Escolar Documentos
Profissional Documentos
Cultura Documentos
SEPTEMBER 2010
Table of Contents
Payroll lending: a new loan market where lenders collect repayments directly from the payrolls of borrowers
Major player includes Banco do Brasil, Brazils largest public sector bank
NUMBER OF BANKS
No. of Ba nks
200
Foreign Ba nks 19% Public Sector Ba nks 40%
165
164
161
159
156
159
150 2000 2001 2002 2003 2004 2005 2006 2007 2008
Private
$343.83
3,732
Public
249.30
4,973
Private
246.93
22,177
Private
146.19
2,283
Public
134.97
2,069
Persona Credit l 3 4%
Goods Purcha se a Lea nd sing 18% Discount of tra de bills & promissory 4% Gua nteed ra Account 12%
Vendor 2%
Working Ca l pita 4 9%
The Basel Ratio in Brazil is 17.5%, above the 8% recommended by the Basel Accord and the 11% minimum defined in Brazilian legislation In 2008, number of Checking Accounts and Saving Accounts includes 1,257 mn and 92 mn As of Nov 2008, three banks held 51% of the market and the top 5 banks held 74% of total assets
s
s s
The participation of the top 5 banks in total assets grew from 58.6% in June 2008 to 74.6% in Dec 2008, mainly due to the incorporation of ABN by Santander and the merger of Ita with Unibanco
s s
The Central Bank registers all credit operations above BRL 5000 As of Oct 2008, Brazilian bank financial strength rating was C
BANKING SEGMENT BY CAPITAL ORIGIN (2008)
Public 8 % Domestic with foreign ownership 35% Domestic with foreign pa rticipa tion 4% Foreign - Bra nches 4%
Domestic 49%
II
II
Sub segments, Property & Casualty and Accident & Health generated a premium incomes of $17.7 bn & $7.2 bn
Sub segments, Pension/Annuity and Life Insurance generated a premium incomes of $12.8 bn & $3.9 bn
Brazil accounts for 2.9% of the Americas insurance market's gross premium income
s
The US leads the Americas insurance market with 87.1% of the regional market gross premium income
II
Mexico 1%
U.S. 8 7%
II
I C
I V
S S E
( I N
S $
$ 9 9 . 5 4
$ 3 4 3 . 8 3
$ 2 4 6 . 9 3
1 , 2 4 5
3 , 7 3 2
2 2 , 1 7 7
II
Brazil represents the largest insurance market in Latin America, representing ~40% of the gross premiums in the region Compound annual growth rate for the market was 14.4% for the period 2004 - 08 Expects a CAGR of 9.1% for the five-year period 2008 - 13, which will drive the market to a value of $64.2 bn by the end of 2013 In comparison, the US and Canadian markets grew with CAGRs of 2.9% and 4.9% respectively, over the same period to reach respective values of $1243.9 bn and $103.2 bn in 2008 Insurance companies are setting up automatic treaties & struggling to adapt to the new market situation Underwriting knowledge is being developed The number of registered companies with SUSEP continues to grow
s s
s s
II
20% 15
II
(contd)
The Brazilian Non Life Insurance market grew by 15.2% in 2008 to generate a gross premium income of $24.9 bn
s s
Compound annual growth rate for the market was 12.3% for the period 2004 - 08 Expects a CAGR of 9% for the five-year period 2008 - 13, which will drive the market to a value of $38.3 bn by the end of 2013 In comparison, the US and Canadian markets grew with CAGRs of 2.3% and 2.6% respectively, over the same period, to reach respective values of $665.7 bn and $55.3 bn in 2008
The Brazilian Life Insurance market grew by 15.4% in 2008 to generate a gross premium income of $16.7 bn
s
s s
Compound annual growth rate for the market was 18% for the period 2004 - 08 Expects a CAGR of 9.3% for the five-year period 2008 - 13, which will drive the market to a value of $26 bn by the end of 2013 In comparison, the US and Canadian markets grew with CAGRs of 3.6% and 7.8% respectively, over the same period to reach respective values of $578.2 bn and $47.9 bn in 2008
10
II
30% 25 20 15 10 5 0
$ 20 15 10 5 0 2004 2005
8.0 CAGR 1
30% 25 20 15 10 5 0
2006
2007
2008
11
II
In general & life insurance and retirement savings, supported by a large economy and population base
s
Alleviated by recent improvements in the government's debt structure, Moody's foreign currency ceiling at Ba1 & local currency ceiling at A1
Primarily through bank branches and affiliates for life insurance and pension products
s
Should improve operational efficiency including underwriting, claim & policy processing, risk management and product distribution
Limits insurance and savings product utilization, especially among the less affluent population
Together with an increased public awareness of insurance and retirement savings products
Has implemented important new financial disclosure, accounting, governance and internal control standards
s
Market inefficiencies caused by lack of pricing differentiation and open competition in reinsurance
s
Potential margin compression as a result of falling interest rates and tighter credit
12
II
spreads
s
For insurers that are dependent on investment returns to offset underwriting losses
13