Fitch recently released a report on the Brazilian insurance market that balances general bad news about the Brazilian economy with reasons for continued optimism as to the country’s insurance industry. The report found that, despite an expectation of continued negative pressure from the struggling economy in the near-term, continued low insurance penetration rates (3.5% of GDP in the first four months of 2009) combined with relative economic stability, a growing consumer class and the opening of the reinsurance market indicate that the insurance market has substantial potential for growth in the coming years.
In other Brazilian (re)insurance news, IRB-Brasil Re followed up on its recent release of three new health reinsurance products (see here), with an announcement that it intends in the near future to release new products in the areas of credit, D&O, energy and mortgage lending, as well as to expand its agricultural reinsurance offerings. Asked about the recently released health products during an interview with BN Americas, Eduardo Nakao, CEO of IRB-Brasil Re, reportedly stated that “IRB understands that it’s natural to lose relative market share, given the entrance of new competitors, but [it] can’t ignore the growth in [the personal lines] segment, which comes as a result of better income distribution and pent-up demand for some products.”
The beneficiary of a government-imposed monopoly on the reinsurance market until April 2008, IRB-Brasil Re maintained a 90% share of the local reinsurance market in 2008, which share decreased to just over 80% in the first five (5) months of 2009 (for more, click here).