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Bancassurance in Brazil: Life, Non-Life and Creditor Insurance

Table of Contents 

Executive Summary

Introduction

Market Background

List of Graphics / Tables

 

0.0 EXECUTIVE SUMMARY 

1.0 INTRODUCTION

What is this report about? 

Distribution partnerships with banks and other lending institutions constitute the focus of this report 

Rationale 

Bancassurance is by far the most important distribution channel for life insurance in Brazil 

Methodology 

Survey of banks and other lending institutions 

Market data 

Definitions 

Investment-related life insurance 

Retirement savings 

Risk life insurance 

Critical illness insurance 

Income protection insurance 

Accident insurance 

Health / hospital cash plans 

Medical expenses insurance 

Personal motor insurance 

Household insurance 

Creditor insurance 

Mortgages, consumer finance and credit cards 

Weighted provider share of partnerships 

Operating models 

Abbreviations and exchange rates 

PartnerBASE™ and market data annexe 

Finaccord 

 

2.0 MARKET BACKGROUND

Banks and other lending institutions covered 

Economic background 

Brazil's economy has performed very strongly in recent years... 

…with substantial natural resources boosting growth 

The service sector accounts for over two thirds of Brazilian GDP 

In the World Bank's Ease of Doing Business Index, Brazil's is ranked only 126th in the world 

Introduction to the banking sector 

In terms of its total number of retail customers Bradesco leads the market 

Government-owned Banco do Brasil is ranked second by number of customers 

As a percentage of GDP, lending to the private sector has almost doubled since 2003... 

... with consumer credit having increased as a consequence of several factors 

Retail sector card issuers account for the majority of credit cards in circulation in Brazil 

The banking sector is fairly concentrated with the ten largest banks accounting for over 80% of assets... 

... partly as a result of mergers and acquisitions involving Banco Itaú and Bradesco 

Introduction to bancassurance 

Around 30% of Bradesco's profits are attributable to its insurance operations 

MAPFRE and Zurich have both entered into bancassurance joint ventures in recent years... 

... with other insurers having established important strategic partnerships 

The bancassurance channel is characterised by relatively 'light touch' regulation in Brazil 

 

3.0 INVESTMENT-RELATED LIFE INSURANCE AND RETIREMENT SAVINGS 

Insurance market size and growth 

The market for retirement savings experienced rapid growth between 2008 and 2012 

Capitalisation bonds constitute one of the most successful investment-related products in Brazil 

Retirement savings are mostly configured as life policies such as PGBLs and VGBLs 

Distribution share of banks 

Bancassurers accounted for around 80% of the total life insurance market in 2012 

Bancassurance provision rates, operating models and partnerships 

Investment-related life insurance 

Only the larger banking networks distribute forms of investment-related life insurance 

Bradesco Capitalização is the leading provider by weighted share of partnerships… 

…with two joint venture providers ranked second and third 

Icatu Capitalização has established ties with a total of seven banking organisations 

A significant number of banking organisations do not distribute investment-related life insurance

Retirement savings 

Provision of retirement savings products is also limited to the larger banking networks 

BrasilPrev Seguros holds distribution ties with two government-owned banking organisations

At least 12 insurance companies sell through the bancassurance channel in this field

Performance of key bancassurance underwriters

Over three quarters of the capitalisation bond market is controlled by bank-owned insurers... 

…and key bancassurance underwriters exert a near-monopoly on the PGBL and VGBL markets 

 

4.0 PROTECTION-RELATED LIFE INSURANCE

Insurance market size and growth 

Protection-related life insurance grew by 11.9% per annum in real terms between 2008 and 2012... 

... albeit a substantial proportion of this is probably due to creditor insurance 

Distribution share of banks 

Bancassurance provision rates, operating models and partnerships 

Risk life insurance 

Familiar captive and joint venture underwriters dominate distribution deals for risk life policies... 

