2013-12-12 15:41:43 - New Financial Services market report from Business Monitor International: "Brazil Insurance Report Q1 2014"
As of late 2013, the major trends that make Brazil one of the most exciting and dynamic insurance markets globally remain intact. Thanks to the steady fall in interest rates to 2012, the general improvement of perceived macro-economic risks and commercial initiatives by the insurance companies themselves, premiums are growing rapidly: this is at a time that leading players in both the non-life and the life segments are achieving high levels of profitability. Over the medium-term the only constraint on growth will be insurers' ability to raise capital to support their businesses.
To a greater extent than their counterparts in other large emerging markets, the Brazilian majors are ready to undertake (very) large scale corporate deals. Bank distribution accounts for about
40% of all insurance sales in the country and, as such, is often a key to success: this explains the strategic partnerships between Zurich and Santander and between MAPFRE and Banco do Brasil (now the listed BB Seguridade Participacoes SA), as well as the long-standing commercial links between Porto Seguro and Itau Unibanco. The banks have the imagination to recognise the opportunities that are available from 'open architecture' - the distribution of products that are sourced from unrelated suppliers. However, we also stress the various players are taking active and positive steps to develop their own brands, to invest in platforms and systems, to improve underwriting and profitability and to introduce new products.
Full Report Details at
Collectively, the composite insurance groups which dominate Brazil's insurance sector were upbeat about how their operations performed in 2013. In the life segment, premium growth continued strongly in spite of the rising interest rates environment and the occasional volatility in financial markets. In the non-life segment, some companies achieved only single digit growth in particular lines: this was usually as a result of deliberate corporate policy to focus on profitability ahead of premium growth. Given the large numbers of uninsured cars, houses and, in relation to possibly substantial private healthcare expenses, people, the increase can continue at double digit rates.
As noted above, it is possible to identify many growth drivers that result from the nature and decision-making of the suppliers of insurance products. It is also possible to see many demand-related factors that will drive premiums higher. Life insurance is clearly developing rapidly as a conduit for organised savings in Brazil. Auto-related insurance lines are growing, although we would expect prices and rates to be under downwards pressure for much of the forecast period. Penetration appears to be rising as a result of construction (both residential and non-residential). Most crucially, increased private spending on healthcare means that health premiums - already the largest component of the overall insurance sector - will achieve steady rises over the coming five years.
Report Table of Contents:
BMI Industry View
- Table: Total Premiums, 2010-2017
- Business Environment
- Table: Total Life Premiums 2010-2017
- Non Life
- Table: Non Life Premiums, 2010-2017
Industry Risk Reward Ratings
- Brazil Insurance Risk/Reward Ratings
- Table: Brazil's Insurance Risk/Reward Ratings
- Latin America Insurance Risk/Reward Ratings
- Table: Latin America Risk/Reward Ratings
- Life Sector Update
- Non Life Sector Update
Industry Trends And Developments
- Life Growth Drivers And Risk Management Projections
- Table: Insurance Key Drivers, Demographics 2010-2017
- Non Life Growth Drivers And Risk Management Projections
- Macroeconomic Outlook
- Significant Headwinds To Weigh On Growth In 2013 And 2014
- Table: Brazil - Economic Activity
- Political Stability Outlook
- Table: Latin America Security Ratings
- Table: Insurance Key Drivers, Disease Adjusted Life Years 2010-2017
- Table: Insurance Key Drivers, Autos 2010-2017
- Brazil Competitive Landscape
- Latin America Competitive Landscape
- Bradesco Seguros
- BB Seguridade Participacoes SA
- Itau Seguros
- Porto Seguro
- Latin America Life Sector Overview
- Table: Latin America Life Premiums, 2010-2017 (US$mn)
- Latin America Non Life Sector Overview
- Table: Latin America Non Life Premiums, 2010-2017 (US$mn)
- Table: Brazil's Population By Age Group, 1990-2020 ('000)
- Table: Brazil's Population By Age Group, 1990-2020 (% of total)
- Table: Brazil's Key Population Ratios, 1990-2020
- Table: Brazil's Rural And Urban Population, 1990-2020
- Industry Forecast Methodology
- Risk/Reward Rating Methodology
- Table: Insurance Risk/Reward Ratings Indicators
- Table: Weighting Of Indicators
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