AM BestTV: Interest Rates, Economy Drive Negative Outlook of Brazil’s Reinsurance Sector, Says AM Best Senior Financial Analyst

Business Wire

OLDWICK, N.J.--(BUSINESS WIRE)-- In this episode of ^AMBestTV, Guy Simoes, senior financial analyst, AM Best, said that despite a negative market segment outlook, Brazil's reinsurers are still growing and operating in a relatively underpenetrated market. Click on http://www.ambest.com/v.asp?v=brazilre120 to view the entire program.

AM Best is maintaining its negative market segment outlook on Brazil's reinsurance market for 2020, although Simoes said signs of improvement are beginning to emerge.

“The negative outlook is based on the macroeconomic instability in the country; although, there has been improvement in the last few years,” said Simoes. “Additionally, interest rates were higher and that drove up operating performance and profits of reinsurance companies. However, now, in a lower interest rate environment, those earnings are coming down.”

Simoes added that regulators have aided in creating some positive market movement. “Regulators in Brazil have opened up the reinsurance market over the last decade to help create a more stable reinsurance market with more transparency, accountability and governance, which are very favorable and desired features for the reinsurance market.”

Looking to the future, Simoes said the outlook for the Brazilian reinsurance market could become stable, once again, “if there is a continuation of the macroeconomic reforms, as well as more reforms to create a favorable environment for investments. Also, the country needs an increase in underwriting profits, which are even more important,” he said.

To access a copy of this market segment report, titled, “Market Segment Outlook: Brazil Reinsurance,” please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=293425.

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^AMBestTV covers exclusive AM Best and insurance industry information and reports, targeted topics and key developments in the insurance, reinsurance and related sectors daily. Sign up for alerts of episodes at www.ambest.com/multimedia/ambtvsignup.html. View ^AMBestTV episodes at www.ambest.tv.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.