BestWeek: Insurers Could Look to Microinsurance to Boost Penetration in Untapped Brazil Market

OLDWICK, N.J.--(BUSINESS WIRE)--As the sixth-largest economy in the world, with an insurer penetration rate of just 2.5%, Brazil is a prime target for insurers, according to the latest issue of BestWeek U.S./Canada. Despite 170 insurers and reinsurers operating in the country, insurance has not been on the general public’s radar. “One of the big problems in Brazil, and other parts of Latin America, is the common person’s awareness of the use of insurance products,” said Andrea Keenan, vice president of research, ratings criteria and relations for A.M. Best Co. "In order to increase the penetration level there has to be a structural shift." Microinsurance is one mechanism that could cause that shift, she added.

“One of the big problems in Brazil, and other parts of Latin America, is the common person’s awareness of the use of insurance products”

• BestWeek Europe looks at signs of doubt among two of the European Union’s most important national regulators as to when and how the EU’s Solvency II directive will go into effect. It’s looking unlikely to meet its current timetable for 2014 implementation.
• The aftermath of Hurricane Sandy has brought with it increased interest and awareness of the excess flood insurance market, which industry members tell BestWeek U.S./Canada could result in higher rates, at least in the short term.

Patrick Fleming, an excess flood specialist for Jimcor Agencies, said Sandy will have “lasting effects” on the excess flood market. The top provider of excess flood coverage are underwriters at Lloyd’s, which has reacted to Sandy losses by restricting underwriting territories, reducing aggregate premium available in most coastal counties in the Northeast and increasing prices between 25% to 35%, he said.

BestWeek can be accessed on iPads and mobile devices at www.bestweek.com.

BestWeek is published by A.M. Best Co. for insurance professionals. To subscribe, visit www.ambest.com/sales/BestWeek.

Founded in 1899, A.M. Best Co. is the world’s oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2013 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.