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5 year average annual growth by segment (2010 to 2015)
Source: SUSEP, Terra Brasis Re, ANS, Banco Central do Brazil. Note: Nominal values
March 2016
Index:
Introduction ........................ 2
Brazilian General Insurance
Market ................................ 3
Brazilian Reinsurance Market 7
Results of Local Reinsurers . 13
Results by Lines of Business 23
Group: Property ................. 24
Group: Financial Risks ........ 25
Group: Rural ..................... 26
Group: Liability .................. 27
Group: Marine ................... 28
Exhibit 1: Brazilian Insurance
Segments per Susep’s Classes29
Exhibit 2: List of Technical
Terms ............................... 30
Exhibit 3: Main Indexes of
Local Reinsurers ................ 31
Acknowledgements ............ 32
Even though the Brazilian Reinsurance Market is the focus of Terra Report, as we traditionally do, we start this issue by quickly elaborating
on the composition and recent development of the Brazilian Insurance Market.
Analyzing the growth of these different segments that composes the
Brazilian Insurance Market, we can observe a less growth of the majority of the segments in 2015 compared to 2014. However, the vast majority
of segment continues to grow at a higher pace than GDP.
In the 12 months aggregate ending in March 2016, the Volume of the
Brazilian Reinsurance Market (gross of commission) stood at BRL 10.2bn against BRL 9.3bn registered in the same period of 2015, an annual rate
growth of 10.3%.
In the 12 months aggregate ending in March 2016, the Reinsurance
Volume (gross of commission) written by local reinsurers reached from
Brazilian Insurers stood at BRL 7.4bn, corresponding to a 10.5% increase
when compared to the BRL 6.7bn registered in the 12 months aggregate ending in March 2015.
In the same period, the volume coming from offshore cedants reached
BR1.3bn against BRL 527.7 million showed in the same period of the previous year, an annual growth of 148.4%, an expressive volume,
representing 17.8% of the volume received from Brazilian cedants
compared to 7.9% registered in the same period of 2015.
In the first quarter of 2016, the local reinsurers produced a net profit of
BRL 262 million, in contrast to a net profit of BRL 193 million registered
in the same period of 2015. In this period, IRB profited BRL 212 million, while the other local reinsurance reported a positive result of BRL 50
million.
Ratings: A.M. Best
B++ Global (Investment Grade)
Stable Outlook
Standard & Poor’s
brA+ Local Stable Outlook
Shareholders: : Shareholders:
Terra Report Report on the Brazilian Reinsurance Market
Issu
e
nu
mb
er
19
Publication Date: July 11th, 2016
March 2016 Terra Report Terra Brasis Resseguros
2
Introduction
Dear Reader,
As we do every year, this edition of Terra Report brings a brief analysis of the composition and evolution of the Brazilian Insurances Market in 2015.
We can observe a clear deceleration in premium growth across almost all market segments. In any way, despite a political and economic scenario which has been increasingly challenging, the sector keeps growing above Brazilian GDP.
A point worth highlighting is the resilience of the Brazilian Reinsurance sector, considering the challenging conditions of the Brazilian economy. In 2015, the sector registered a growth higher than the previous year.
This edition also brings an analysis of the first quarter of 2016. It is noted a stable pace of growth of the reinsurance volume, around 10%, with a short increase of reinsurance premium volume ceded to offshore reinsurances. This movement is very similar to the one registered in the same period of 2015. In this way, it is worth mentioning that three months is rather a short period to analyze and the data might contain accounting distortions. A couple of additional months will be needed to verify whether this is in fact a trend.
Although local’s reinsurance market has presented a higher net profit in the first quarter of 2016 compared to the same period of 2015, the present moment calls for care in any analysis. In the analyzed period, the local reinsurers showed a net profit of R$ 261 million compared to R$ 193 million registered in the first quarter of 2015.
The challenges go beyond Brazilian’s borders, with events which should impact not only the global
insurance and reinsurance market, but also the world scenario as a whole and because of that they require more attention. In the domestic scenario, we can mention the impeachment process of the
Brazilian president, in addition to the repercussions of police investigations, such as the Car Wash. In the
international scenario, we can cite the exit of the United Kingdom of Europe Union and The United States presidential elections.
