Brazil general insurance market to surpass $68 billion by 2027, forecasts GlobalData

Brazil’s general insurance industry is set to grow at a compound annual growth rate (CAGR) of 7.3% from BRL242.6 billion ($46.97 billion) in 2022 to BRL344.9 billion ($68.03 billion) in 2027, in terms of direct written premiums (DWP), forecasts GlobalData, a leading data and analytics company.

According to GlobalData’s Insurance Database, the general insurance industry in Brazil is projected to grow by 8.0% in 2023 and 6.7% in 2024, support by growth in the economy, investment in new infrastructure projects, and increasing health awareness.

Anurag Baliarsingh, Insurance Analyst at GlobalData, comments: “Brazil’s general insurance industry grew by 11.2% in 2022, after growing by 10.8% in 2021, the first double-digit growth registered since 2016. The growth was attributed to rising demand for health insurance, investment in infrastructure projects, and a significant increase in motor insurance premium policy rates as a result of inflation.”

However, due to the normalization of the economic recovery after the pandemic as well as the difficult market conditions due to the global economic slowdown, the growth is expected to be slower in 2023 and 2024.

Personal Accident and Health (PA&H) is the leading line of business in the Brazilian general insurance industry in 2023, accounting for a 52.8% share of the premiums. PA&H insurance is expected to maintain its leading position untill 2027 and grow at a CAGR of 5.6% during 2023-27.

Anurag continues: “The growth of PA&H insurance will be supported by higher demand for health insurance due to increased awareness after the pandemic as well as rising medical inflation that has increased the cost of treatment. Changing demographic factors, such as the country’s aging population, will also support the growth of PA&H insurance. As per World Health Organization (WHO), 13% of the country’s population was aged over 65 years as of 2022, which is expected to reach 24% by 2030.”

Motor insurance is the second largest line in the Brazilian general insurance industry, accounting for a 21.9% share of the premiums in 2022. Motor insurance grew by 31.9% in 2022 as compared to the previous year, supported by an increase in the price of automobiles. According to the National Association of Motor Vehicle Manufacturers’ (ANFAVEA), automobile prices have increased by approximately 17.0% in 2022 in comparison to 2021, driven by rising production costs attributed to inflation.

Despite the upward trend in vehicle prices, the Brazilian automotive industry continues to register a rise in domestic vehicle sales. As per ANFAVEA, domestic vehicle sales increased by 24.0% in July 2023 compared to the same period in 2022.

Anurag adds: “Rising premium rates will also support motor insurance growth. As the economy rebounded after the pandemic, there has been a noticeable rise in vehicle traffic, resulting in an increase in accidents. This is expected to support motor insurance that is expected to grow at a CAGR of 6.1% during 2023-27.”

Property insurance is the third largest line of business, accounting for 17.5% share of the general insurance DWP in 2023. The growth in property insurance will be supported by continued investments in infrastructure projects. The Brazilian construction industry is expected to expand by 1% in real terms in 2023 and record an average annual growth rate of 2.7% from 2024 to 2027, supported by public and private sector investments in road, rail, and port projects.

Property insurance will also benefit from the growth in the agriculture sector, supported by the rise in agricultural production as Brazil is the world’s fourth largest agriculture producing country. Agriculture insurance accounted for 27.2% of the property insurance DWP in 2022. Property insurance is expected to grow at a CAGR of 11.1% between 2023 and 2027.

Financial lines, marine, aviation, and transit (MAT), liability and miscellaneous insurance are expected to account for the remaining 7.1% share of GWP in 2023.

Anurag concludes: “The Brazilian economy is forecast to grow by 2.5% in 2023 and 1.6% in 2024, due to a slowdown in exports, weaker private consumption, unfavorable global economic outlook, and rising interest rates. Withstanding the impact of the economic slowdown, the general insurance industry is projected to witness an upward growth trend from 2025 onwards, supported by growing demand for health insurance and rising automobile sales.”

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