Microinsurance in Brazil

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Microinsurance in Brazil. Brazilian Population Outlook. Brazilian Insurance Market Overview. Insurance, Open Private Pension Funds and Capitalization Sectors Participation in the GDP. 3,10 %. 2,97%. 2,53%. 1,00%. 2006. 1995. 2000. 1994. Market Overview. Market Premium Evolution - PowerPoint PPT Presentation

Transcript of Microinsurance in Brazil

  • MicroinsuranceinBrazil

  • Brazilian Population Outlook

  • Grf4

    96031971

    88356649

    Source: IBGE - National Household Sample Survey 2005

    Populaao Total: 184.388.620

    Population: 184,388,620

    PEA

    Populaao Total:Economically Active Population: 96,031,971Population not classified as EAP: 88,356,649

    184,388,6209603197188356649

    PEA

    Source: IBGE - National Research / 2005

    Populaao Total: 184.388.620

    Distribuio de Renda

    Sem rendimento51,573,651

    At 138,243,804

    1 a 229,669,537

    2 a 311,165,917

    3 a 510,463,858

    5 a 106,828,965

    10 a 202,583,108

    Mais de 201,023,622

    Distribuio de Renda

    0

    0

    0

    0

    0

    0

    0

    0

    Fonte: IBGE - Pesquisa Nacional por Amostra de Domiclios 2005

    Salrios Mnimos

    Distribuio de Renda

    Posio da PEA na ocupao

    Trabalhadores na construo para o prprio uso122,576

    Empregadores3,683,355

    Trabalhadores na produo para o prprio consumo3,894,016

    No remunerados5,913,903

    Trabalhadores domsticos6,658,627

    Conta-prpria18,831,511

    Empregados47,985,988

    87,089,976

    Posio da PEA na ocupao

    0

    0

    0

    0

    0

    0

    0

    Fonte: IBGE - Pesquisa Nacional por Amostra de Domiclios 2005

    Posio da PEA na ocupao

    "Informalidade"

    Com carteira de trabalho assinada: 28.793.15228,793,152OBS: Empregados e trabalhadores domsticos

    Militares e funcionrios pblicos estatutrios: 5.490.7925,490,792

    Outros / Informais: 20.360.04320,360,043OBS: Empregados e trabalhadores domsticos

    "Informalidade"

    0

    0

    0

    Fonte: IBGE - Pesquisa Nacional por Amostra de Domiclios 2005

    Distribuio percentual das categorias empregadas

    Pop Urb e Rur

    IdadeUrbanaRural

    0 a 14 anos38,849,3389,994,660

    15 a 49 anos99,327,85619,297,623

    50 anos ou mais28,923,7825,729,286

    Pop Urb e Rur

    00

    00

    00

    Fonte: IBGE - Pesquisa Nacional por Amostra de Domiclios 2005

    Urbana

    Rural

    Idade

    Distribuio da populao por domiclio

  • Grf8

    51573651

    38243804

    29669537

    11165917

    10463858

    6828965

    2583108

    1023622

    Fonte: IBGE - National Household Sample Survey 2005

    Number of Minimum Wages

    Income Distribution

    PEA

    Populaao Total:Populao Economicamente Ativa: 96.031.971Populao no classificada como PEA: 88.356.649

    184,388,6209603197188356649

    PEA

    96031971

    88356649

    Fonte: IBGE - Pesquisa Nacional por Amostra de Domiclios 2005

    Populaao Total: 184.388.620

    Distribuio de Renda

    without income51,573,651

    up to 138,243,804

    1 to 229,669,537

    2 to 311,165,917

    3 to 510,463,858

    5 to 106,828,965

    10 to 202,583,108

    Over 201,023,622

    Distribuio de Renda

    0

    0

    0

    0

    0

    0

    0

    0

    Fonte: IBGE - Pesquisa Nacional por Amostra de Domiclios 2005

    Number of Minimum Wages

    Income Distribution

    Posio da PEA na ocupao

    Trabalhadores na construo para o prprio uso122,576

    Empregadores3,683,355

    Trabalhadores na produo para o prprio consumo3,894,016

    No remunerados5,913,903

    Trabalhadores domsticos6,658,627

    Conta-prpria18,831,511

    Empregados47,985,988

    87,089,976

    Posio da PEA na ocupao

    0

    0

    0

    0

    0

    0

    0

    Fonte: IBGE - Pesquisa Nacional por Amostra de Domiclios 2005

    Posio da PEA na ocupao

    "Informalidade"

    Com carteira de trabalho assinada: 28.793.15228,793,152OBS: Empregados e trabalhadores domsticos

    Militares e funcionrios pblicos estatutrios: 5.490.7925,490,792

    Outros / Informais: 20.360.04320,360,043OBS: Empregados e trabalhadores domsticos

    "Informalidade"

