With the Hispanic population growth in the U.S. expected to rise significantly over the next few years, many U.S. businesses have built marketing strategies around this emerging demographic group. Web insurance marketplaces are no exception.In July, a group of Miami-based entrepreneurs launched a Web insurance marketplace that organizers say is targeting "the 486 million Spanish- and Portuguese-speaking individuals and businesses living in the U.S. and Latin America."

The site-FuturoSeguro.com-enables users to research and obtain insurance products and services through multiple carriers. By logging onto www.futuroseguro.com, a Hispanic consumer or business owner can quote, purchase and bind full or supplemental accident, travel and health insurance policies online.

Choosing from the product lines of eight insurance carriers-among them Ace International, The Assurant Group and The Hartford-users can communicate online in Spanish, Portuguese or English.

Industry observers say FuturoSeguro.com reinforces the trend that's witnessed the steady growth of niche-driven insurance marketplace sites.

"This idea seems to be similar to what InsWeb is doing with InsWeb Japan," says Todd Eyler, senior analyst with Forrester Research Inc., Cambridge, Mass., referring to the Redwood City, Calif.-based insurance marketplace.

Daunting challenge

Similar to InsWeb Japan, FuturoSeguro.com, Eyler believes, faces a heady challenge in convincing a specialized group of users that its franchise holds a distinct advantage over the competition in the way of price, service and convenience. "As a rule, a niche-driven Web site will not thrive just because of a narrowly-focused strategy," Eyler stresses.

FuturoSeguro.com was hatched last year when founder and current co-director Loreyne Alicea recognized a need for an insurance Web site directed specifically at Hispanic consumers.

Alicea's rationale was that there has been a steady increase not only in the U.S. Hispanic population, but the volume of Hispanics that are regularly using the Internet.

Many Hispanics have adopted American cultural values-and can easily log onto any number of mainstream Internet marketplace to research insurance needs. Moreover, there is a growing wave of Hispanics that are gravitating to Web sites tailored to their cultural needs.

Alicea, along with Michael Farmer, the company's president and director, had been an executive with American Express' Global Network Services. Farmer honed his skills in both financial services and technology, while Alicea held management positions at American Express and at New York-based American International Group (AIG), where she led all areas of insurance direct marketing.

Targeted audience

The partners arrived on a name for the online venture-FuturoSeguro, which translated in English means "security for tomorrow."

"We're targeting educated middle-class Hispanic consumers who find value in a Web site skewed toward their own culture," Farmer states. "Even though it's not an immediate priority, we could eventually expand the market base to include non-Hispanics who are simply seeking a more convenient way to research insurance."

FuturoSeguro.com's distribution system is predicated in part on third-party alliances forged with Hispanic businesses and institutions-such as banks and sporting clubs, Farmer explains. FuturoSeguro enables a financial institution, for example, to offer their customers private-label products on their proprietary site, as well as providing a link back to their site from www.futuroseguro.com. Carriers pay FuturoSeguro a fee based on policies sold.

The company has set its gaze abroad-to Latin American markets such as Chile, Brazil, Argentina, Peru, Ecuador and Mexico.

"The Web does represent great potential in Latin America since there are only about 12 million Internet users. But that number is projected to rise to 35 million by 2002," Farmer states.

The entrepreneurs started the company with $1 million in private financing. To provide the technology and marketing tools to empower the program, FuturoSeguro is in negotiations with a group of institutional investors to generate an additional $3.5 million.

Cost-containment is critical to FuturoSeguro.com's success.

"The expense for technology alone, such as what it would take to build a quoting platform, can usually range from $10 million to $20 million," Eyler insists. "I'm curious how a Web marketplace can operate on such a low technology budget and be self-sufficient."

FuturoSeguro.com, Farmer says, has contained its technology costs by avoiding the burdensome investments to construct a quoting platform. While the technology enables connectivity between a carrier's legacy system and FuturoSeguro's Web server host, the program is not as technologically sophisticated as other Web-based insurance sites.

"Rather than building these sophisticated quoting platforms, we operate under a technology strategy that is more modest, but still flexible," Farmer explains.

Eyeing the competition

Time will tell if a culturally specific Web presence can withstand the test of competition. Even its narrowly defined focus isn't an automatic guarantee for success, Eyler says.

"In three months, Hispanic consumers may discover that Charles Schwab now offers products on the Web skewed to their specific needs," Eyler notes. "One thing that affinity Web providers should never do is underestimate the power of global financial services to effectively fill a niche-market need."

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