Swiss Re Group and a South American conglomerate are jointly launching a commercial large-risk insurer in Brazil, and the reinsurer plans to own a majority stake.
The actual partnership, which goes into effect pending various regulatory approvals, takes place through subsidiaries. Plans call for Swiss Re’s commercial insurance arm, Swiss Re Corporate Solutions Ltd., and Bradesco Seguros S.A., the insurance conglomerate of Bradesco Group to create the company.
Essentially, Bradesco Seguros will contribute its commercial large risk portfolio to Swiss Re Corporate Solutions Brasil Seguros S.A., giving Swiss Re exclusive access to its distribution network. Swiss Re Corporate Solutions gets a 60 percent stake, and Bradesco Solutions will have a 40 percent equity stake in the combined entity.
What they’ll build is what both parties hope will be a “leading commercial large-risk insurer in Brazil” that can enable “innovative products to be delivered through an established distribution network,” according to the deal announcement.
Swiss Re will gain plenty from the arrangement. As the reinsurer notes, Bradesco Seguros has a distribution network with more than 4,600 Bradesco bank branches across Brazil. There are also 40,000 insurance brokers and agents registered to Bradesco Seguros. As well, Bradesco Seguros professionals who handle commercial large-risk business in Sao Paulo and Rio de Janeiro will join Swiss Re Corporate Solution Brasil Seguros S.A. (SRCB).
Bradesco Seguros President Randal Luiz Zanetti pointed out, in prepared remarks, that the partnership gives his company more international reach and expertise. Reciprocally, Swiss Re Corporate Solutions CEO Agostino Galvagni said the arrangement goes a long way toward boosting its Latin America market position.
“Bradesco Seguros’ local knowledge and distribution channels coupled with our large net capacity and global underwriting expertise will allow us to deliver superior products to our Brazilian and international clients,” Galvagni said in prepared remarks.
Swiss Re has communicated for a while now that it sees emerging markets serving as a big driver for property/casualty premium growth. The reinsurer’s annual insurance outlook issued in November 2015 predicted that emerging markets will generate non-life premium growth of 8 percent to 9 percent over the next two years That’s far higher than slowed-down, low single-digit premium growth expectations for the U.S. and Japan, Swiss Re’s report noted.
Source: Swiss Re