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MercadoLibre's (MELI) Life Insurance Move to Boost Fintech Reach

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MercadoLibre (MELI - Free Report) continues to make strong efforts to bolster its presence in the fintech world on the back of its robust Mercado Pago.

This is evident from its latest offering of life insurance via Mercado Pago in Brazil.

Customers purchasing the life insurance will be able to include hospital coverage, telehealth services, dental emergencies and even funeral expenses in their plans.

The life insurance product through Mercado Pago costs from $1.91 to $14.05 (9.90 reais to 73 reais).

The company also intends to introduce a personal accident insurance product in the next two months.

Move to Benefit

We note that the insurance offering is likely to aid MercadoLibre gain momentum among customers in this data-driven world, where the online sale of insurance products is growing constantly.

The latest move positions the company well to penetrate the booming life insurance market of Brazil, which, per a GlobalData report, is likely to witness a CAGR of 7% between 2021 and 2025.

The latest move is likely to contribute well to the company’s revenue generation from Brazil.

Notably, Mercado Pago contributed 45% MercadoLibre's Brazil revenues in first-quarter 2022.

Mercado Pago in Focus

The offering of life insurance bodes well for the company’s growing efforts to strengthen Mercado Pago.

It is worth mentioning that Mercado Pago forayed into the insurance market by selling extended warranties for electronics and cell phones. It also started offering Brazil's Pix payment system theft protection in 2021. Coming to numbers, it has sold more than 1 million policies across the two products to date, which is a major positive.

Apart from this, the recent buyout of a Chile-based payment services provider named Redelcom, which is now part of Mercado Pago, remains noteworthy.

The growing initiatives to strengthen the credit business for individual and merchant users via Mercado Pago are other positives.

All these endeavors are likely to continue boosting the adoption rate of Mercado Pago, which will drive growth in the total payments volume (TPV) and the top line of Mercado Libre.

Notably, TPV increased 72% year over year to $25.3 billion in first-quarter 2022. This was driven by the strong performance of Mercado Pago.

Hence, we believe that the above-mentioned efforts will instill investor optimism in the stock. MercadoLibre has lost 48.2% on a year-to-date basis.

Zacks Rank & Stocks to Consider

Currently, MercadoLibre carries a Zacks Rank #3 (Hold).

Investors interested in the retail-wholesale sector can consider companies like and AutoNation (AN - Free Report) , Kroger (KR - Free Report) and Arcos Dorados (ARCO - Free Report) . While AutoNation and Kroger sport a Zacks Rank #1 (Strong Buy) at present, Arcos Dorados carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.

AutoNation has lost 3.8% in the year-to-date period. The long-term earnings growth rate for the AN stock is currently projected at 24.7%.

Kroger has gained 5.4% in the year-to-date period. The long-term earnings growth rate for the KR stock is currently projected at 11.4%.

Arcos Dorados has gained 19% in the year-to-date period. The long-term earnings growth rate for the ARCO stock is currently projected at 34.4%.