Abstract
The RNCOS report on "Opportunities in Brazil Insurance Market" provides
extensive research and in-depth analysis on the insurance sector in Brazil. It
helps clients to analyze the leading-edge opportunities critical to the
success of the insurance industry in the country. Detailed data and analysis
helps clients navigate the evolving insurance markets of the region.
The forecast given in this report is not based on a complex economic model,
but is intended as a rough guide to the direction in which the market is
likely to move. This forecast is based on a correlation between past market
growth and growth of base drivers.
Market Analysis
A large population makes Brazil the biggest potential insurance market in
Latin America, ahead of Mexico and Argentina, but despite the rapid growth in
the past three years (2004-2006), its population remains underinsured. There
is considerable vertical integration between the insurers and the banks. Most
of the larger banks, such as Banco Bradesco and Unibanco, offer a full range
of insurance services. Insurance companies, like financial institutions,
invest heavily in government securities and have little exposure to the
volatile equity market.
Driven by a strong rise in purchases of life insurance, which is reflecting
strengthening real incomes and increased confidence in macroeconomic
stability, the Brazilian insurance market has been expanding rapidly since
2003. Overall, the market remains small, with total premiums accounting for
just over 2.8% of GDP in 2006.
Key Findings
- Brazilian Life and Retirement Savings market, in premium terms, is
expected to grow at the compounded rate of 18.89% during 2007-2011.
- Automobile insurance is anticipated to grow at the compounded rate of
14.16% during 2007-2011, while Health insurance sector is projected to grow at
a CAGR of nearly 13% for the period spanning from 2007 to 2011.
- Homeowner insurance is projected to grow at the CAGR of nearly 14% from
2007 to 2011, mainly due to continuous declining interest rates in Brazil.
- Of the total premium income, general insurance accounted for almost
one-half and automobile insurance accounted for one-third total premium
income in 2005.
- There are ample opportunities for the IT sector as total spending on this
sector by insurance sector is projected to grow at the compounded rate of
14.42% during 2007-2011.
- The liberalization of reinsurance market will lead to rise in FDI.
- Brazilian insurers prefer mutual funds as investment instrument.
- "Capitalization" is a unique product with Brazilian insurers which
combines savings with the National Lottery.
- Bancassurance is the dominant distribution channel for individual life
insurance, retirement savings, and capitalization products.
Key Issues & Facts
- What are driving factors for the insurance industry (life and non-life
insurance) in Brazil?
- How is the growth in retirement savings and automobile insurance driving
the insurance sector?
- What are the emerging opportunities and challenges for the industry
players?
- What are the most prospective areas for investments in the insurance
sector in near future?
- Who are the key players in the Brazilian insurance market?
Research Methodology Used
Information Sources
Information has been sourced from books, newspapers, trade journals, and white
papers, industry portals, government agencies, trade associations, monitoring
industry news and developments, and through access to more than 3000 paid
databases.
Analysis Methods
The analysis methods include ratio analysis, historical trend analysis, linear
regression, analysis using software tools, judgmental forecasting and cause
and effect analysis.
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