Munich Re sets up admitted carrier in liberalised Brazil
The deregulated Brazilian (re)insurance industry is set to welcome its latest admitted carrier, German giant Munich Re which is setting up a subsidiary in São Paulo.
The move comes just five weeks after it emerged that Lloyd's was planning an admitted carrier in the country following the Brazilian treasury's deregulation of the market that saw federal reinsurer IRB-Brasil Re lose its 68-year monopoly on 1 January.
Georg Daschner, whose responsibilities on Munich Re's board include Latin America, said: "We are very pleased that the Brazilian market has been opened for foreign reinsurers. Now we can offer reinsurance protection to primary insurers in Brazil in all lines of business and provide them with the Munich Re Group's entire range of services. This creates promising new business opportunities for us."
Munich Re said it is "very familiar" with the Brazilian market through its ten-year representative office in São Paulo.
"A local subsidiary will enable us to give the market the best support possible and make our capacity extensively available to clients from the outset. And we will succeed in participating appropriately in the expected expansion of the market," Daschner said.
With premium income from primary insurance of around US$ 27bn, Brazil is by far the largest insurance market in Latin America, Munich Re said.
In 2006 reinsurance premium income was roughly US$ 1.4bn.
"Liberalisation of the reinsurance market coupled with the country's overall economic development is expected to make demand for reinsurance solutions in Brazil increase markedly," the reinsurer added.
According to local newspaper DCI, SCOR and Swiss Re, which all have representative offices in the country, would operate as admitted reinsurers next year.
PARIS RE and Gen Re have also been linked with a move to Brazil.