Unimed-Rio’s new business | capital

Custodio Coimbra

Unimed-Rio wants to go beyond health and dental plans and is launching a new business: Green, a brokerage that will sell from car insurance to civil liability policies for executives (D&O).

The new brokerage came from insurance that, occasionally, was already sold together with traditional health products of the cooperative, such as job loss protection insurance, according to Mario Salomão, general superintendent of Unimed-Rio.

— We saw that we already had a business in our hands that could be developed. It is an opportunity to generate additional revenue and increase our profit margin — adds Salomão. — And the idea is for it to work with a wide range of insurance, except those that would compete with Unimed-Rio itself. In other words, she will not sell health or dental insurance.

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Green’s product portfolio will range from home insurance to risk policies for portable and medical equipment, including environmental, life, pension, funeral and travel insurance, etc.

The group’s expectation is to generate at least R$ 15 million in insurance premiums in the first 12 months of operation.

— Our business plan foresees a generation of five, six million reais in revenue per year at the beginning of operations — estimates Salomão.

Challenge

Raising its profitability is one of Unimed-Rio’s main challenges, as noted yesterday by Fitch Ratings in a report. According to the risk rating agency, “Unimed-Rio’s low operating margins limit the company’s space to manage any volatility in its revenues during periods of greater stress in the operating environment.”

“Unimed-Rio benefited, in 2020, from an EBITDA (a cash generation metric) record of R$ 325 million, driven by the strong reduction in accidents, due to the suspension of elective surgeries during the first phase of the pandemic. However, the year 2021 should be impacted by higher expenses with hospitalizations and covid-19 treatments, by the resumption of elective care and by the negative adjustment of 8.19%, approved by the ANS, for individual plans”, added the agency.

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The projected EBITDA for this year should be negative by R$111 million. Fitch also predicts that the company should end 2021 with 789,000 lives in the portfolio, stable compared to 2020.

Green Corretagem de Seguros will be headed by executives Humberto Torloni Filho and Fernando Santoro. MDS Brasil, a subsidiary of a Portuguese multinational insurance consulting and management group, will manage the operating activities.