Brazil Will See Claims Rise in 2020, Says GlobalData

With Brazil becoming a hotbed for COVID-19 pandemic, the country’s insurers are open to paying out on claims even if there is no pandemic clause and there will be a substantial upsurge in the claims in 2020, says GlobalData, says GlobalData, a leading data and analytics company.

GlobalData expects the gross written premium (GWP) in the country’s general insurance market to increase at a compound annual growth rate (CAGR) of 6.3% up to 2024, down from 7.9% in its pre-COVID-19 forecasts. Growth is expected to slow down to 2.0% in 2020, compared to 5.2% previously. However, growth is set to recover to previous levels by 2023. The initial slowing of growth rates and recovery by 2023 is reflected in both the life and non-life sectors.

Deblina Mitra, Insurance Analyst at GlobalData, comments: “Life insurance policies in Brazil typically exclude pandemic risks, restricting the direct loss from the outbreak. However, many insurers are still accepting claims related to the outbreak.”

The country’s regulator announced in March 2020 that tests would be covered as part of basic mandatory cover under private healthcare or health insurance.

GWP in general insurance, in particular, is set to decline in 2020 due to economic slowdown. A formal lockdown has not been in place in Brazil, but the domestic auto industry sector’s activity declined by 90% in the second half of March 2020. This will significantly reduce the demand for motor insurance, which makes up 30% of the general insurance premiums in the country.

Mitra concludes: “However, one knock-on effect from the pandemic will be the rise in digitalization. Insurers and brokers are strongly promoting online claims management (video calls via apps such as Facetime, Skype and WhatsApp), customer support, and distribution via apps, website and social media platforms.”

GROWTH AREAS IN BRAZIL? TRY GATED & APP-MONITORED COMMUNITIES

IE Note; There is some very useful historical background on the insurance market in Brazil in this Deloitte report. 

Meanwhile a UK company is building its 4th `Smart City’ in Brazil, which aims to provide a self-contained living experience. UK startup Planet Smart City, announced the launch of its fourth smart city, Aquiraz. The 200-hectare site will be home to more than 18,000 residents.

The company are offering sustainable and socially inclusive communities, supported by the unrivalled services of the Planet App, which enables residents to engage with each other and the neighbourhood around them. (Sounds like Mumset crossed with Neighbourhood Watch, but whatever floats your boat – Ed)

Headquartered in London, Planet has raised €100 million since inception and is executing an ambitious growth plan which includes the launch of 30 projects by 2023 with an intermediate milestone of eight large-scale residential projects launched in 2020.

This new 4th smart city follows the successful launch of Smart City Laguna (also in Ceará), Smart City Natal (in Rio Grande do Norte) and Viva!Smart (in São Paulo). Smart City Aquiraz will feature a host of social and digital solutions including a free library, cinema, outdoor fitness areas, cycle lanes, urban gardens, a football pitch and some shared kitchen facilities for residents as well as technological features such and free wifi across communal areas.

As the gap between a wealthy elite and the remaining population increases in many parts of the world, insurers would be wise to look at identifying those areas that have assets, and lives, to protect, in every country.

About alastair walker 7751 Articles
20 years experience as a journalist and magazine editor. I'm your contact for press releases, events, news and commercial opportunities at Insurance-Edge.Net

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