Challenges and trends in the insurance sector underpin the debates under way at FIDES Rio 2023, the largest insurance conference in the Americas and the Iberian Peninsula, which began on Monday, September 25 in Rio de Janeiro. During the event’s opening ceremony, leaders of Brazilian insurance organizations and government officials took to the main stage to present their views on topics of interest to the industry.
“The insurance sector plays a fundamental role in Latin America, guaranteeing that assets can be recovered and stabilizing people’s income,” said the president of Brazil’s National Confederation of Insurers (CNseg), Dyogo Oliveira. He said that in 2022, the industry paid out more than R$450 billion in claims, redemptions and prizes in Brazil, transforming the lives of people and companies. “In both youth and maturity, it is insurance coverage that encourages dreams, makes plans viable and creates opportunities,” he added.
The president of the Inter-American Federation of Insurance Companies (FIDES), Rodrigo Bedoya, pointed out some of the main challenges that need to be tackled by insurance sector stakeholders. They include the low penetration of insurance in Latin America, as many people and companies don’t have access to this tool or understand its importance. The lack of financial and cultural education about insurance in the region reinforces this issue.
The executive also mentioned risks associated with cybersecurity. “Data protection, digital fraud prevention and operational continuity are critical concerns for the insurance market,” said Bedoya. Digitalization is an opportunity for growth and efficiency in the insurance market, he said, but the different possible ways to achieve it, the implementation costs and timeframes and the sector’s regulatory limitations make it a significant issue for insurers.
Sector could double in size in Brazil by 2030
According to the president of the National Federation of Insurance Brokers (Fenacor), Armando Vergilio, Brazil has excellent potential for growth in insurance. The Brazilian economy’s numbers have recently improved and vigorous government development programs such as the new Growth Acceleration Program and neo-industrialization initiatives are expected to further boost the economy.
Vergilio said that by looking at some macroeconomic indicators, such as falling unemployment and GDP growth (expected to be 3.2% this year), together with market potential for some types of insurance, it is possible to conclude that the industry could double in size by 2030, reaching 10% of GDP, the average level seen in OECD member countries. “We can indeed achieve this. We are likely to double in size in the next seven or eight years,” he said.