Corporate customers are very important to insurers, not only as buyers of commercial insurance, but also for sales of personal products such as group life, retirement and health insurance for their workforce.

Companies in Brazil, particularly larger ones, are very significant buyers of life, health and retirement insurance products for their workforce. Additionally, Brazil’s privatization program, which has been ongoing since 1994, has led to a number of industries passing from public hands into private hands.

This has had the effect of increasing demand for commercial insurance as assets that were previously publicly-owned are now passing into private hands. In many cases these assets were previously either underinsured or self-insured. Similarly, the demand for personal insurance (group life, health and retirement insurance) for employees has grown and will continue to grow.

The privatization program has encompassed the telecommunication sector, as well as the mining, transport, ports, highways, railroads and energy and petroleum sectors. This, together with the liberalization of the economy has seen a growth in the number of multi-nationals in Brazil. It is estimated that of the 500 largest multi-nationals in the world, well over 400 have a presence in Brazil.

Despite numerous measures to develop other regions of the country, the industrial activity in Brazil continues to be concentrated in the southeast, which includes the states of Sao Paulo, Rio de Janeiro and Minas Gerais.

In line with a trend that has been evident in the USA, we expect the sale of insurance through the workplace to increase. Employers tend to work with a single insurance provider for each type of product, although this is also likely to change

Corporate demand for insurance will also strengthen as industrial activity from local and multinational companies continues to develop in Brazil. The influence of foreign insurers and clients will gradually lead to the development of demand for more sophisticated and customized services, including risk management programs.

Brazil’s huge privatization program, spanning areas from railways to telecommunications, is gradually helping to boost the property and casualty market. Privatization has transferred many publicly-owned assets to the private sector. Many of these assets were previously either underinsured, or self-insured. Additionally, privatization has meant that when it comes to renewing insurance contracts, competition among insurers is becoming more transparent.

Further deregulation in the market is likely. In the next 2-5 years, this is likely to include the opening of the workman’s compensation monopoly, and the legalization of dollar-denominated insurance contracts. Within 5 -10 years, we believe that customers will be allowed to buy insurance from outside Brazil, probably subject to specific taxes and exchange rules.