ParaLife Project The project involves the creation of a greenfield life insurance/reinsurance company called ParaLife (the project or the company), targeted at the disabled and sub-middle class populations in a number of countries in Latin America, starting with an initial launch in Mexico.  

Under the current proposal, the project aims to provide life insurance to disabled people and the individuals who provide their means of support (i.e., family members and/or sources of financial support) in the form of a simple 5 year single premium term insurance product with a savings option.  Following the findings of the feasibility study, the project design was expanded to also include an additional product providing term life cover purely to the non-disabled members of the family, and more generally to the sub middle class segment of the population through a distribution network involving disabled associations and communities, insurance distributors operating in the low income sector, micro-finance organizations and commercial banks (currently, through HSBC in Mexico).  The primary focus, however, remains on the disabled community, both on the insured side as well as developing the same disabled community for distributing the products.

The project focuses on a presently underserved and untapped market: people with disabilities, their family members and other people in the low income and poor sectors of the population. The disabled sector is not generally served in developing markets. The market study concluded that 50% of the disabled population would qualify for the life insurance products that Paralife is proposing, both in terms of their ages and types of disability. Including members of their families, the maximum total client potential for the Company could be up to 20% of a countrys total population, and up to 30% of total country population including the low-income segments.  These markets have been largely ignored by the life insurance and savings industries and, in the target countries under review, no products similar to Paralifes are presently available on the market.  Traditional insurance companies have not entered the micro-insurance field because of the perceived lack of purchasing power of the low-income segments and the cost of conventional distribution   

Another important element of the project design involves the use of Foundations (Paralife Foundations), intended to provide funds for the educational programs for people with disabilities to prepare them for employment and entrepreneurship, as well as to train them to distribute the Paralife products. These Foundations are also designed to provide subsidies for the financing of the insurance premiums to the segment of the disabled population who do not have the necessary financial means.  The Mexican Government has already agreed to participate financially in the implementation of the Foundations, through cost-sharing of the training component.  Paralife Holdings intends to contribute 10% of its net profits to the Foundations, and seek additional funding from philanthropist and other charitable organizations, such as the Gates Foundation. 

Paralife intends to commence operations in Mexico by year-end 2006, followed by Venezuela and Colombia within 12 months hence.  If the project concept is successful and the markets are viable, Paralife intends to replicate the business model regionally in Latin America, and is considering further expansion in parts of Asia and Africa over the longer term. This project will have a very high development impact by creating a new type of institution that does not currently exist in most developing countries. Paralife will bring life insurance and associated good return savings products to the poor and disabled communities that have previously been ignored by the main stream insurance industry.  Paralife, through working with the disabled and local communities, will also provide training and employment opportunities for the disabled through participation in the sales and distribution of the products.