... with Bradesco Seguros and Itaú Seguros ranked first by weighted share of partnerships 

Aliança do Brasil was configured as a joint venture by Banco do Brasil and MAPFRE in 2010 

CNP's Caixa Seguradora joint venture directly serves around 4.8 million clients in Brazil 

11 banking organisations have established external partnerships in this field 

Critical illness insurance 

Relatively few banking institutions in Brazil sell critical illness insurance 

MetLife benefits from its strategic partnership with Citibank 

Income protection insurance 

Income protection insurance is rarely marketed by banking organisations in Brazil 

Performance of key bancassurance underwriters 

Key bancassurance underwriters have grown rapidly in the market for protection-related life insurance 

 

5.0 ACCIDENT AND HEALTH INSURANCE 

Insurance market size and growth 

The market for accident and health insurance was worth almost USD 12.5 billion in 2012 

Distribution share of banks 

Bancassurance provision rates, operating models and partnerships 

Accident insurance 

Accident insurance is one of the forms of insurance most commonly marketed by banks 

Once again, in terms of weighted partnership share, captive and joint venture underwriters are prominent 

Icatu Seguros claims distribution relationships with five separate banking networks 

36 banking institutions have no apparent arrangement for selling accident insurance 

Medical expenses insurance 

Few banking organisations sell medical expenses insurance 

Health / hospital cash plans 

Nine bancassurance initiatives were identified in this field 

Performance of key bancassurance underwriters 

Captive and joint venture underwriters have performed strongly in the accident insurance market 

 

6.0 PERSONAL MOTOR AND HOUSEHOLD INSURANCE 

Insurance market size and growth 

Personal motor insurance gross written premiums declined in real terms between 2008 and 2012 

Car owners must acquire DPVAT policies in order to license and register their vehicles 

Distribution share of banks 

Bancassurance provision rates, operating models and partnerships 

Personal motor insurance 

Over 20 banks and other lending institutions have an arrangement for selling personal motor insurance 

MAPFRE Vera Cruz is ranked second behind Bradesco Seguros by weighted share of partnerships 

Non-captive underwriters are limited mainly to partnerships with small and medium-sized institutions 

Household insurance 

The provision rate for household insurance is higher than that for personal motor insurance 

Zurich has established partnerships with two banking entities 

At least 20 distinct underwriting entities compete for household insurance partnerships with banks 

Performance of key bancassurance underwriters 

Captive and joint venture underwriters control around one third of the total motor insurance market... 

... albeit they have expanded their combined market share more noticeably in property insurance 

 

7.0 CREDITOR INSURANCE 

Consumer lending market size and growth 

Mortgage lending 

Residential mortgages in Brazil grew at a nominal compound annual rate of 45.8% between 2008 and 2012 

Non-mortgage lending 

The value of total non-mortgage consumer lending balances is more than twice that of mortgage balances 

Credit and other pay later cards 

Card issuers owned by or working closely with retail brands are highly influential in Brazil 

Rising default rates have been a problem for credit card issuers in recent years 

Creditor insurance provision rates, operating models and partnerships 

Creditor insurance linked to mortgages 

There are few mortgage lenders in Brazil but most of these sell related creditor insurance 

Non-captive providers active in this arena include Allianz, HDI, SulAmérica and Tokio Marine 

Creditor insurance linked to consumer finance 

Two thirds of entities offering consumer finance have a scheme in place for loan payment protection cover 

Bradesco Seguros possesses both captive and non-captive partnerships 

Cardif has accumulated the highest outright number of distribution partnerships in this sphere 

At least 20 separate underwriters vie for partnerships with lending institutions for this type of cover... 

... although 25 lending institutions have no apparent scheme for in place for this type of creditor insurance 

Creditor insurance linked to credit cards 

Over 20 schemes for card-related creditor insurance are up and running in Brazil 

Zurich and Porto Seguro benefit from partnerships with large retail sector card distributors 

Creditor insurance risk coverage 

There is apparent room for provision rates for temporary incapacity and unemployment to develop further 

Performance of key bancassurance underwriters 

According to the official data source, Caixa Seguradora is the market leader in creditor insurance... 

... having held this position consistently between 2007 and 2011 

Creditor insurance market size, growth and forecast 

The market for all forms of creditor insurance is growing rapidly in Brazil... 

