Brazil Insurance Report Q4 2011
Includes 3 FREE quarterly updates
For the world’s insurers, Brazil is bonanza territory. It is a large insurance market in absolute terms. The results from the various insurance companies for Q111 and H111 confirm that growth remains very rapid. The cconstraints that exist in Russia (eg: the absence of a life segment), India and China (eg: restraints on foreign players) are absent.
Brazil is also remains bonanza territory for investment banks that advise insurance companies in relation to very large deals. The strategic partnerships between Mapfre and Banco do Brasil and between Zurich and Santander (not to mention the longstanding partnership between Porto Seguro and Itau Unibanco) mean bank distribution is key to success. Sometimes that means buying it. Conversely, the Brazilian banks are imaginative enough to see that they can be better served by partnering with a foreign insurance giant rather than trying to develop their own insurance operations.
The key drivers of growth remain the expansion of the economy, the general improvement in perceptions of risk, the expansion of the numbers of households who need and can afford insurance, and rising corporate profits.
Brazil is possibly the only major insurance market in the world where the local banks, which are enormous by any metric, and global multinational insurers appear to be daunted by the opportunities. Recent deal making recognises the fact that about 40% of all insurance products are sold through banks and this amount may increase. The banks have trusted brands and huge branch networks. Global multinational insurers have access to capital and experience in product development. In both segments, we expect more bancassurance partnerships, product innovation and growth.
In the non-life segment, it appears that the growth will come in the short-term from the spectacular expansion of health insurance. ‘Elementary’ lines such as voluntary motor insurance (CASCO as it would called in continental Europe) are already characterised by fairly intense competition: premium growth is being driven mainly by the increase in the number of vehicles on Brazil’s roads. Compulsory motorists’ third-party liability (CMTPL) insurance is already a commodity that is sold through a consortium owned by the major companies that deal in that line. Over time, we would expect agricultural insurance and other commercial lines to grow strongly as well. Nevertheless, stability of non-life penetration and its already high level suggest to us that the absolute growth of the non-life segment will be driven by further GDP growth.
Life insurance is becoming a mainstream channel for organised savings and is being used by an increasing number of people. The demand exists and the suppliers have the branding, financial strength, distribution channels and necessary partnerships. There are fewer competing channels for savings in Brazil compared to other countries in Latin America (where private pensions are well established) or developed countries. Over time, growth will come from the expansion of the general pool of household savings. It will also come from innovative product development as customers look for alternatives to the long-established VGBL/PGBL and capitalizacao products.
For the world’s insurers, Brazil is bonanza territory. It is a large insurance market in absolute terms. The results from the various insurance companies for Q111 and H111 confirm that growth remains very rapid. The cconstraints that exist in Russia (eg: the absence of a life segment), India and China (eg: restraints on foreign players) are absent.
Brazil is also remains bonanza territory for investment banks that advise insurance companies in relation to very large deals. The strategic partnerships between Mapfre and Banco do Brasil and between Zurich and Santander (not to mention the longstanding partnership between Porto Seguro and Itau Unibanco) mean bank distribution is key to success. Sometimes that means buying it. Conversely, the Brazilian banks are imaginative enough to see that they can be better served by partnering with a foreign insurance giant rather than trying to develop their own insurance operations.
The key drivers of growth remain the expansion of the economy, the general improvement in perceptions of risk, the expansion of the numbers of households who need and can afford insurance, and rising corporate profits.
Brazil is possibly the only major insurance market in the world where the local banks, which are enormous by any metric, and global multinational insurers appear to be daunted by the opportunities. Recent deal making recognises the fact that about 40% of all insurance products are sold through banks and this amount may increase. The banks have trusted brands and huge branch networks. Global multinational insurers have access to capital and experience in product development. In both segments, we expect more bancassurance partnerships, product innovation and growth.
In the non-life segment, it appears that the growth will come in the short-term from the spectacular expansion of health insurance. ‘Elementary’ lines such as voluntary motor insurance (CASCO as it would called in continental Europe) are already characterised by fairly intense competition: premium growth is being driven mainly by the increase in the number of vehicles on Brazil’s roads. Compulsory motorists’ third-party liability (CMTPL) insurance is already a commodity that is sold through a consortium owned by the major companies that deal in that line. Over time, we would expect agricultural insurance and other commercial lines to grow strongly as well. Nevertheless, stability of non-life penetration and its already high level suggest to us that the absolute growth of the non-life segment will be driven by further GDP growth.
Life insurance is becoming a mainstream channel for organised savings and is being used by an increasing number of people. The demand exists and the suppliers have the branding, financial strength, distribution channels and necessary partnerships. There are fewer competing channels for savings in Brazil compared to other countries in Latin America (where private pensions are well established) or developed countries. Over time, growth will come from the expansion of the general pool of household savings. It will also come from innovative product development as customers look for alternatives to the long-established VGBL/PGBL and capitalizacao products.
Contents
Executive SummaryTable: Total Premiums, 2008-2015
Key Insights And Key Risks
SWOT Analysis
Brazil Insurance Industry SWOT
Brazil Political SWOT
Brazil Economic SWOT
Brazil Business Environment SWOT
Life
Latin America Life Sector Overview
Table: Latin America’s Life Premiums, 2008-2015 (US$mn)
Brazil Life Sector Update
Table: Life Insurance Premiums Breakdown, 2009-2010 (BRLmn)
Life Industry Forecast Scenario
Table: Life Premiums, 2008-2015
Growth Drivers And Risk Management Projections
Population
Table: Insurance Sector Key Drivers – Demographics, 2005-2015
Non-Life
Latin America Non-Life Sector Overview
Table: Latin America’s Non-Life Premiums, 2008-2015 (US$mn)
Brazil Non-Life Sector Update
Table: Non-Life Insurance Premiums Breakdown, 2009-2010 (BRLmn)
Non-Life Industry Forecast Scenario
Table: Non-Life Premiums, 2008-2015
Growth Drivers And Risk Management Projections
Macroeconomic Outlook
Table: Brazil Economic Activity, 2006-2015
Political Stability Outlook
Table: Latin America Security Ratings
Healthcare
Epidemiology
Table: Insurance Sector Key Drivers – Disability-Adjusted Life Years, 2008-2015
Motor
Table: Insurance Key Sector Drivers – Autos, 2008-2015
Insurance Risk/Reward Ratings
Table: Brazil’s Insurance Risk/Reward Ratings
Table: Latin America Insurance Risk/Reward Ratings
Competitive Landscape
Latin America Competitive Landscape
Major Players In Brazil’s Insurance Industry
Table: Insurance Companies By Gross Written Premiums, January-July 2010
Company Profiles
Local Company Profiles
Bradesco
Brasilveiculos
Itau Seguros
Porto Seguro
SulAmerica
Regional Company Profiles
BNP Paribas Cardif
CNP
Generali
HSBC Insurance
ING
Liberty Mutual
Mapfre
MetLife ALICO
New York Life
Prudential Financial
QBE
RSA
Zurich
BMI Methodology
Insurance Risk/Reward Ratings
Table: Insurance Business Environment Indicators And Rationale
Table: Weighting Of Indicators Skip to top