Online insurance: everything to play for

This is my second short on insurance.

Brazil’s online market looks like it could be fillet mignon for foreign insurers who understand this segment and are willing to deal with Brazil’s labyrinthine bureaucracy.

First, the retail insurance market is growing fast and online is pitifully underdeveloped segment: growth in policies is in double digits but online sales account for less than 1% (compared to more than 50% in the UK). McKinsey polled 4,500 Brazilians of whom 20% said they would “certainly” buy online. A further 50% said they would "very probably" buy online

Second, so far just price comparison is a new idea. There are a host of sites struggling to get their brand recognized and fighting and insurers are moving online gingerly. The arrival of larger players - as rumoured - could shake the price comparison market up, though. Finally, the government is determined to get more coverage for poorer Brazilians through micro insurance and has just licensed the first project – this is a price-sensitive audience to whom online appeals.

The first Brazilian challenger for pure online sales has recently arrived. has hired some heavy hitting consultants and has a successful and lucrative travel insurance business. It is now moving into auto. I talked to Renato Spadafora Ferreira, the COO, reckons they could get 1m customers in five years and 15% lower prices.

I have also been looking at some of the legal obstacles, especially connected to the use of brokers under Brazilian federal and state law. Initiatives that call for the physical presence of a broker at transaction time hang over the market like a dark cloud…

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About admin

I've been researching and writing on Brazilian financial markets, industry and economy since 2006 for a wide range of specialist media, consultancies and investors. Before that I spent over 10 years in London and New York writing for and editing magazines and journals dedicated to finance, investment and economics in developing markets, mostly for the Euromoney Institutional Investor group and Thomson Financial. Areas of coverage Below are samples of areas that I cover and some of the common themes that I investigate. Capital markets BM&FBovespa markets *capital raising trends: via equities (IPOs and secondary issuance), debt and loans *the asset management industry: legislation and coverage of the key hedge, pension and investment funds * corporate governance: how the regulator is seeking to strengthen best practice and limitations * debt markets: the nascent corporate markets, attempts to boost liquidity and new insturments. * private equity market: why this market has been so successful, who’s involved. *electronic, high frequency trading and alternative trading platforms: what does the future hold? Banking *credit: the growth of consumer and business credit and competition between banks and models *Public versus private: the role and market share of public and private sector banks and the politicization of the industry * internationalization: which Brazilian banks are expanding overseas and where * investment banking: the growth of the domestic market and who’s winning which mandates *regional banks and development banks: what role they play in the industry and how they compete Mining *licensing: the complex process of obtaining environmental, water, land and operating licenses at a state and federal level. * capacity: the feasibility and sustainability of capacity increases * financing: how miners are raising finance in Brazil and abroad *competition: the interplay Vale, MMX and junior miners *logistics: rail, road and port connections Oil and gas: the fund raising issues related to the massive of pre-salt (link) Multilatinas: Who are they and how and where they are expanding Meatpacking: Are debt burdens sustainable, what are the different business models for areas such as branding and distrbution Agriculture: How are farms consolidating, what are environmental risks, how can foreign investors be involved. IT and software: Can Brazil take on India and build a viable long-term IT industry? For more information on clients and work, please see the media and consultancy sections.
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