    0

    0

    0

    Fonte: IBGE - Pesquisa Nacional por Amostra de Domiclios 2005

    Distribuio percentual das categorias empregadas

    Pop Urb e Rur

    IdadeUrbanaRural

    0 a 14 anos38,849,3389,994,660

    15 a 49 anos99,327,85619,297,623

    50 anos ou mais28,923,7825,729,286

    Pop Urb e Rur

    00

    00

    00

    Fonte: IBGE - Pesquisa Nacional por Amostra de Domiclios 2005

    Urbana

    Rural

    Idade

    Distribuio da populao por domiclio

  • Grf11

    28793152

    5490792

    20360043

    Source: IBGE - National Household Sample Survey 2005

    Employed Population - Grouped by Category

    PEA

    Populaao Total:Populao Economicamente Ativa: 96.031.971Populao no classificada como PEA: 88.356.649

    184,388,6209603197188356649

    PEA

    0

    0

    Fonte: IBGE - Pesquisa Nacional por Amostra de Domiclios 2005

    Populaao Total: 184.388.620

    Distribuio de Renda

    Sem rendimento51,573,651

    At 138,243,804

    1 a 229,669,537

    2 a 311,165,917

    3 a 510,463,858

    5 a 106,828,965

    10 a 202,583,108

    Mais de 201,023,622

    Distribuio de Renda

    0

    0

    0

    0

    0

    0

    0

    0

    Fonte: IBGE - Pesquisa Nacional por Amostra de Domiclios 2005

    Salrios Mnimos

    Distribuio de Renda

    Posio da PEA na ocupao

    Trabalhadores na construo para o prprio uso122,576

    Empregadores3,683,355

    Trabalhadores na produo para o prprio consumo3,894,016

    No remunerados5,913,903

    Trabalhadores domsticos6,658,627

    Conta-prpria18,831,511

    Empregados47,985,988

    87,089,976

    Posio da PEA na ocupao

    0

    0

    0

    0

    0

    0

    0

    Fonte: IBGE - Pesquisa Nacional por Amostra de Domiclios 2005

    Trabalhadores na construo para o prprio uso

    Posio da PEA na ocupao

    "Informalidade"

    Formal Employees: 28,793,15228,793,152OBS: Empregados e trabalhadores domsticos

    Militaries and Public Servants: 5,490,7925,490,792

    Others / Informal Employees: 20.360.04320,360,043OBS: Empregados e trabalhadores domsticos

    "Informalidade"

    0

    0

    0

    Fonte: IBGE - Pesquisa Nacional por Amostra de Domiclios 2005

    Distribuio percentual das categorias empregadas

    Pop Urb e Rur

    IdadeUrbanaRural

    0 a 14 anos38,849,3389,994,660

    15 a 49 anos99,327,85619,297,623

    50 anos ou mais28,923,7825,729,286

    Pop Urb e Rur

    388493389994660

    9932785619297623

    289237825729286

    Fonte: IBGE - Pesquisa Nacional por Amostra de Domiclios 2005

    Urbana

    Rural

    Idade

    Distribuio da populao por domiclio

  • Grf12

    388493389994660

    9932785619297623

    289237825729286

    Source: IBGE - National Household Sample Survey 2005

    Urban

    Rural

    Age

    Urban Concentration

    PEA

    Populaao Total:Populao Economicamente Ativa: 96.031.971Populao no classificada como PEA: 88.356.649

    184,388,6209603197188356649

    PEA

    96031971

    88356649

    Fonte: IBGE - Pesquisa Nacional por Amostra de Domiclios 2005

    Populaao Total: 184.388.620

    Distribuio de Renda

    Sem rendimento51,573,651

    At 138,243,804

    1 a 229,669,537

    2 a 311,165,917

    3 a 510,463,858

    5 a 106,828,965

    10 a 202,583,108

    Mais de 201,023,622

    Distribuio de Renda

    0

    0

    0

    0

    0

    0

    0

    0

    Fonte: IBGE - Pesquisa Nacional por Amostra de Domiclios 2005

    Salrios Mnimos

    Distribuio de Renda

    Posio da PEA na ocupao

    Trabalhadores na construo para o prprio uso122,576

    Empregadores3,683,355

    Trabalhadores na produo para o prprio consumo3,894,016

    No remunerados5,913,903

    Trabalhadores domsticos6,658,627

    Conta-prpria18,831,511

    Empregados47,985,988

    87,089,976

    Posio da PEA na ocupao

    0

    0

    0

    0

    0

    0

    0

    Fonte: IBGE - Pesquisa Nacional por Amostra de Domiclios 2005

    Trabalhadores na construo para o prprio uso

    Posio da PEA na ocupao

    "Informalidade"

    Com carteira de trabalho assinada: 28.793.15228,793,152OBS: Empregados e trabalhadores domsticos

    Militares e funcionrios pblicos estatutrios: 5.490.7925,490,792

    Outros / Informais: 20.360.04320,360,043OBS: Empregados e trabalhadores domsticos

    "Informalidade"

