it to generate greater revenues per customer than Nubank. Thus, adding insurance to its repertoire of services should strengthen Nubank’s competitive offering and make it appeal to a wider range of consumers.

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