Happy reading, Priscila Grossi, ARe Risk Analyst Terra Brasis Resseguros
March 2016 Terra Report Terra Brasis Resseguros
3
Brazilian General Insurance Market
Even though the Brazilian Reinsurance Market is the focus of Terra Report, as we traditionally do, we start this issue by quickly elaborating on the composition and recent development of the Brazilian
Insurance Market. For a more extensive analysis refer to the December 2012 issue of Terra Report.
As previously mentioned, to analyze what is usually called the Brazilian Insurance Market is not
straightforward. Often the definition of insurance market includes pension products and premium bonds
(“Capitalização”). Other times, health insurance is left out as it is not regulated by SUSEP, but by the ANS.
Therefore, we believe that to properly analyze the market it is necessary to break it down into different segments. We defined eight segments, as shown and described below. In Exhibit 1 we show the
parameters used in this classification.
2015 Gross Written Premium and Contribution per Segment (BRL billion)
Source: SUSEP, ANS, Terra Brasis Re. For health insurance only insurers were considered, health plans were excluded.
Analyzing the growth of these different segments we can observe a less growth of the majority of the segments in 2015 compared to 2014. Roughly speaking, the segments grew last year by about 10%
compared to the previous year.
Premium Growth per Segment in 2015/2014 Premium Growth per Segment in 2014/2013
Source: SUSEP, ANS, Terra Brasis Re, Banco Central do Brasi
Note: Nominal values
Source: Susep, ANS, Terra Brasis Re, Banco Central do Brasi
Note: Nominal values
However, the vast majority of segment continues to grow at a higher pace than GDP, the only exceptions
being P&C Corporate, P&C Personal Lines and Premium Bonds segments. Reinsurance and Life and
Accident are the only segments that grew more in 2015 than in 2014.
March 2016 Terra Report Terra Brasis Resseguros
4
Looking at a longer-term horizon, it is possible to note that all segments continue to show a growth above Brazilian GDP Economy. Despite of challenging Brazilian macroeconomic scenario, we believe this
behavior should continue for a number of years.
Average Annual Growth Over the Past 5 years per Segment (2010 to 2015)
Source: SUSEP, Terra Brasis Re, ANS, Banco Central do Brazil Note: Nominal values
March 2016 Terra Report Terra Brasis Resseguros
5
Now we follow with our usual analysis. The General Insurance Market, defined as per methodology
presented on Exhibit 1, maintained the downward movement in the pace of growth during the first
months of 2016, its process have started in 2014.
For the 12 months aggregate ending in March 2016, Brazilian Market generated BRL 86.9bn in insurance
premium, compared to BRL 85.0bn in the same period of previous year, representing an annual growth of
2,3% versus 6.7% of the same period in 2015.
Evolution of Insurance Written Premiums (BRL bn) Growth of Insurance Written Premiums
Source: SUSEP, Terra Brasis Re, 12-month aggregate Source: SUSEP, Terra Brasis Re, 12-month aggregate
The Loss Ratio, obtained as a result of occurred losses over earned premium from the Income
Statement of all the insurers from the Brazilian market, showed a worsening in the first quarter of 2016
compared to same period of 2015. In the 12 months aggregate ending in March 2016, the loss ratio
stood at 49.7% against 49.1% in the same period of the previous year.
Loss / Earned Premium Commercial Expense / Earned Premium
Source: SUSEP, Terra Brasis Re, 12-month aggregate
Note: Percentage Values Referring to the Official Insurance Market
Source: SUSEP, Terra Brasis Re, 12-month aggregate
Note: Percentage Values Referring to the Official Insurance Market
The Commercial Expense Ratio, in the 12 months aggregate ending in March 2016, stood in 24.0%
against 23.4% in the 12 months aggregate ending in March 2015, registering a worsening.
March 2016 Terra Report Terra Brasis Resseguros
6
(Administrative, Tax and Other Expenses)
/Earned Premium
Reinsurance Result / Earned Premium
Source: SUSEP, Terra Brasis Re, 12-month aggregate
Note: Percentage Values Referring to the Official Insurance Market
Source: SUSEP, Terra Brasis Re, 12-month aggregate
Note: Percentage Values Referring to the Official Insurance Market
The Administrative Expense Ratio (including taxes and other expenses) also showed a
worsening in the analyzed period, finishing the 12 months aggregate ending in March 2016 in 17.6%
versus 15.1% presented in the same period of the previous year.
In the same period, the Reinsurance Result Ratio, defined as reinsurance result divided by earned
premium, stood in 0.4% against 1.4% in the same period of 2015. It means that during the 12 months
ending in March 2016, Insurance Companies incurred in lower expenses with reinsurance when compared
with the same period of 2015.