    0

    0

    0

    Fonte: IBGE - Pesquisa Nacional por Amostra de Domiclios 2005

    Distribuio percentual das categorias empregadas

    Pop Urb e Rur

    AgeUrbanRural

    0 to 14 years-old38,849,3389,994,660

    15 to 49 years-old99,327,85619,297,623

    50 years-old or more28,923,7825,729,286

    Pop Urb e Rur

    Fonte: IBGE - Pesquisa Nacional por Amostra de Domiclios 2005

    Urban

    Rural

    Idade

    Distribuio da populao por domiclio

  • BrazilianInsurance Market Overview

  • 1,00%2,53%3,10%1994 19952006Insurance, Open Private Pension Funds and Capitalization Sectors Participation in the GDP2,97%

    2000

  • Market Overview

    MarketNumberInsurance Companies115Open Pension Funds26Capitalization Companies18Insurance Agents (Individuals) 39.518Insurance Agencies (Companies)22.131

  • Market Premium Evolution(millions R$)... 1,00%1994199532.75852.30856.92764.60720052000...199520061999200428.25916.33110.035 US$ 29,676 MM - 2006US$ 2,1771...

  • Brazilian Market Perspectives

  • Microinsurance or Seguro Popularin Brazil:Included in theBrazilian Government policyfor micro-finances

  • Government Policy for MicroinsuranceGeneral Insurance: products for the low-income people and for the formal and informal micro-entrepeneurs (SUSEP)

    Rural Area: products to protect low-income family farmers (MDA Ministry of Agrarian Development)

  • SUSEPs First ActionsEnd of 2003 internal discussions aiming at the design of simple and low-cost products

    September/2004 - Circular SUSEP 267/2004 popular group life insurance product

    November/2006 - Circular SUSEP 306/2006 - popular automobile product

  • Parallel IncentivesAlternative distribution channels: bankassurance, internet, call-centers, utility lines prviders and concessionaries such as electricity and gas and phoneOmbudsman RuleFinancial Education Program2004 - Decree 5,172 - lowered the IOF (Financial Transactions Tax) for life insurance from 7% to 2%, reaching 0% in 2006

  • Life Products CharacteristicsMain target: banks clients with monthly income under 3 min wagesBasic Coverage: death by any cause Additional Coverage: funeral, cesta bsica or typical family food basket, drugstore coverage.Lowest Premiums: R$ 6 (US$ 3) / Coverage: R$ 3,000 (US$1,500)

  • Automobile Products Characteristics

    Vehicles from 10 to 20 years-oldMore strict acceptance criteriaFew additional coverages compared to traditional products Higher deductible for partial indemnityLower Premiums compare to traditional plans

  • Other Lines CharacteristicsFire and other non-life coverages (Multiple Peril)There are no specific rules on MINo data segregation in the reports sent by the insurer to SUSEP.The same product may be used for all kinds of consumersDistribution channels differentiate the target public

  • Farm Family Life InsuranceFarm Family Life Insurance - jointly designed by Bank of Brazil and MDA (2004), for family farmers associated to the National Agriculture Strengthening Program for Family Farmers (PRONAF) on agricultural funding operations (mandatory enrollment)Coverage: Death and Extra IndemnityDistribution Channel: BBs agenciesCapital Limit: R$ 600,00 to R$ 40.000,00 Premium: R$ 2,80/year for R$600,00: Death and R$ 600,00:Extra Indemnity

  • Distribution ChannelsIn Brazil it is not mandatory to have a broker intermediation when commercializing an insurance product. The brokerage fee is mandatory.Social and professional associations and labour unions, Utility lines providers and concessionaires of public services, such as electricity and gas and phoneCall-centers and internetThe retail banks are the main distribution channels: more than 90% of Life MI products through bankassurance, including ATMs

  • Main ResultsLife Insurance good performance inspired other lines (Automobile, Fire,)

    The biggest retail banks commercialize MI life productsThe biggest life insurers are domestic and part of big national conglomerates, including big retail bank

  • Main ResultsSUSEPs rules stimulated discussions on MI and sensitized the industry the theme was unknown before 2004Insurers preferred to design their own products, focus on low-income peopleIndustry discovered low-income segment:The poor are insurable

  • Main ConclusionsProducts did not change so much. The commercialization focus changedImportance of the dialogue with industry for developing a new sectorTax relief has positive effects on MI lines seen that reduces insurance costsFlexibility for distribution channels fundamental role in the consumer market growth

  • Main ConclusionsOmbudsman Rule: important mechanisms to safeguard the consumers rights, especially of the less fortunate onesFinancial Education should be encourage, leading to a conscious consumerBrazilian market has few informal schemes when compared to other countries, facilitating supervision

  • SUSEPs ChallengesSegregate MI statistical data creating no additional onus for insurers

    Maintain an adequate regulatory environment, balancing: promotional aspects X prudential requirements

    Raise the perception level of other stakeholders

  • SUSEPs ChallengesEngage in dialogue with other Brazilian supervisors and policymakers for convergence, i.e.:Cooperation exchangeTax relief for other lines (Receita Federal)Encourage new lines, focus on rural lines (MDA) Promote financial education for low-income people (Ministry of Education)

  • Thank youObrigada

    Regina L. G. [email protected]