The latest report from GlobalData, looking at the GI market in Brazil.
The general insurance industry in Brazil is expected to grow at a compound annual growth rate (CAGR) of 8.8% from BRL307.3 billion ($61.6 billion) to BRL430.7 billion ($85.7 billion), in terms of direct written premiums (DWP), forecasts GlobalData, a leading data and analytics company.
GlobalData’s Insurance Database reveals that Brazil’s general insurance industry is expected to grow by 10.8% in 2024, driven by increasing demand for policies covering natural catastrophic (NatCat) events, investment in infrastructure projects, and rising premium rates across general insurance lines due to inflation.
Aarti Sharma, Insurance Analyst at GlobalData, comments: “The general insurance industry in Brazil expanded by 14.3% in 2023, recording the highest growth in the last five years. This robust increase was bolstered by a heightened demand for health insurance and a surge in automobile sales. Although the industry faces potential challenges from climatic risks and a challenging economic and geopolitical environment, it is expected to maintain sustainable growth over the long term.”
Personal accident and health (PA&H) insurance is the leading line of business, which is expected to account for a 56.6% share of general insurance DWP in 2024. It is expected to grow by 12% in 2024, supported by increasing demand for health insurance due to heightened awareness after the COVID-19 pandemic as well as rising medical inflation that has increased the cost of treatment.
Sharma adds: “Changing demographic factors, such as the country’s aging population, will also support the growth of PA&H insurance. As per GlobalData estimates, 10.5% of the country’s population was aged over 65 years as of 2023, which is expected to reach 11.3% by 2025. PA&H is expected to record a CAGR of 8.7% over 2024–28.”
Motor insurance is the second leading line, which is expected to account for 20.4% DWP share in 2024. It is expected to grow by 8.3% in 2024, supported by an increase in vehicle sales. According to the National Federation of Automotive Vehicle Distribution (Fenabrave), motor vehicle sales are anticipated to grow by 13.5% in 2024, reaching a total of 4.5 million registered units, as compared to a 12% increase in 2023.
Electric vehicle (EV) sales are also expected to increase in 2024, which will boost motor insurance growth. As per the Brazilian Electric Vehicle Association (ABVE), EV sales are expected to reach 10% of total sales in 2024, surpassing 150,000 units as compared to 7.4% share in 2023.
Sharma continues: “Rising premium rates for motor insurance policies will also support growth in the short term. According to the Central Bank of Brazil, the annual inflation rate stood at 4.5% in July 2024, higher than its target of 3%, and increased the inflation projections for 2024. A potential increase in interest rates to control inflation will add to the cost of claims in motor insurance, potentially enabling insurers to increase the premium rates in 2024 and 2025. Motor insurance is expected to record a CAGR of 8.6% over 2024–28.”
Property insurance is the third-largest line that is expected to account for 16.3% of the total DWP share in 2024. Property insurance is expected to be driven by increased demand for policies covering NatCat events as storms, cyclones, and powerful winds have become more frequent in Brazil.
Public and private sector investments in transport infrastructure projects to improve regional connectivity will also support property insurance growth. Property insurance is expected to grow at a CAGR of 9.1% over 2024–28.
Liability, financial lines, marine, aviation and transit (MAT), and miscellaneous insurance lines are expected to account for the remaining 6.7% DWP share in 2024.
Sharma concludes: “The Brazil general insurance industry presents a positive outlook, supported by increasing demand for health insurance, shifting consumer preference towards EVs, and rising demand for policies covering NatCat events. Building sustainable solutions to limit the impact of inflation and climate change on general insurance lines is expected to be a focus area for the insurers.”
ENDS
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