LatAm’s MercadoLibre reaches 5 million clients in insurance business

By Carolina Pulice

MEXICO CITY (Reuters) -Latin American e-commerce company MercadoLibre (NASDAQ:) has reached five million clients in its insurance business, according to a senior executive, marking another step forward in its bid to become the largest financial and e-commerce ecosystem in the region.

MercadoLibre reached the milestone in less than four years thanks to heavy investments in technology and a focus on users, Carlos Cernadas, head of Insurtech LatAm for the company, told Reuters.

“Our main clients are low, mid-low income people, because there is where we found the most insurance needs,” Cernadas said, adding that offering insurance via the company’s marketplace and Mercado Pago has enabled improved access.

All across the region, Latin Americans lack access to insurance products and coverage, Cernadas said.

According to data from the OECD, Latin American countries rank far lower than peers in North America, Europe and Asia for their gross insurance premiums.

The Argentine-based company, which operates in 18 countries, has not disclosed how much it invested in the insurance business this year, but said it planned to invest 19 billion reais ($3.90 billion) in logistics, technology and fintech in Brazil and $1.6 billion in Mexico.

Caroline Sanchez, an analyst at investment consultancy Levante, said the five million mark was the result of an “assertive move” by MercadoLibre that reinforces the company’s primary business offerings.

“Deep down, each of MercadoLibre’s recent launches are like a subdivision of the company’s core e-commerce and fintech businesses, which the company has bet on and which have been bearing fruits,” Sanchez said.

The company last Wednesday reported a 113% rise in its second-quarter net income to $261.9 million, amid higher sales volume and an increase in users.

In the fintech division, MercadoLibre said it added 7.1 million new users across its operations in the last 12 months, bringing its active financial user base to 45.3 million.

($1 = 4.8733 reais)