MICROCAPITAL STORY: Zurich Bolivia and Microfinance Bank BancoSol To Offer Life Insurance To Bolivian Emigrants

Zurich Bolivia, a unit of Zurich Financial Services, and the microfinance bank BancoSol of Bolivia have partnered to offer insurance to Bolivian emigrants in Spain. The insurance comes in four different plans. The first plan, requiring a premium of USD 57, covers 10,000 dollars in case of death due to any cause and the return of the body to Bolivia. The second plan, requiring an annual premium of USD 86, offers the same benefits, as well as home expenses for the family for one calendar year. The third plan, requiring a premium of USD 100, covers the return of the body to Bolivia and the cost of education for two children up to USD 300 per year per child. The fourth plan, requiring a premium of USD 129, includes all of the above benefits.

Bolivian emigration to Spain has been growing in recent years. In 2008, 239,942 Bolivians immigrated to Spain. In 2001, the figure was only 6,619. However, Bolivia ranked 6th behind Romania, Morocco, Ecuador, the UK, and Colombia in terms of number of immigrants to Spain. According to the CIA World Factbook, the Bolivian national GDP was estimated at USD 43.08 billion in 2008 with a real growth rate of 5.6 percent. GDP per capita was USD 4,500. Services constituted 51.8 percent of GDP, with agriculture at 11.3 percent and insdustry at 36.9 percent. However, 43 percent of the labor force was employed in services, 40 percent in agriculture, and 17 percent in industry. The unemployment rate was 7.5 percent in urban areas.

In contrast, the GDP of Spain was estimated at USD 1.38 trillion in 2008 with a real growth rate of 1.1 percent. GDP per capita was USD 34,600. Services constituted 67.5 percent of GDP with agriculture at 3.6 percent. 69.5 percent of the labor force was employed in services. In 2008, the unemployment rate was very high, at 13.9 percent.

BancoSol, officially Banco Solidario, was founded in 1986 as an NGO and became a commercial bank in 1992. As of December 2007, 75 percent of borrowers had microenterprise operations valued at less than USD 5,000. In December 2008, past due loans accounted for 0.81 percent of total loans. BancoSol has a network of about 100 branches, with most branches in Bolivia and one in Spain. According to the MIX Market, the microfinance information clearinghouse, BancoSol serves 161,626 borrowers and maintains a gross loan portfolio of USD 294.3 million. Total assets stood at USD 381.5 million. The debt/equity ratio was 1,245.29 percent and the return on assets, 0.71 percent. A 2007 annual report from BancoSol is available here.

Products and services of BancoSol include microloans, microinsurance, wire transfers, debit cards, and warranties. The average microloan at BancoSol is USD 1,700. Loan terms range from 1 to 60 months as well as 120 months for housing loans. In 2007, annual interest rates ranged from 12 percent to 22 percent. BancoSol has partnered with Zurich Bolivia earlier on its microinsurance products. Zurich Bolivia launched its credit life product, SolSeguro, with BancoSol in 1999. In 2006, Zurich Bolivia and BancoSol launched the health insurance products SolSalud and SolSalud Plus. Details of the products can be found here.

The group Zurich Bolivia, is comprised of three Bolivian companies. La Boliviana Ciacruz de Seguros y Reaseguros specializes in material insurance. Zurich Boliviana Seguros Personales offers personal insurance, including life insurance. AFP Futuro de Bolivia offers pension services. Zurich Bolivia became a unit of the Zurich Financial Services Group in 2000. The Switzerland-based Zurich Financial Services was founded in 1872 and operates in 170 countries. The main divisions include General Insurance, Global Life, and Farmers, the United States´ third-largest personal property and casualty insurer.

Additional Resources:

“Zurich Bolivia y BancoSol crean un seguro para emigrantes”, Published By Opinion.Com.Bo, June 2009 (in Spanish)
“BancoSol, Zurich Unit Team Up To Offer Insurance For Emigrants”, Published by BN Americas, May 2009
BancoSol: Home
Zurich Bolivia: Who We Are (in Spanish)
Zurich Financial Services: Home
“Zurich Bolivia: Partnerships for Success”, By Craig Churchill and Hugo de Grandchant, Published by Zurich Financial Services
Wikipedia: Immigration to Spain
CIA World Factbook: Bolivia
CIA World Factbook:Spain
“Annual Report 2007”, Published by BancoSol
MIX Market: BancoSol