The Brazilian insurance market has been growing in recent years. Data published by the insurance regulator, SUSEP (Superintendence of Private Insurance), indicates total revenue from written premiums for the property and casualty market, considering the segments in which SulAmérica operates, not considering VGBL plans, reached R$76.5 billion in 2018, a growth of 7.4%. Considering VGBL plans, the insurance market reached R$174.1 billion in written premiums, a decrease of 2.1% in relation to 2017. Auto insurance represented a significant portion of revenue, with a share of 45.4% in total written premiums according to data provided by SUSEP (not considering VGBL plans). The supplementary health insurance market, according to data provided by the ANS (National Agency of Supplemental Health) for the year of 2018, had total revenue of R$195.6 billion, which represented a growth of 9.1% compared to 2017.
The Brazilian economic stability achieved over recent years has provided significant growth in all lines of the insurance sector, even with a challenging macroeconomic scenario. The insurance revenue in Brazil is mainly generated from the sales of the following lines of insurance: (i) auto; (ii) other property and casualty; (iii) health; and (iv) life and personal accident.
Despite the strong growth in insurance premiums observed over recent years, the Brazilian insurance market penetration as compared to the rest of the world is still low, according to the “Sigma” report # 03/2018, released by the reinsurer Swiss Re. The data provided in this report shows that the insurance premium-to-GDP ratio was 4.1% in 2017 while the worldwide average over the same period was 6.1%. The current penetration ranks Brazil number 40 in the world in 2017.
Currently, the main products offered in the Brazilian market by private pension or insurance companies are the PGBL and VGBL pension plans. In private pension plans, the income earned from assets is fully allocated to the beneficiaries’ reserves. These products usually offer the possibility for contracting supplemental coverage, such as life and accidents insurance. The PGBL and VGBL plans are characterized by defined contribution and offer their plan participants different alternatives of investment of accumulated reserves. The Company does not sell defined benefit traditional pension plans, nevertheless part of its plan participants has these plan types.
According to SUSEP, the contributions of private pension plans increased from R$111.4 billion in the end of 2018 to R$126.9 billion in 2019.
According to the Brazilian Financial and Capital Markets Association (ANBIMA), the asset management segment in Brazil has grown significantly in recent years. The volume of managed assets in Brazil increased from R$4,182 billion as of December 31, 2018 to R$4,708 billion as of December 31, 2019. Since 2004, the asset management sector has undergone significant changes, with appointment of the Brazilian Securities Exchange Commission (CVM) to oversee these activities, and with the incentives for the adoption of best corporate governance practices and for increased transparency in asset management.
The main clients of the asset management market are corporate investors, such as private pension entities, insurance companies and private clients who are usually from the high net worth segment.
Last update: March 11, 2020