The Combined Ratio, including the reinsurance result ratio, showed a slight worsening, closing the 12
months aggregate ending in March 2016 in 91.7% compared to 89.1% registered in the same period of
2015, as a result of a deterioration in the set of indexes mentioned above.
Combined Ratio, including reinsurance result ratio
Source: SUSEP, Terra Brasis Re, 12-month aggregate
March 2016 Terra Report Terra Brasis Resseguros
7
Brazilian Reinsurance Market
We start the analysis in this section using the past 12-month aggregate data
In the 12 months aggregate ending in March 2016, the Volume of the Brazilian Reinsurance Market
(gross of commission) stood at BRL 10.2bn against BRL 9.3bn registered in the same period of 2015,
an annual rate growth of 10.3%.
12-Month Aggregate Reinsurance Premium Ceded (Gross of Commission, BRL bn)
Source: SUSEP, Terra Brasis Re, 12-month aggregate
In the same period, the proportion of Reinsurance ceded over Insurance premium stood at 11.8% versus
10.9% registered in the same period of 2015, higher level since the opening of the market to private
competition in 2008.
Growth of Reinsurance Premium Ceded and General
Insurance Premium
Reinsurance Premium / General Insurance Premium
Source: SUSEP, Terra Brasis Re, 12-month aggregate Source: SUSEP, Terra Brasis Re, 12-month aggregate
March 2016 Terra Report Terra Brasis Resseguros
8
The 12 months aggregate Coinsurance Premium Volume ending in March 2016 stood at BRL 2.32bn,
an increase of 4.9% compared to BRL 2.21bn recorded in the same period of the previous year.
12-Month Aggregate Coinsurance Premium Ceded (BRL bn)
Source: SUSEP, Terra Brasis Re, 12-month aggregate
The Coinsurance Premium Volume in the 12 months aggregate ending in March 2016 represented 2.7%
of the general Insurance premium volume compared to 2.6% registered in the same period of 2015.
Growth of Coinsurance Premium Ceded Coinsurance Premium / General Insurance Premium
Source: SUSEP, Terra Brasis Re, 12-month aggregate Source: SUSEP, Terra Brasis Re, 12-month aggregate
In the same period, the Reinsurance Volume (gross of commission) written by local reinsurers
reached from Brazilian Insurers stood at BRL 7.4bn, corresponding to a 10.5% increase when compared
to the BRL 6.7bn registered in the 12 months aggregate ending in March 2015. In the same period, the
volume coming from offshore cedants reached BR1.3bn against BRL 527.7 million showed in the same
period of the previous year, an annual growth of 148.4%, an expressive volume, representing 17.8% of
the volume received from Brazilian cedants compared to 7.9% registered in the same period of 2015.
Reinsurance (Gross of Commission) written by Local Reinsurers
Source: SUSEP, Terra Brasis Re, 12-month aggregate
March 2016 Terra Report Terra Brasis Resseguros
9
The local Market closed the 12 months aggregate ending in March 2016 detaining 71% of the volume
ceded by Brazilian Insurers, percentage close to the 72% showed in the same period of 2015.
Growth in Reinsurance Premium Ceded to Local Reinsurers by Brazilian Insurers
Gross Reinsurance Premium Ceded to Local Reinsurers as Percentage of Total Reinsurance Premium Ceded
Source: SUSEP, Terra Brasis Re, 12-month aggregate Source: SUSEP, Terra Brasis Re, 12-month aggregate
The following flowcharts show the volume of reinsurance premiums and retrocession, gross of
commission, in the Brazilian market for the 12 month period ending March 2016 and the preceding 12-
month period.
Reinsurance Flow in the Brazilian Market for the 12 month period ending March 2016 and the preceding 12-month
period (Gross of Commission, BRL mm)
Source: SUSEP, Terra Brasis Re, BRL millions, reinsurance gross of commission figures
March 2016 Terra Report Terra Brasis Resseguros
10
We now move to the analysis of the current year.
Looking now at the first quarter of 2016, Brazilian Insurers generated BRL 2.4bn in ceded reinsurance,
corresponding to an increasing of 6.5% in relation to the same period of 2015, when they generated BRL
2.2bn. The reinsurance written (gross of commission) by local reinsurers during this first three months of
2016 stood at BRL 1.7bn, corresponding to an increase of 1% compared to the same period of 2015.
