Brazil's insurance premiums should continue near average growth rates of the last five years, while the industry as a whole may see consolidation, according to a new report from Fitch.
"The sector has been benefitting from low exposure to natural disasters, the high level of economic stability and the increase in incomes for individuals and companies," Fitch Brazil financial institutions ratings director Maria Rita Gonçalves said in a statement.
Among the advances noted were improvements in regulation and the end of the monopoly by IRB-Brasil Re.
In terms of premium growth, markets expect 10-15% growth for the year after the 13% shown in the 12 months to end-June, 15% in 2007 and 12% in 2006, according to the report.
Fitch also predicts consolidation as the market may become more profitable in some respects, with reinsurance premiums dropping, but cautions that regulatory burdens could offset these gains in other cases.
"The agency expects more consolidation among smaller market participants, whose niches may be less profitable in the new regulatory environment, with greater interactions with [insurance regulator] Susep," the report said.
Fitch also sees continued decreases in the insurer loss rates, with improvements in subscription processes.
To read the full report, in Portuguese, go to this link
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