Over the past few years, the insurance industry in Brazil has been one of the rapidly growing industries in the country. Even though the operational profits for insurance activities were not much, the investment in the industry has seen a significant surge in the recent years.

The overall economic stability is one of the prime factors for attracting several foreign investors to invest in the sector. However, the economic stability is not the only reason to attract investors; the other driving forces responsible for attracting investment are the huge size of the market base and the potential growth scope of the market. In the entire South American continent, Brazil alone accounts for almost 50% of the insurance activity.

Unlike most other countries, insurance companies operating in Brazil offer multiple types of insurance coverage including Health Insurance, Automobile Insurance, Life Insurance, Property Insurance, etc.  For foreign investors looking to invest in the Brazilian insurance sector, there is a huge market base for life, auto and health insurance. These insurance coverage accounts for as much as 72% of the selling of total insurance premiums in the country.

 

Auto Insurance in Brazil:

In recent times, the auto insurance sector in Brazil has witnessed a significant upsurge. The auto insurance sector in Brazil has been growing consistently over the years. This growth has mainly resulted from a general increase in car ownership. Improvement in the general awareness among the common people about the importance of auto insurance has also played a major role in the increasing sales of auto insurance policies. The healthy competition amongst the insurance companies in Brazil has resulted in competitive pricing of insurance policies; this, along with the legal changes happening within Brazil, provides a great investment opportunity for investors to invest in the insurance sector of Brazil.

 

Health Insurance in Brazil:

The health insurance sector in Brazil, though it does not hold a huge investment prospect for foreign investors, still offers significant scope for investment. Studies conducted in Brazil have suggested that more than 74% of Brazilians get free health-care insurance from the state-owned health system.  23% of the population is insured with government-owned medical groups and Health maintenance organizations. Only the remaining 3% of the population are enrolled with the private insurance companies for their insurance policies.

The Health insurance plans offered by the Brazilian government-owned health organization are of very sub-standard quality and very often, the payments are very low. Owing to these factors, many people are now turning towards private insurance firms to get their insurance policies. Thus there is a great opportunity ahead for investors looking to invest in the health insurance sector of Brazil.

 

Life Insurance in Brazil:

As per the 2002 statistics, the life insurance sector in Brazil accounted for about 0.7% of the total National GDP. Since then the figures have grown considerably on a consistent note. This is mainly because the demand for life insurance products like retirement plans has increased manifold.  In addition, The Brazilian government has been taking initiative to encourage people to take private retirement plans. As a result, great opportunity lies for foreign investors to invest in the life insurance sector of Brazil. 

Declining inflation and improved distribution among the people, and the large consumer market, has opened up a huge market for insurance companies to tap into middle-class consumers. Initially, the insurance companies were aimed at only 5% of the rich population in the country. But now, the insurance companies are aiming to target the other population, which is about 8 million. Thus investors in the insurance industry would gain great returns on their investments.