The non-life insurance market in Brazil still faces challenges relating to low efficiency and barriers to competition, despite experiencing a healthy growth in the 2006-2010 period, according to a report by BRICdata.

The report lists a robust economy, expansion of broker channels and growing motor, property and construction markets as the key drivers for the growth in the review period.

It also adds the ongoing European debt crisis and fears of a double dip recession in the US, which will adversely impact Brazil’s GDP growth, as the other challenges that the market will face in the future.

The report cites that the non-life insurance industry in Brazil has grown steadily over the last decade, buoyed by overall strong economic fundamentals, increasing awareness among consumers about insurance products, considerable relaxation of regulatory restrictions and industrial reforms which allowed foreign competition to flourish.

Ten companies accounted for a major chunk of the total retained premiums in the non-life insurance market in 2010 in Brazil, with a share of 66.7%, according to BRICdata.

The market in Brazil comprises of non-life insurance companies, which are both controlled by banks as well as independent private insurance companies.

Going ahead, it is expected that the regulatory environment will become more restrictive with the imposition of new regulatory proposals by SUSEP.

SUSEP had recently announced stricter regulations for risk management covering all non-life insurance markets, in a bid to implement a risk-based supervisory regime that would fall in line with international standards and practices.

The full report ‘Non-Life Insurance in Brazil, Key Trends and Opportunities to 2015’ is available from BRICdata. Click here for more details.