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Opportunities in Brazil Insurance Market
RNCOS E-Services Private Limited, Nov 2007, Pages: 75
The 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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