The opening of the Brazilian reinsurance market is redefining relations between local and international players. Insurance buyers need to take advantage of on-the-ground knowledge and contacts, but also leverage the reach and expertise of international brokers.
Brazil’s giant insurance and re-insurance market has been prised open slowly and unevenly. In 2008, the state reinsurance monopoly was opened to private competition. Average growth of about 13 per cent a year had already increased the size of the insurance sector to 4 per cent of gross national product (GNP), making a monopoly unwieldy, says Elias Silva, Coordinator of the Petrol Risks Group at JLT in Rio de Janeiro.
Today, the market is a hefty R$66.5 billion ($32.8 billion). Brazil, already enticing thanks to a population of 200 million and strong economic growth, has been made more attractive by the opening market. Indeed, that high level of economic growth has enticed in more players and sharpened competition, which in turn has continued to push down rates and deductibles. Michelle Oliveira, an associate in the construction and real estate division at JLT Specialty in London, refers to “a booming economy that we have never seen before in Brazil.