Key data

Brazil’s auto insurance sector has grown in recent years, with net written premiums in 2001 estimated to have totaled R$7.9bn. This growth resulted from a general increase in car ownership, an improvement in the awareness of insurance as a whole, more competitive pricing by insurers, and legal changes within Brazil.

The majority of auto cover provided in Brazil is for collision damage, theft and fire risks. Liability insurance is only now beginning to feature significantly in the market. This is mainly because Brazil has a relatively non-litigious environment compared to the USA and Europe. A compulsory auto injury insurance system operates in the country (known as DPVAT). This insurance is run by the insurance industry as a whole, and provides insurance cover (regardless of who is at fault) of about $3,000 for injury to third parties caused by cars. The premiums for this insurance are paid when the car owner buys his road tax every year. 

In the cities themselves, theft from cars and theft of cars has been a mounting concern among car owners. The incidence of theft is high compared to the USA and Europe, although there is evidence that the trend has improved since 1997. This increases the level of claims, although it also buoys demand for insurance cover.

Auto insurance products are becoming more sophisticated in their pricing structure and in the added value services that insurers increasingly provide (such as 24hr assistance, accredited garages, and loyalty discounts). Insurers are beginning to specialize in areas such as insuring imported vehicles, and corporate fleets.

Scale does tend to be important in operating a successful auto insurance venture. Smaller firms, however, can participate by providing manufacturing for other insurers that have a good distribution base, or by specializing in areas such as corporate fleets, imported cars, or by differentiating themselves in other ways.

The scope for growth in the Brazilian auto insurance sector is very significant, mainly because of an increasing level of car ownership in the country.

.