During this period, the volume of reinsurance (gross of commission) written by IRB was 26% higher than
the same period of the previous year, and other local reinsurers showed a dropped of approximately
17%. In the period, the reinsurance written by offshore reinsurer increased 22%.
Premium Ceded by Brazilian Insurers and Premium Received by Local Reinsurers from January to March (BRL mm)
Source: SUSEP, Terra Brasis Re
The following flowcharts show the volume of reinsurance premiums and retrocession, gross of
commission, in the Brazilian market in the first three months of 2016 and 2015.
Reinsurance Flow in the Brazilian Market January to March 2016 and 2015 (Gross of Commission, BRL mm)
Source: SUSEP, Terra Brasis Re, BRL millions, reinsurance gross of commission figures
March 2016 Terra Report Terra Brasis Resseguros
11
Considering the distribution volume of reinsurance from Brazilian cedants, IRB ended the first quarter of
2016 with a market participation of 37%, while the other reinsurers closed the period with 33% and the
offshore reinsurers 30%.
Reinsurance Market Share (gross of commission ) generated by Brazilian Insurers
Source: SUSEP, Terra Brasis Re
Analyzing only the local reinsurance Market, IRB detained 52% of market share, while the other locals
shared 48% of the rest of the market.
Gross Reinsurance Premium Ceded by Brazilian Insurers (BRL bn)
Participation in the Gross Reinsurance Premium Ceded by Brazilian Insurers
Source: SUSEP, Terra Brasis Re, BRL billions, 12-month aggregate Source: SUSEP, Terra Brasis Re, BRL billions, 12-month aggregate
March 2016 Terra Report Terra Brasis Resseguros
12
The following flowcharts show the volume of reinsurance premiums since 2007, the last year of the
monopolistic reinsurance regime.
Reinsurance Annual Flow in the Brazilian Market since 2007 (Gross of Commission, BRL mm)
Source: SUSEP, Terra Brasis Re, BRL millions, reinsurance gross of commission figures.
2007 2008
66 254
Brazilian 2% Brazilian 7%
Insurers 3.291 Insurers 3.802
1.641 1.937
3.224 3.548
98% 93%
Offshore Offshore
Insurers 22 Insurers 31
2009 2010
565 2.293
Brazilian 13% Brazilian 52%
Insurers 4.286 Insurers 4.458
1.843 914
3.721 2.148
87% 48%
Offshore Offshore
Insurers 84 Insurers 119
2011 2012
2.569 2.588
Brazilian 40% Brazilian 40%
Insurers 6.451 Insurers 6.466
2.144 1.813
3.882 3.878
60% 60%
Offshore Offshore
Insurers 50 Insurers 149
2013 2014
2.980 2.888
Brazilian 36% Brazilian 32%
Insurers 8.259 Insurers 9.004
2.516 2.804
5.279 6.116
64% 68%
Offshore Offshore
Insurers 443 Insurers 451
2015
2.750
Brazilian 27%
Insurers 10.097
3.480
7.347
73%
Offshore
Insurers 1.161
Local
Reinsurers
5.028
Reinsurers
6.230
Offshore
Reinsurers
5.692
Local
Reinsurers
3.763
Offshore
Reinsurers
Local
Reinsurers
3.207
5.495
Offshore
Offshore
1.642
Offshore Offshore
Reinsurers Reinsurers
2.408 3.206
Local
Reinsurers
1.962 1.353
Local
Reinsurers
Offshore
Reinsurers Reinsurers
1.708 2.191
IRB Local
1.605 Reinsurers
2.214
Offshore
ReinsurersReinsurers
Offshore
Local
1.788
Reinsurers
4.713 4.401
Local
Reinsurers
March 2016 Terra Report Terra Brasis Resseguros
13
Results of Local Reinsurers
In spite of an increase in the reinsurance volume and also a net profit in the period, the figures of the first
quarter of 2016 show a challenging business environment for the local reinsurers. It is noted a worsening
of the loss ratio, which was compensated for winnings with retrocession operations, resulting in a
Combined Ratio hovering above 100%.
In the 12 months aggregate ending in March, the Loss Ratio experienced by the local reinsurance market
reached 101%, a growth of 27 percentage points relative to the level of 74% registered in the same period
of 2014. It is worth emphasizing that this is the Gross Loss Ratio, calculated from the gross occurred losses
divided by the gross earned premium (i.e. gross of retrocession, net of commission.)
