Bolivia aims to 'break monopoly' with state-run life insurer

Bolivia's socialist government is aiming to "break the monopoly" of private sector insurers through a new state-run life insurer.

The government unveiled UNIVida on Thursday with the aim of offering affordable life insurance products to the country's millions of poor.

UNIVida is the first state-owned insurer to enter the life insurance market and the "monopoly" that private insurers have enjoyed for many years has led to high prices and very little insurance penetration, local daily La Razón reported economy and finance minister Luis Acre as saying.

The insurer will change the market by offering personal insurance policies that are on average 20% cheaper than those of private companies, said Marcia Villarroel, general manager of state lender Banco Unión. The bank is the main shareholder in UNIVida and Villarroel sees great potential in cross selling insurance products to the bank's clients.

The cheapest policy will cost only 30 Bolivianos (US$4.36) a month. Villarroel cited a market study showing that only 4-5% of Bolivians are insured.

UNIVida will offer individual, group and credit life as well as personal accident and retirement policies.

The government will also create the country's first P&C insurer later this year, the report said.

Picture: capital La Paz.

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