microinsurance in brazil
Post on 11-Feb-2016
46 Views
Preview:
DESCRIPTION
TRANSCRIPT
MicroinsuranceMicroinsuranceinin
BrazilBrazil
Brazilian Brazilian Population Population
OutlookOutlook
Population: 184,388,620
52%
48%
Economically Active Population: 96,031,971Population not classified as EAP: 88,356,649
Source: IBGE - National Household Sample Survey 2005
Income Distribution
1.023.622
51.573.651
38.243.804
29.669.537
11.165.917
10.463.858
6.828.965
2.583.108
without income
up to 1
1 to 2
2 to 3
3 to 5
5 to 10
10 to 20
Over 20
Num
ber o
f Min
imum
Wag
es
Fonte: IBGE - National Household Sample Survey 2005
Employed Population - Grouped by Category
53%
10%
37%
Formal Employees: 28,793,152Militaries and Public Servants: 5,490,792Others / Informal Employees: 20.360.043
Source: IBGE - National Household Sample Survey 2005
Urban Concentration
38.849.338
28.923.782
9.994.660
19.297.623
5.729.286
99.327.856
0 to 14 years-old
15 to 49 years-old
50 years-old ormore
Age
Urban Rural
Source: IBGE - National Household Sample Survey 2005
BrazilianBrazilianInsurance Market Insurance Market
OverviewOverview
1,00%
2,53%
3,10%
1994 1995 2006
Insurance, Open Private Pension Funds and Capitalization Sectors
Participation in the GDP
2,97%
2000
Market Overview
MarketMarket NumberNumber
Insurance CompaniesInsurance Companies 115115
Open Pension FundsOpen Pension Funds 2626
Capitalization CompaniesCapitalization Companies 1818
Insurance Agents (Individuals) Insurance Agents (Individuals) 39.51839.518
Insurance Agencies (Companies)Insurance Agencies (Companies) 22.13122.131
Market Premium Evolution(millions R$)
...
1,00%1994
1995 32.758 52.308 56.927 64.607
20052000...1995 20061999 2004
28.25916.33110.035
US$ 29,676 MM - 2006 US$ 2,1771
...
MARKET GROWTH
OPENING OF THE REINSURANCE MARKET-
2007
.
PRODUCT DIVERSIFICATION THE MODERNIZATION OF THE REGULATORY AND SUPERVISORY
PROCESS
Brazilian Market Perspectives
Microinsurance or Microinsurance or “Seguro Popular”“Seguro Popular”
in Brazil:in Brazil:Included in theIncluded in the
Brazilian Government policyBrazilian Government policyfor micro-financesfor micro-finances
Government Policy Government Policy for Microinsurancefor Microinsurance
General Insurance: products for General Insurance: products for the the low-income peoplelow-income people and for the and for the formal and informal “micro-formal and informal “micro-entrepeneurs” entrepeneurs” (SUSEP)(SUSEP)
Rural Area: products to protect Rural Area: products to protect “low-income family farmers”“low-income family farmers” (MDA – Ministry of Agrarian (MDA – Ministry of Agrarian Development)Development)
SUSEP’s First ActionsSUSEP’s First Actions End of 2003End of 2003 – internal discussions – internal discussions
aiming at the design of simple and aiming at the design of simple and low-cost productslow-cost products
September/2004September/2004 - Circular SUSEP - Circular SUSEP 267/2004 – 267/2004 – “popular” group life “popular” group life insurance productinsurance product
November/2006November/2006 - Circular SUSEP - Circular SUSEP 306/2006 - 306/2006 - “popular” automobile “popular” automobile productproduct
Parallel IncentivesParallel Incentives Alternative distribution channelsAlternative distribution channels: :
“bankassurance”, internet, call-“bankassurance”, internet, call-centers, utility lines prviders and centers, utility lines prviders and concessionaries such as concessionaries such as electricity and gas and phoneelectricity and gas and phone
Ombudsman RuleOmbudsman Rule Financial Education ProgramFinancial Education Program 2004 - 2004 - Decree 5,172Decree 5,172 - lowered the - lowered the
IOF (Financial Transactions’ Tax) IOF (Financial Transactions’ Tax) for life insurance from 7% to 2%, for life insurance from 7% to 2%, reaching 0% in 2006reaching 0% in 2006
Life Products Life Products CharacteristicsCharacteristics
Main target: banks’ clients withMain target: banks’ clients with monthly income under monthly income under 3 min 3 min wageswages
Basic Coverage: Basic Coverage: death by any cause death by any cause Additional Coverage: Additional Coverage: funeral, funeral,
“cesta básica” or “typical family “cesta básica” or “typical family food basket”, drugstore coverage.food basket”, drugstore coverage.
