## Brazil: Financial Sector Assessment Program-Technical Note on Insurance Sector Regulation and Supervision

_IMF Staff Country Reports, November 30, 2018_

## Source details

**Canonical URL:** [Brazil: Financial Sector Assessment Program-Technical Note on Insurance Sector Regulation and Supervision](https://www.imf.org/en/publications/cr/issues/2018/11/30/brazil-financial-sector-assessment-program-technical-note-on-insurance-sector-regulation-and-46415)

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## Bibliographic details
- Published: November 30, 2018
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781484387559.002

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### Overview and Key Findings
- The insurance sector has significant potential for expansion and to contribute to economic growth as an important part of the financial sector.
- The insurance sector has grown at 10 percent annually over the last 5 years, on average.
- The sector remains profitable with high solvency ratios.
- Insurance penetration and density are lower than other emerging markets, though the industry has the potential to reach much higher levels of insurance penetration.
- A few large conglomerate groups—composed of banks, insurers and investments funds—dominate the insurance sector.

### Market Structure and Concentration
- Conglomerate groups account for more than 75 percent of the market share.
- The market is concentrated in a small number of large groups combining banking, insurance, and investment activities.

### Regulation, Supervision, and Interlinkages
- Regulations imposed by the Banco Central do Brasil (BCB) and the Superintendency of Private Insurance (SUSEP) are described as very conservative.
- Reflecting these conservative regulations, interlinkages between banks and insurers are limited.
- Despite limited interlinkages, material contagion may occur through a reputational channel, adversely impacting the profitability of the linked business.

### Sector Challenges and Potential
- Low insurance penetration and density relative to other emerging markets represent a growth opportunity for the industry.
- Dominance by a few conglomerates suggests potential concentration risks and the importance of robust group-level supervision.
- Conservative regulatory stance reduces direct financial linkages but does not eliminate indirect channels of contagion (reputational risk).

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- **Country Report**
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_Source: https://www.imf.org/en/publications/cr/issues/2018/11/30/brazil-financial-sector-assessment-program-technical-note-on-insurance-sector-regulation-and-46415_