Bermuda-based insurer Alterra Capital is planning to apply for a license to incorporate a local reinsurance company in Brazil.

Alterra said recent changes in the Brazilian reinsurance regulations have enhanced the position of local reinsurers by replacing the ‘first right of refusal’ requirement with a rule making it compulsory for insurance companies purchasing reinsurance to cede a minimum of 40% of each risk to local reinsurers.

Alterra president and CEO Marston Becker said it has been just over a year since Alterra set up Alterra Latin America, and it is continuing to develop its presence in the region through offices in Bogota, Rio de Janeiro and Buenos Aires.

"The addition of a local reinsurance company is a key element of the firm’s strategy for Brazil. It will complement our existing presence in that market, which we are currently developing from our Alterra at Lloyd’s office in Rio de Janeiro, and will provide us with greater access to additional reinsurance opportunities," Becker said.