Brokers play prominent role
Brokers remain the main distribution channels for insurance in Brazil, accounting for some 70% of sales. The remaining 30% of sales are accounted for by the sale of insurance through bank branches (25%), and through direct marketing methods (5%).

The involvement of brokers in a direct or indirect form is mandatory in Brazil. The figure of an 'agent' (a salesman working purely on behalf of the insurance company) does not formally exist, although brokers often have an ambiguous role - officially earning their income independently from customers, but concentrating on (and supported by) just one or two insurance companies.

A greater emphasis is now being placed on marketing
Marketing received a limited amount of emphasis on the past. Until the early 1990’s, Brazilian insurance products tended to be homogenous, and pricing was regulated. Marketing therefore was not considered to be particularly important.

Since the sector began growing and competition began arriving from overseas, insurers have begun to recognize the crucial role that marketing has to play in driving growth. Local firms still lack experience in the effective use of marketing and there is scope to improve the awareness of insurance products among the public.

New products such as long-term life insurance, for example, tend to be poorly explained to customers and this has restricted growth. There is scope for targeted marketing campaigns that could increase the penetration potential of companies within the industry. There is also scope for a more effective use of customer profiling and targeting, to make direct marketing a more effective means of distributing personal insurance.

Insurers are looking at new distribution channels
Insurers are experimenting with new methods of distribution, particularly in their attempts to reach a wider market place (for example, among middle and lower income customers who have not bought insurance in the past).

Firms are keenly exploring both broker and non-broker distribution channels. Insurers are selling products through banks, supermarkets, gas stations, motor accessory shops and subway stations. They are also looking at the use of affinity groups, direct marketing, and alliances with firms such as credit card operators, and are beginning to explore the use of the Internet  as an interface for both the client and suppliers such as brokers.

Distribution is the main concern for foreign insurers entering the market
Getting around the problem of distribution is clearly the main concern of most foreign insurance companies entering Brazil.  Gaining distribution facilities quickly and on a large scale has been a major consideration behind many of the insurance joint ventures and acquisitions that have taken place in Brazil's financial services industry since 1995.

Marketing skills and expertise are at a premium
There are opportunities within the Brazilian market for insurers that have skills and experience in marketing insurance products in their home countries, and there is scope for insurers to improve established practices in Brazil. This is particularly true in the case of complex, longer-term insurance products such as life and retirement insurance. Additionally, there are opportunities for advertising firms and other suppliers with experience in marketing and distribution to participate in the Brazilian insurance sector.