Following two years of planning, AGCS Re formally opened for business in Brazil last year as a licensed local reinsurer. With an A rating from AM Best, the fully facultative reinsurance focused firm has become one of the leading players in the market.
By the end of last year, the new operation had written around $100m of business with its three biggest lines being marine, construction and energy.
But the company is now looking to build out its operations into other areas of the market.
In addition to the marine, construction and energy lines, AGCS will add liability, financial lines, aviation and property, taking the total number of classes it operates in to seven. However, construction and infrastructure will remain a key part of its business.
“We want to explore all that, but we understand we’ll be very strong in infrastructure,” explained Angelo Colombo, the chief executive for AGCS Re in South America.
The country’s big oil and gas push, much of which has arisen owing to the highly publicised discovery of the pre-salt oil reserves within Brazil’s territorial waters, as well as the World Cup and upcoming Olympics, are all part of the significant construction activity taking place within Brazil.
But that is only part of the story, with the country also looking to build out other key infrastructure such as railways, power stations as well as ports and terminals. Consequently, infrastructure and construction is expected to grow into AGCS Re’s leading business line in the coming years.
With this increase in construction, as well as growth in other lines, Colombo said AGCS Re in Brazil is expected to expand by about 15% by the end of 2014.
AGCS Re’s Brazil business currently has around 50 staff made up of four nationalities – Germans, Brits, Argentines and locals.
“Now the challenge is to build the knowledge among the locals for the second generation,” explained Colombo. “We are looking to hire more people this year, and we need Latin American experts more and more.”
Some major changes are afoot this year in the Brazilian insurance and reinsurance market, and companies such as AGCS are positioning themselves to take advantage.
Arguably the biggest of these will see the former state owned reinsurer IRB, which went private earlier this year, undergo an initial public offering. At the same time, two major global carriers are expected to enter the market further increasing the amount of
multinational capacity that is available.
These moves, Colombo said, “will lead to a transformation of the market”.
While the arrival of additional capacity into the market means AGCS Re’s position as one of the dominant players in Brazil is threatened, Colombo said there are also benefits.
“It’s a trade off, but