We maintain a positive outlook for the Brazilian insurance industry in 2017 and over the fiveyears to 2021. Rising incomes, improving macroeconomic fundamentals and a steady demand for life andpension savings, together with increased purchasing of items requiring insurance will all underpin growthin the industry. Additionally, we note that the high growth rate will encourage a number of internationalinsurance carriers to attempt to solidify their footing in a market largely dominated by domestic firms.
Insurance carriers will look to attract lower-income consumers in areas where penetration rates andproduct awareness is low. We highlight that insurers will have to actively lure low- and middle-incomecustomers to generate higher premiums in uninsured areas.
Key Updates And Forecasts
Major Brazilian financial services provider and insurance carrier Bradesco received regulatory approvalfor the USD5.2bn purchase of HSBC's Brazil operations in Q416. This will boost the group's consumerbase by over 5mn. The regulatory body has barred Bradesco from making any more high profilepurchases for a period of 30 months.