The global financial crisis has taken its toll on Brazil’s insurance industry, according to Susep, the country’s insurance regulator. Susep projected in November 2008 that premium growth in Brazil would reach 16.2% in 2009. In light of the worldwide economic downturn, however, Susep recently reduced that figure to only 4.8%. Of note, the prediction made in 2008 was based on a predicted annual GDP growth of 3%, while the more recent figures are based on growth projected at only 1.5%.
Outside observers appear somewhat more optimistic, with some still predicting premium growth in the range of 7-10%. Such more favorable predictions are based in part on the expectation that premiums and contributions will grow slightly as a proportion of GDP to 3% this year, from 2.9% in 2008.
Previous posts have described moves by large Brazilian (re)insurers to secure foreign funding and cooperate with non-Brazilian entities in order to diversify their domestic business. But even as these innovative developments unfold, observers are wary of the condition of the Brazilian insurance market as a whole. Some analysts blame the market’s volatility on fluctuations in interest rates. But private pension, auto, and group life products still enjoy relative stability in their primacy over a majority of the domestic insurance market.
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