Dr Maria Marques looks at the implications of an open Brazilian market.
The Brazilian Reinsurance institute (Instituto de Resseguros do Brasil SA – IRB) was founded in 1939 and is jointly owned by the insurance companies that are licensed to do business in Brazil (non-voting shares) and by the Government of Brazil (voting shares).
For more than 70 years all reinsurance business has been transacted via the IRB. But this is about to change. January 2008 marks the start date of the transition to an open market.
A milestone of this process was the sanctioning of the Complementary Law N° 126 that regulates the reinsurance market. This effectively opens the reinsurance market to competition and has renewed and heightened interest both of foreign reinsurers and local financial groups.
“The proposed legislation is an excellent start, but significant work still needs to be done
Dr Maria Silvia Bastos MARQUES, CEO and president of Icatu Hartford Seguros.
The proposed legislation is an excellent start, but significant work still needs to be done to refine the final document in order to attract key players and facilitate a competitive market.
After this phase is complete, the next decision will be for reinsurers to decide in which Brazilian city to establish their headquarters.
The front runners at the moment are Rio de Janeiro and São Paulo. The decision is fundamental since it’s likely that a reinsurer’s Brazilian office may develop into being its regional centre for Latin America.