With Europe in recession and North America growing at an anemic pace, insurers are seeking new markets. Not surprisingly, many are casting an eye towards Brazil.
Executive SummaryEconomists at Coface outline positive economic trends for p/c insurers looking for growth in Brazil, including 3 percent GDP growth and an expanding middle class. They note, however, that there have been some regulatory impediments for insurers and that business corruption, infrastructure shortcomings and dependence on foreign capital are drags on the Brazilian economy.
A host of factors make Brazil attractive in both the short and long term. They include:A robust and growing economy relatively unaffected by global shocks A burgeoning middle class Huge infrastructure projects in advance of the World Cup in 2014 and 2016 Olympic Games A liberalized insurance sector, which encourages foreign investment. Strong economy
With a gross domestic product of $2.42 trillion, Brazil is already the world’s sixth largest economy—bigger than the UK. A diversity of trading partners, as well as a mix of agriculture, raw materials, manufacturing and services bodes well for continued growth and reduces vulnerability to global economic upheavals.