... with demand for mortgage-related policies rising at the greatest speed 

Official statistics exist to help quantify the market for creditor insurance in Brazil 

 

LIST OF GRAPHICS / TABLES

0.0 EXECUTIVE SUMMARY 

Overview of bancassurance provision rates for different types of insurance in Brazil, 2012 

1.0 INTRODUCTION 

Banks and other lending institutions in Brazil contacted by Finaccord, segmented by type 

2.0 MARKET BACKGROUND 

Key economic indicators for Brazil, 2012 

3.0 INVESTMENT-RELATED LIFE INSURANCE AND RETIREMENT SAVINGS 

Gross written premiums for investment-related life insurance and retirement savings in Brazil, 2008 to 2012 

Gross written premiums for investment-related life insurance and retirement savings in Brazil, 2008 to 2012 (data) 

Bancassurance provision of investment-related life insurance in Brazil, 2012: provision rate, operating models and weighted provider share of partnerships 

Bancassurance provision of retirement savings in Brazil, 2012: provision rate, operating models and weighted provider share of partnerships 

Market share in capitalisation bonds of key bancassurance underwriters in the Brazil, 2007 to 2011 

Market share in VGBL insurance of key bancassurance underwriters in Brazil, 2007 to 2011 

Market share in PGBL insurance of key bancassurance underwriters in Brazil, 2007 to 2011 

4.0 PROTECTION-RELATED LIFE INSURANCE 

Gross written premiums for protection-related life insurance in Brazil, 2008 to 2012 

Gross written premiums for protection-related life insurance in Brazil, 2008 to 2012 (data) 

Bancassurance provision of risk life insurance in Brazil, 2012: provision rate, operating models and weighted provider share of partnerships 

Bancassurance provision of critical illness insurance in Brazil, 2012: provision rate, operating models and weighted provider share of partnerships 

Bancassurance provision of income protection insurance in Brazil, 2012: provision rate, operating models and weighted provider share of partnerships 

Market share in protection-related life insurance of key bancassurance underwriters in Brazil, 2007 to 2011 

5.0 ACCIDENT AND HEALTH INSURANCE 

Gross written premiums for accident and health insurance in Brazil, 2008 to 2012 

Gross written premiums for accident and health insurance in Brazil, 2008 to 2012 (data) 

Bancassurance provision of accident insurance in Brazil, 2012: provision rate, operating models and weighted provider share of partnerships 

Bancassurance provision of medical expenses insurance in Brazil, 2012: provision rate, operating models and weighted provider share of partnerships 

Bancassurance provision of health / hospital cash plans in Brazil, 2012: provision rate, operating models and weighted provider share of partnerships 

Market share in accident insurance of key bancassurance underwriters in Brazil, 2007 to 2011 

6.0 PERSONAL MOTOR AND HOUSEHOLD INSURANCE 

Gross written premiums for personal motor and household insurance in Brazil, 2007 to 2011 

Gross written premiums for personal motor and household insurance in Brazil, 2007 to 2011 (data) 

Bancassurance provision of personal motor insurance in Brazil, 2012: provision rate, operating models and weighted provider share of partnerships 

Bancassurance provision of household insurance in Brazil, 2012: provision rate, operating models and weighted provider share of partnerships 

Market share in total motor insurance of key bancassurance underwriters in Brazil, 2007 to 2011 

Market share in total property insurance of key bancassurance underwriters in Brazil, 2007 to 2011 

7.0 CREDITOR INSURANCE 

Residential mortgage lending balances outstanding in Brazil (absolute and per capita), 2008 to 2012 

Consumer non-mortgage lending balances outstanding in Brazil (absolute and per capita), 2008 to 2012 

Credit and other pay later cards issued and per capita in Brazil, 2008 to 2012 

Key data points for the consumer lending market in Brazil, 2008 to 2012 

Provision of creditor insurance linked to mortgages in Brazil, 2012: provision rate, operating models and weighted provider share of partnerships 

Provision of creditor insurance linked to consumer finance in Brazil, 2012: provision rate, operating models and weighted provider share of partnerships 

Provision of creditor insurance linked to credit cards in Brazil, 2012: provision rate, operating models and weighted provider share of partnerships 

Risk coverage of creditor insurance policies in Brazil, segmented by type of underlying product, 2012 

Market share in creditor insurance of key bancassurance underwriters in Brazil, 2007 to 2011 

Creditor insurance gross written premiums in Brazil, segmented by policy type, 2008, 2012 and 2016 

Creditor insurance gross written premiums in Brazil, segmented by cover type, 2008, 2012 and 2016 

Creditor insurance gross written premiums in Brazil, segmented by policy and cover type, 2008, 2012 and 2016 (data) 

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