Loss Ratio: Occurred Losses/ Earned Premium Commercial Expenses/ Earned Premium
Source SUSEP, Terra Brasis Re, 12-month aggregate Source: SUSEP, Terra Brasis Re, 12-month aggregate
The Commercial Expense Ratio, in the 12 months aggregate ending in March 2016, remained stable,
closing the period in 2.2% compared to 2.1% registered in the same period of the previous year. In the
same period, the Administrative Expense Ratio (including taxes and other expenses) stood in
11.8% against 11.6% recorded in the same period of 2015, showing a slight deterioration.
Administrative Expense Ratio (including taxes and
other expenses)/ Earned Premium
Retrocession Result / Earned Premium
Source: SUSEP, Terra Brasis Re, 12-month aggregate Source: SUSEP, Terra Brasis Re, 12-month aggregate
The Retrocession Result Ratio, for the 12 months aggregate ending in March 2016, reached -14.2%
against 8.8% registered in the same period of 2015, demonstrating that the local reinsurers showed a
positive result in their retrocession operations, recovering more in losses that in what was paid in premium.
This result was in part influenced by the significant claims registered in the fourth quarter of 2015.
60%
70%
80%
90%
100%
110%
12/2011 12/2012 12/2013 12/2014 12/2015 12/2016
0%
5%
10%
15%
20%
25%
30%
35%
12/2011 12/2012 12/2013 12/2014 12/2015 12/2016
0%
5%
10%
15%
20%
25%
30%
35%
12/2011 12/2012 12/2013 12/2014 12/2015 12/2016 -15%
-10%
-5%
0%
5%
10%
15%
20%
12/2011 12/2012 12/2013 12/2014 12/2015 12/2016
March 2016 Terra Report Terra Brasis Resseguros
14
As a result, the 27% increase in the loss ratio was virtually offset by the fall of almost 23% in the
retrocession result index.
In the 12 months aggregate ending in March 2016, Combined Ratio (including retrocession result
index) reached 100.9% against 96.6% showed in the same period of 2015.
Combined Ratio, with Retrocession Result Ratio
Source: SUSEP, Terra Brasis Re, 12-month aggregate
Combined Ratio Local Reinsurance Market Combined Ratio IRB and Others Locals
Source: SUSEP, Terra Brasis Re Source: SUSEP, Terra Brasis Re
80%
90%
100%
110%
120%
12/2009 12/2010 12/2011 12/2012 12/2013 12/2014 12/2015 12/2016
March 2016 Terra Report Terra Brasis Resseguros
15
We showed below the summary of results for local reinsurance Market in the first three months of 2016
and 2015.
Summary of Results and Main Indexes for Local Reinsurers for January to March 2016 and 2015
Source: SUSEP, Terra Brasis Re, numbers in BRL Million
In the first quarter of 2016, the local reinsurers produced a net profit of BRL 262 million, in contrast to a
net profit of BRL 193 million registered in the same period of 2015. In this period, IRB profited BRL 212
million, while the other local reinsurance reported a positive result of BRL 50 million.
Net Profits January to March (BRL mm)
Total Local Reinsurers
Net Profits January to March (BRL mm)
IRB and Others Locals
Source: SUSEP, Terra Brasis Re Source: SUSEP, Terra Brasis Re
As mentioned in previous issues, the current group of Other Local Reinsurers is not homogeneous and,
therefore, their analysis becomes more complex. This way, we continue the analysis of reinsurers based on
their operation start, which we called “Class”.
March 2016 Terra Report Terra Brasis Resseguros
16
Comparing the 1Q2016 with the 1Q2015 it is possible to see an improvement in the loss ratio of the class of
2008 to class of 2012, while IRB and the class of 2014 showed a worsening in this index. Furthermore,
these last two showed, in the analyzed period, a higher recovering in losses than in what was paid in
premium on its retrocession operations, contributing to an improvement in the Combined Ratio liquid of
retrocession operations.
Summary of Results and Main Indexes for Local Reinsurers by Class
January to March 2016 and 2015
Source: SUSEP, Terra Brasis Re
In addition, IRB and the class of 2012 showed a strong result with investment operations, which contributed
for a net profit higher than shown in the same period 2015. The class of 2008 also presented a net profit
higher than the previous year. This result was influenced by a drop in the loss ratio and also by a decrease in
the reinsurance operations.
