"Brazil Insurance Report Q2 2016" is now available at Fast Market Research

In spite of a very difficult economic environment, Brazil remains a market that is both large in absolute terms and, in relation to the forecast period, reasonably quickly growing. We continue to forecast solid high mid-single digit annual growth in premiums in both of the two main segments. Health insurance will drive the expansion of the non-life segment. In the life segment, additional sales to existing clients will be the main catalyst for growth.

Key Updates And Forecasts

The latest results from the leading non-life companies (in relation to 2015) indicate that the slowing of the economy has had a limited impact on the segment. We forecast 7.0% growth in premiums in 2016. The pace of increase should be broadly similar for the remainder of the forecast period. The key driver is the expansion of health insurance (including the offerings of the composite insurers that are regulated by SUSEP and the specialist health funds that are overseen by the ANS). Health insurance is benefiting from growth in volumes, thanks to first time users, and higher prices, which can be sustained because of the high level of inflation. The growth of basic motor vehicle and property lines will continue to be constrained by price competition.

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We forecast growth of 7.1% in life premiums in 2016. The growth rate should decrease slightly over the course of the forecast period, but will still be in mid-single digits in 2020. Many of the major life insurers have reported good increases in sales of their main products - VGBL and PGBL savings plans, Capitalizacao bonds, private pensions and traditional life insurance over the course of 2015. This means that the insurers' offerings are considered attractive by those Brazilians who can afford to buy them. At some stage, at least some of the life insurers should benefit from sales to large numbers of new users. However, we expect that this will happen after the end of the forecast period.

In summary, the difficult economic conditions have had a mixed effect on the sector as a whole. At the margins, property insurance sales in the non-life segment are lower than they otherwise would have been (and the drought has taken a toll on the sale of crop insurance). Conversely, high inflation and interest rates have boosted the appeal of some of the life insurers' offerings. In the global context, Brazil remains a large market for insurance and one that is growing quite rapidly.

The Brazil Insurance Report has been researched at source and features BMI Research's independent assessment and forecasts for the insurance sector. It examines industry developments, key growth drivers and risk management projections, including the macroeconomic situation, government policy, regulatory environment and the level of development and potential for growth, broken down by line. Leading insurers are profiled, covering premiums, products and services and competitive positioning.

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