Country’s $2.7bn reinsurance sector continues to expand

Growth prospects for the Brazil insurance market’s non-life segment remain positive, driven by continued government spending on major infrastructure projects, two upcoming global mega-events and momentum from recent economic growth, according to a new report from AM Best.

Non-life premium increased 16% to BRL47.5bn ($25.3bn) in 2011, according to the Superintendence of Private Insurance (SUSEP).

That amount comprises 45% of the BRL105bn in total premium generated last year in Brazil’s insurance industry, which has averaged annual growth of 16% over the past three years.

Continued demand from a growing middle class, abundant natural resources and the country’s host role for the 2014 FIFA World Cup and 2016 Olympic Games are catalysts for continued public and private-sector investments, all of which point to a positive growth outlook for the insurance industry’s non-life segment.

As overall industry premium grows, the non-life segment’s share has declined from 70% in 2002.

Brazil’s direct market included 112 active insurance companies as of February 2012, according to SUSEP. The commercial lines segment has shown signs of broadening as insurance buyers gain more appreciation for business-related products and specific segments continue to grow.

Brazil’s BRL5.7bn ($2.7bn) reinsurance segment continues to expand under an open-market system enacted five years ago, but that competitive dynamic has been shaped further by regulation that prompted international carriers to establish local reinsurance operations.

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