March 2016 Terra Report Terra Brasis Resseguros
17
Below we show Written Premium, net of commission, gross of retrocession, including Brazilian cedants and
offshore cedants, as well as the Market share of each local reinsurer, divided by "class". We indicated in red
a decrease in the volume of premium or market-share.
Main Index for Local Reinsurers classified by Class
Source: SUSEP, Terra Brasis Re. Figures in red represent an deterioration in relation to the previous period
In the production terms, the class of 2010 and the class of 2012 showed a downturn compared to the
same period of the previous year, while the other classes presented a growth. When it comes to the
market-share, IRB held the lead, growing from 47% to 58%, while the class of 2010 and also the class of
2012 lost market share, and the class of 2010 advanced.
March 2016 Terra Report Terra Brasis Resseguros
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The table below represents the summary of results of Local Reinsurers from January to March of 2016
and 2015.
Summary of Results – Local Reinsurers for January to March 2016 and 2015 (BRL mm)
Total Local Market, IRB and Other Locals
Source: SUSEP, Terra Brasis Re (1) R.O.E. Defined herein as annual net income divided by the shareholders equity of the end of the period.
March 2016 Terra Report Terra Brasis Resseguros
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Summary of Results – Local Reinsurers for January to March 2016 and 2015 (BRL mm)
JM, Munich, Mapfre and XL
Source: SUSEP, Terra Brasis Re (1) R.O.E. Defined herein as annual net income divided by the shareholders equity of the end of the period.
March 2016 Terra Report Terra Brasis Resseguros
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Summary of Results – Local Reinsurers for January to March 2016 and 2015 (BRL mm)
ACE, Austral, AIG and Zurich
Source: SUSEP, Terra Brasis Re, (1) R.O.E. Defined herein as annual net income divided by the shareholders equity of the end of the period.
March 2016 Terra Report Terra Brasis Resseguros
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Summary of Results – Local Reinsurers for January to March 2016 and 2015 (BRL mm)
Markel, Swiss, Terra Brasis and Allianz
Source: SUSEP, Terra Brasis Re, (1) R.O.E. Defined herein as annual net income divided by the shareholders equity of the end of the period.
March 2016 Terra Report Terra Brasis Resseguros
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Summary of Results – Local Reinsurers for January to March 2016 and 2015 (BRL mm)
BTG, Scor and AXA
Source: SUSEP, Terra Brasis Re, (2) R.O.E. Defined herein as annual net income divided by the shareholders equity of the end of the period.
March 2016 Terra Report Terra Brasis Resseguros
23
Results by Lines of Business
In this section we analyze the different lines of business in the Brazilian Market. In contrast with the
previous sessions of this report, which are based on data of the Income Statement (I/S) from insurance
and reinsurance companies, in this section we use the information of the Table of Operations (TO) from
SUSEP’s databank.
General Insurance and Reinsurance Premiums for January to March 2016 and 2015 (BRL mm)
Source: SUSEP, Terra Brasis Re, data obtained from the Table of Operations (TO)
After additional studies, we understand that there was a change in the definition of the data presented in
the Table of Operations. By mid-2012, the Table of Operations contained raw Reinsurance Commission
data. From this moment on, after a transitional period, the Operations Table seems to present data for
Reinsurance Premiums Liquid of Commission. The graph below illustrates that
Ceded Reinsurance from different data sources
Source: SUSEP, Terra Brasis Re, 12-month aggregate
March 2016 Terra Report Terra Brasis Resseguros
24
Group: Property
Insurance Premium Growth of Insurance Premium
Source: SUSEP, Terra Brasis Re, BRL billions, 12-month aggregate Source: SUSEP, Terra Brasis Re, 12-month aggregate
Reinsurance Premium Growth of Reinsurance Premium
Source: SUSEP, Terra Brasis Re, BRL billions, 12-month aggregate Source: SUSEP, Terra Brasis Re, 12-month aggregate
Reinsurance Premium / Insurance Premium Split of Reinsurance Premium by Type of Company
Source: SUSEP, Terra Brasis Re, 12-month aggregate Source: SUSEP, Terra Brasis Re, BRL billions 12-month aggregate
