Brazil reinsurance market cracked open

Forget China and India, Brazil is a fast growing market whose potential is actually being realised now by reinsurers. It has been a bumpy road, with confusing signposts and diversions placed in the way by successive governments, but Brazil is finally open for reinsurance business – and there is plenty to go around.

The simple facts are that Brazil is the biggest insurance market in South America, it has the largest population in the region and its economy is in the global top 10 in terms of GDP. At the same time it has low but steadily growing insurance penetration among a burgeoning middle class.

Against this fertile background the insurance market is growing at a rate of around 15% year on year. Serving a non-cat exposed market, the domestic industry’s combined ratio was 91.3% in 2010 and 95.3% in 2009. The primary market’s return on equity was an impressive...