Brazil’s local reinsurers are expanding abroad. In 2015, up to September, reinsurance premium volume related to risks from abroad was the second largest line of business, according to the regulator Susep’s classification, behind property.
The risks from abroad segment, at BRL797m net of commission, was ahead of surety (BRL580m), rural (BRL379m) and life (BRL328m).
According to the Terra Re report, risks from abroad represent 18% of reinsurance premium volume ceded to local reinsurers by Brazilian insurers over the same period. The share was 9% in the same period of 2014.
Led by IRB, at least five of Brazil’s current 16 local reinsurers are active abroad, Terra Brasis Re said, comprising AIG, Austral, Scor and Terra Brasis Re itself.
The Brazilian reinsurance market stood at BRL9.87bn (gross of commission) for the 12 months aggregate ending in September 2015, an annual growth rate of 6.8%, close to that of the general insurance market, according to the report.
In the first three quarters of 2015, local reinsurers together produced a net profit of BRL696m, in contrast to profit of BRL386m in the same period of 2014. Former state monopoly IRB posted a profit of BRL549m.
The loss ratio for the entire market (gross of retrocession) in the year to September stands at 80% compared with 75% over the same period in the previous year.
In the last quarter of 2015, a dam breach in Rio Doce Brazil led to a major environmental disaster. Ensuing insured losses will be accounted for, at least in part, by the closing of the 2015 fiscal year, the report points out.