Loss Ratio: Insurers Loss Ratio: Local Reinsurers
Source: SUSEP, Terra Brasis Re, 12-month aggregate Source: SUSEP, Terra Brasis Re, 12-month aggregate
March 2016 Terra Report Terra Brasis Resseguros
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Group: Financial Risks
Insurance Premium Growth of Insurance Premium
Source: SUSEP, Terra Brasis Re, BRL billions, 12-month aggregate Source: SUSEP, Terra Brasis Re, 12-month aggregate
Reinsurance Premium Growth of Reinsurance Premium
Source: SUSEP, Terra Brasis Re, BRL billions, 12-month aggregate Source: SUSEP, Terra Brasis Re, 12-month aggregate
Reinsurance Premium / Insurance Premium Split of Reinsurance Premium by Type of Company
Source: SUSEP, Terra Brasis Re, 12-month aggregate Source: SUSEP, Terra Brasis Re, BRL billions, 12-month aggregate
Loss Ratio: Insurers Loss Ratio: Local Reinsurers
Source: SUSEP, Terra Brasis Re, 12-month aggregate Source: SUSEP, Terra Brasis Re, 12-month aggregate
March 2016 Terra Report Terra Brasis Resseguros
26
Group: Rural
Group: Rural Growth of Insurance Premium
Source: SUSEP, Terra Brasis Re, BRL billions, 12-month aggregate Source: SUSEP, Terra Brasis Re, 12-month aggregate
Reinsurance Premium Growth of Reinsurance Premium
Source: SUSEP, Terra Brasis Re, BRL billions, 12-month aggregate Source: SUSEP, Terra Brasis Re, 12-month aggregate
Reinsurance Premium / Insurance Premium Split of Reinsurance Premium by Type of Company
Source: SUSEP, Terra Brasis Re, 12-month aggregate Source: SUSEP, Terra Brasis Re, BRL billions, 12-month aggregate
Loss Ratio: Insurers Loss Ratio: Local Reinsurers
Source: SUSEP, Terra Brasis Re, 12-month aggregate Source: SUSEP, Terra Brasis Re, 12-month aggregate
March 2016 Terra Report Terra Brasis Resseguros
27
Group: Liability
Insurance Premium Growth of Insurance Premium
Source: SUSEP, Terra Brasis Re, BRL billions, 12-month aggregate Source: SUSEP, Terra Brasis Re, 12-month aggregate
Reinsurance Premium Growth of Reinsurance Premium
Source: SUSEP, Terra Brasis Re, BRL billions, 12-month aggregate Source: SUSEP, Terra Brasis Re, 12-month aggregate
Reinsurance Premium / Insurance Premium Split of Reinsurance Premium by Type of Company
Source: SUSEP, Terra Brasis Re, 12-month aggregate Source: SUSEP, Terra Brasis Re, BRL billions, 12-month aggregate
Loss Ratio: Insurers Loss Ratio: Local Reinsurers
Fonte: SUSEP, Terra Brasis Re, acumulado 12 meses Fonte: SUSEP, Terra Brasis Re, acumulado 12 meses
March 2016 Terra Report Terra Brasis Resseguros
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Group: Marine
Insurance Premium Growth of Insurance Premium
Source: SUSEP, Terra Brasis Re, BRL billions, 12-month aggregate Source: SUSEP, Terra Brasis Re, 12-month aggregate
Reinsurance Premium Growth of Reinsurance Premium
Source: SUSEP, Terra Brasis Re, BRL billions, 12-month aggregate Source: SUSEP, Terra Brasis Re, 12-month aggregate
Reinsurance Premium / Insurance Premium Split of Reinsurance Premium by Type of Company
Source: SUSEP, Terra Brasis Re, 12-month aggregate Source: SUSEP, Terra Brasis Re, BRL billions, 12-month aggregate
Loss Ratio: Insurers Loss Ratio: Local Reinsurers
Source: SUSEP, Terra Brasis Re, 12-month aggregate Source: SUSEP, Terra Brasis Re, 12-month aggregate
March 2016 Terra Report Terra Brasis Resseguros
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Exhibit 1: Brazilian Insurance Segments per Susep’s Classes
In the table below are definitions by Terra Brasis of the segments referring to different lines of business supervised by SUSEP. The lines in grey denote lines of business that are deactivated or in rundown. In this report, for the definition of General Insurance, the classes related to DPVAT were excluded, since we believe that such classes should be an independent category. Other classes related to VGBL, which Terra Brasis believes should be presented together with other Retirement Plan modalities, were also excluded.
Segmentation of the Brazilian Insurance Market Under SUSEP Supervision
Source: SUSEP, Terra Brasis Re
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Exhibit 2: List of Technical Terms
Here follows an initial dictionary with the definitions that we used in this report for certain reinsurance
terms. We intend to add to the list as the work progresses and believe that this would be worthwhile
since several reinsurance terms have been used with different meanings.
