Can Brazil meet the expectation of foreign reinsurers?

Although the Brazilian reinsurance market was significantly liberalised by the new statute and regulations, it is not yet entirely unfettered. Here, M. Muchua Millett* reviews the implications of several significant limitations (such as the ‘right of first refusal’ accorded to local reinsurers and the imposition of cession limits) on the role of foreign reinsurers in the market. He also looks at the use of co-operative agreements between local and foreign companies to overcome these challenges

Brazil is by far the largest insurance market in Latin America, representing more than 40% of the gross written premiums in the region. Brazil also has the largest population in South America, the 10th largest economy in the world by GDP and a low insurance penetration rate. These factors indicate that, despite the relatively impressive size of the Brazilian insurance market, it still has tremendous growth potential, estimated by some to be the third best in the world behind China and India.