Pandemic makes Brazilians believe in the importance of life insurance

A report by the National Private Pension and Life Federation (Fenaprevi), based on data from the Superintendence of Private Insurance (Susep), shows that people's insurance collected R$62.5 billion in premiums in 2023, an increase of 8% compared to 2022. The result, according to the organization, is the highest in the historical series, even considering the effect of inflation (in real terms), since 2014.

The pandemic has made Brazilians believe in the importance of life insurance, says Jorge Andrade, statutory director of Fenaprevi, and also president of Capemisa Seguradora de Vida e Previdência S.A., to Monitor Mercantil.

He attributes the 8% growth also to the investments the sector has made in technology to make the contracting process faster and simpler, as well as training and support for insurance brokers. "These were the catalysts that together made the market grow in 2023," Andrade points out. He adds, however, that looking at the timeline, we can't forget that the pandemic has made the world's population rethink the importance of life insurance in guaranteeing families' financial stability.

The director recalls that recurring questions during the pandemic, such as dreams to be fulfilled or not, the purchase of a property, a child's school or whether they would make it to college, thinking about the future and about people was of great importance for the growth of the sector. "We have stability with life insurance," he sums up.

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Asked what the sector's biggest challenge is, Andrade said that it has to do with financial education. "Young people need to know how to handle their personal finances. This recognition permeates all social classes and causes Brazilian families to lose time and the opportunity to protect their assets, which only life insurance can guarantee," he said. He mentions that life insurance can protect your family's assets, guaranteeing the payment of costs related to succession and inventory, for example. Andrade clarifies, however, that this also includes the less well-off. "Funeral insurance can cost less than R$1 a day," he says.

Regarding expectations for 2024, Andrade says that there will be more growth, because in addition to investments in technology and in training brokers, he sees an improvement in the job market and in income, which opens up space for life insurance in families' budgets.

Premiums by line of business Breaking down the amount of premiums by line of business, 48% correspond to Life insurance (Individual and Collective), followed by 27% in Liability insurance and 13% in Personal Accident. At the same time, the insurances with the highest growth in the period were Funeral, Individual Life and Critical Illness/Terminal Illness, which recorded increases of 23.7%, 20.8% and 11.5% respectively.

"The premiums collected exceeded the 2022 result, but there is still a lot to be done in this market. When compared to other countries, Brazil still falls short of its potential: the share of life insurance premiums in the Gross Domestic Product (GDP, the sum of all goods and services produced in the country) is only 0.6%. We are in 41st place in the 2022 OECD ranking in terms of the volume of life insurance premiums, considering 53 nationalities.

Countries with a GDP relatively close to Brazil's have life insurance markets with a larger share," explained Edson Franco, president of Fenaprevi. Payment of benefits The Federation's survey also reveals that in 2023 R$15.1 billion were paid out in benefits to the insured population (claims), a result 5.7% higher than in 2022. The biggest growth occurred in Travel, up 58.6%; Endowment insurance (18.8%) and Serious / Terminal Illness, up 17.6%.

"The results for the year confirm the importance of people's insurance to the population, the sector has never transferred so many resources to society. Between 2020 and 2023, R$58.8 billion in indemnities were paid out. Of which R$15.1 billion in the last year alone," says the president of the Federation. "The insured population is increasingly benefiting from the protection provided by personal insurance. The results show that," says Franco.