Brazilian General Insurance Market: It is the market comprising insurance operations in accordance
with official regulation by SUSEP, except for those classified in the DPVAT and VGBL modality.
Brazilian Reinsurance Market: It is formed by operations comprising cessions of reinsurance ceded by
Brazilian insurers and assumed by reinsurers that are authorized to operate in Brazil and classified as
local, admitted, or occasional.
Local Reinsurance Market: It is formed by operations comprising reinsurance business assumed by
local reinsurers.
Written Premium or Gross Written Premium: It is the value of the premium written by Insurers or
Reinsurers, before reinsurance or retrocession deductions. In the case of reinsurers, as of May 2011, it is
net of commissions paid to Cedants.
Commission: It is the value that the reinsurer or retrocessionaire pays to the cedant, with the objective
of covering part of the expenses incurred in the administration and production of the business.
Brokerage: It is the value paid to the broker (“broker”) in compensation for the intermediation of the
insurance, reinsurance, or retrocession.
Overriding: It is the part of the commission paid to cedants in addition to their incurred commercial
expenses.
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Exhibit 3: Main Indexes of Local Reinsurers
Main
Ratios
Fro
m L
oca
l Rein
sure
rs f
rom
January
to M
arc
h o
f 2
016 a
nd 2
015
Fonte
: SU
SEP, Terr
a B
rasi
s R
e
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Acknowledgements
It is with enthusiasm that we continue to publish our market report, Terra Report, a research piece covering the Brazilian Reinsurance Market, which we share with our clients, partners, and colleagues.
We are immensely grateful to SUSEP for making its databank available to the public. We also thank ANS and CNSeg for information used herein. The report also contains analyses and adjustments made internally by Terra Brasis and, in this way, we apologize in advance for possible inaccuracies contained in this publication.
We hope our readers appreciate this work as much as we appreciate developing it. Without a doubt, it is extremely gratifying to be involved in the Brazilian reinsurance market at such an important moment of its development. Any criticism, comment, or suggestion for this work is very welcome.
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Contacts
Name Title Telephone Email
Paulo Eduardo de Freitas Botti Chief Executive Officer +55 11 3320 5056 [email protected]
Carlos Roberto De Zoppa Technical Executive Vice President +55 11 3320 5058 [email protected]
Bernardo Nolasco Chief Investment Officer +55 11 3320 5165 [email protected]
Rodrigo Botti, ARe General Manager, CFO & COO +55 11 3320 5050 [email protected]
Paulo Hayakawa Chief Underwriting Officer +55 11 3320 5053 [email protected]
Beatriz Americano Chief Administrative Officer +55 11 3320 5051 [email protected]
Priscila Grossi Risk Analyst +55 11 3320 5080 [email protected]
Mathias Gerhard Intern +55 11 3320 5080 [email protected]
This document was prepared by Terra Brasis Re S.A. ("Terra Brasis Re") for informational purposes only.
Terra Brasis Re, its partners, companies under common control, its directors, employees and agents do not express any opinion, do not guarantee, nor assume any responsibility for the adequacy, consistency, or completeness of any information contained herein or any omission regarding this report. This publication is also not designed to be a complete statement or summary of markets or strategies discussed in this document. None of the people mentioned in this paragraph shall be liable for any loss or damage of any kind arising from the use of the information contained herein, or which may be obtained by third parties by any other means. Terra Brasis Re should not be construed as providing financial, tax, or legal advice.
The information contained herein was obtained from public sources, and Terra Brasis Re has not conducted an independent verification of this information. Any projections or forecasts contained in this report are based on subjective estimates and assumptions about events and circumstances that have not yet occurred and are subject to significant variations. Thus, it is not possible to ensure that results from any projections or forecasts
contained in this document will be effectively verified.
This publication is only valid on the date hereof, and future events could undermine its conclusions. Terra Brasis Re assumes no responsibility to update, revise, amend or cancel this publication due to any future event, unless previously requested.
It is not the obligation of Terra Brasis Re to implement the procedures in this document, nor is Terra Brasis Re responsible for any inaccuracies in any negotiations or transactions relating to this report. No investment or financial decision should be based solely on the information presented here.
All information contained in this report should be kept strictly confidential and can only be released, quoted, or reproduced in whole or in part, with the prior written consent of Terra Brasis Re for people who have agreed to treat such information as confidential
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