Brazil is the largest non-life insurance market in South America, and Axco recently released our new Insurance Market Report, detailing the major events, players, and regulations that currently define it.
For the most part, rates and conditions were hardening in the Brazilian market throughout 2021 to 2023, especially within property and engineering. However, rates have been flat and softer in the 2024 renewals, but after the flood losses in Rio Grande do Sul, key market sources do not expect further softening to continue throughout the 2024 renewals.
The state of Rio Grande do Sul was hit by severe floods in early May 2024. At the time of our Insurance Market Report being written, paid insured losses were reported as BRL 5.8bn (USD 1.12bn), but this is expected to grow to BRL 10bn (USD 1.94bn). Economic losses are estimated to be a multiple of the insured losses number. Natural catastrophe risks have long been thought to be small in Brazil, which is why this came as a shock and is likely to impact 2024 renewals.
In regulatory news, in March 2023, the Senate resurrected an old bill - PLC 29/2017, which originally dated from 2004. This is a wide-ranging bill which would introduce a new regulatory framework for (re)insurance. On the 18th of June 2024, the bill was approved by the Economic Affairs Commission (CAE) of the parliament, and on the 26th of June 2024, now known as PL 2597/2024, was approved by the Senate. The bill is now back with the lower house and may be amended further.
The law and its impacts are still uncertain but seem likely to change the whole legal framework around insurance policies and contracts. SUSEP (the Brazilian Insurance Commissioner) has consulted widely on this law, including extensive work with overseas reinsurers.
To find out more about what’s happening in the Brazilian market or any of the other 173 insurance markets that are covered within Axco’s Insurance Market Reports, log into your Axco portal, or find out more about Insurance Market Reports here: https://www.axcoinfo.com/products/insurance-market-reports-non-life/
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