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Selling life insurance far from home: Leonardo Lerer of Brazil

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In conjunction with the “Far from home” feature appearing in the January 2013 print issue on life insurance sales in emerging market countries, NUL Senior Editor Warren S. Hersch questioned insurance professionals from several of these nations about their practices. The following are written responses from Leonardo Lerer, a partner at Lerer Life Corretagem de Seguros (Lerer Life Brokers), based in Rio de Janeiro, Brazil.

Hersch: How would you describe your life insurance/financial service practice? What are your areas of expertise? Whom do you serve?

Leonardo LererLerer: I work with individual life insurance acting as a consultant analyzing revenues, expenses, responsibilities, future projects and dreams. I take into consideration the family structure and the revenue income division of the family. All of this is through a worldwide recognized company with an official headquarters in Brazil.

Hersch: How would you assess the current market for life insurance and annuities in Brazil? Is the market growing or contracting? Why?

Lerer: The Brazilian life insurance market is booming, with a growth rate around 20 percent annually. As part of the Brazilian economic stabilization, there was an improvement on most of the population’s income.

As a result, a relevant part of that population that had no access to this kind of product due to lack of resources is now entering into this market. The local insurance companies are aware of this momentous time and the new products that are being launched, which makes this market extremely attractive.

Hersch: Which life insurance and annuities products are selling well in your practice? Why?

Lerer: Insurance companies recently launched their annuity products in Brazil. Some are still waiting for regulatory (SUSEP) approval. In the coming years I think we are going to see great growth in the popularity for these kinds of products.

Hersch: Which life insurance-funded techniques (to be used, for example, in estate planning, business succession planning, executive compensation planning or retirement planning) are especially popular among your clients? Why?

Lerer: The reality is that 90 percent of private companies are family-owned in Brazil. Management is generally passed from father to son. However, if there is a loss of the main executive and the successor is not ready yet, a non-qualified person typically assumes control of the company.

In Brazil, less than 10 percent of family businesses survive for a third generation. To my clients, I suggest an insurance product that focuses on company succession planning. That product allows the company to keep moving without financial losses and gives peace of mind to the family of the owners.

Hersch: What regulatory, legislative and business challenges do you face in Brazil? How do these challenges affect your practice?

Lerer: There is a long delay for changes to occur in Brazil because we are waiting for legislation or even the analysis of a regulator, which causes new product launches to take longer than expected.

Hersch: How are you adapting your practice to meet these challenges and grow your business?

Lerer: I’m always studying and reading everything that comes out regarding the insurance market. I also try to keep in contact with my clients and periodically visit them. This closeness allows me to propose a product that I think fits their reality. This is a day-by-day job that builds trust and respect. Hersch: What financial goals and objectives have you established for your practice in 2013? How confident are you that you can reach these goals and objectives?

Lerer: One of my goals is to raise my annual net income by 10 percent. To achieve that, I’m working with my own clients, sons of clients who have attained the minimum age permitted in Brazil to have life insurance (14 years old), listening to new recommendations and helping companies with their succession planning.