Lowest Premiums: R$ 6 (US$ 3) / Lowest Premiums: R$ 6 (US$ 3) / Coverage: ≤ R$ 3,000 (US$1,500)Coverage: ≤ R$ 3,000 (US$1,500)
Automobile Products Automobile Products CharacteristicsCharacteristics
Vehicles from Vehicles from 10 to 20 years-old10 to 20 years-old More strict acceptance criteriaMore strict acceptance criteria Few additional coveragesFew additional coverages compared to compared to
traditional productstraditional products Higher deductibleHigher deductible for partial for partial
indemnityindemnity Lower PremiumsLower Premiums compare to compare to
traditional planstraditional plans
Other Lines Other Lines CharacteristicsCharacteristics
Fire and other non-life coverages Fire and other non-life coverages (Multiple Peril)(Multiple Peril)
There are no specific rules on MIThere are no specific rules on MI No data segregation in the reports No data segregation in the reports
sent by the insurer to SUSEP.sent by the insurer to SUSEP. The same product may be used for The same product may be used for
all kinds of consumersall kinds of consumers Distribution channels differentiate Distribution channels differentiate
the target publicthe target public
Farm Family Life Farm Family Life InsuranceInsurance
Farm Family Life InsuranceFarm Family Life Insurance - jointly - jointly designed by Bank of Brazil and MDA designed by Bank of Brazil and MDA (2004), for family farmers associated to (2004), for family farmers associated to the National Agriculture Strengthening the National Agriculture Strengthening Program for Family Farmers (PRONAF) Program for Family Farmers (PRONAF) on agricultural funding operations on agricultural funding operations (mandatory enrollment)(mandatory enrollment)
Coverage: Death and Extra IndemnityCoverage: Death and Extra Indemnity Distribution Channel: BB’s agenciesDistribution Channel: BB’s agencies Capital Limit: R$ 600,00 to R$ 40.000,00 Capital Limit: R$ 600,00 to R$ 40.000,00 Premium: R$ 2,80/year for R$600,00: Premium: R$ 2,80/year for R$600,00:
Death and R$ 600,00:Extra IndemnityDeath and R$ 600,00:Extra Indemnity
Distribution ChannelsDistribution ChannelsIn Brazil it is not mandatory to have a broker In Brazil it is not mandatory to have a broker
intermediation when commercializing an intermediation when commercializing an insurance product. The brokerage fee is insurance product. The brokerage fee is mandatory.mandatory.
Social and professional associations and Social and professional associations and labour unions, …labour unions, …
Utility lines providers and concessionaires of Utility lines providers and concessionaires of public services, such as electricity and gas public services, such as electricity and gas and phoneand phone
Call-centers and internetCall-centers and internet The retail banks are the main distribution The retail banks are the main distribution
channels: channels: more than 90% of Life MI products more than 90% of Life MI products through bankassurancethrough bankassurance, including ATM’s, including ATM’s
Main ResultsMain Results Life Insurance good performance Life Insurance good performance
inspired other lines (Automobile, inspired other lines (Automobile, Fire,)Fire,)
The biggest retail banks The biggest retail banks commercialize MI life productscommercialize MI life products
The biggest life insurers are domestic The biggest life insurers are domestic and part of big national and part of big national conglomerates, including big retail conglomerates, including big retail bank bank
Main ResultsMain Results SUSEP’s rules stimulated discussions SUSEP’s rules stimulated discussions
on MI and sensitized the industry – on MI and sensitized the industry – the theme was unknown before 2004the theme was unknown before 2004
Insurers preferred to design their Insurers preferred to design their own products, own products, focus on low-income focus on low-income peoplepeople
Industry discovered low-income Industry discovered low-income segment:segment:““The poor are insurable”The poor are insurable”
Main ConclusionsMain Conclusions Products did not change so much. Products did not change so much. The The
commercialization focus changedcommercialization focus changed Importance of the Importance of the dialogue with dialogue with
industryindustry for developing a new sector for developing a new sector Tax reliefTax relief has positive effects on MI has positive effects on MI
lines seen that reduces insurance costslines seen that reduces insurance costs Flexibility for distribution channelsFlexibility for distribution channels – –
fundamental role in the consumer fundamental role in the consumer market growthmarket growth
Main ConclusionsMain Conclusions Ombudsman RuleOmbudsman Rule: important : important
mechanisms to safeguard the mechanisms to safeguard the consumers rights, especially of the consumers rights, especially of the less fortunate onesless fortunate ones
Financial EducationFinancial Education should be should be encourage, leading to a conscious encourage, leading to a conscious consumerconsumer
Brazilian market has Brazilian market has few informal few informal schemesschemes when compared to other when compared to other countries, facilitating supervisioncountries, facilitating supervision
SUSEP’s ChallengesSUSEP’s Challenges Segregate MI statistical data Segregate MI statistical data creating creating
no additional onusno additional onus for insurers for insurers
Maintain an adequate regulatory Maintain an adequate regulatory environment, balancing: environment, balancing: promotional promotional aspects aspects XX prudential requirementsprudential requirements
Raise the perception level of Raise the perception level of other other stakeholdersstakeholders
SUSEP’s ChallengesSUSEP’s ChallengesEngage in dialogue with other Brazilian Engage in dialogue with other Brazilian supervisors and policymakerssupervisors and policymakers for for convergence,convergence,
i.e.:i.e.: Cooperation exchangeCooperation exchange Tax reliefTax relief for other lines (Receita for other lines (Receita
Federal)Federal) Encourage new lines, focus on Encourage new lines, focus on rural linesrural lines
(MDA) (MDA) Promote financial education for low-Promote financial education for low-
income people income people (Ministry of Education)(Ministry of Education)
Thank youThank youObrigadaObrigada
Regina L. G. SimõesRegina L. G. Simõescodin@susep.gov.brcodin@susep.gov.br
top related