The insurance market’s loss ratio increased by 13.2 percentage points (p.p.) in May, compared to the same period last year. This is shown in the 43rd edition of the IRB+Mercado Report , as released today (August 7th) by the IRB+Inteligência platform. After the tragedy caused by the rains in Rio Grande do Sul, the rate went from 42.2% to 55.4% The impact observed in May, however, has not yet been able to cause an increase in the overall accumulated loss ratio for the year, which decreased by 2.4 p.p. in 5M24, compared to 5M23, and closed at 42.8%.
The change in May was mainly due to the rise in claims in the Corporate Damage and Liability (+37.6 p.p.), Automobile (+11.6 p.p.) and Rural (+46.7 p.p.) segments, influenced by the Rio Grande do Sul effect and droughts in some regions of the country. The year-to-date reduction was mainly driven by Credit and Collateral (-59.1 p.p.).
Insurance companies’ turnover in May reached R$16.9 billion, a positive variation of 7.3%. In the year, premiums issued totaled R$81.5 billion, an increase of 11.1%. Insurers’ net profits, in turn, decreased by 27.3% in May compared to the same period last year, totaling R$2.4 billion. From January to May 2024, the drop in net profit, which reached R$13.9 billion, is 2.4%.
When looking at the contracting of reinsurance by insurance companies, there has been a growth. In May, there was a 3.8% increase in the transfer of premiums, totaling R$2.4 billion. In 2024, the increase is 5.7%, with a total amount of R$10.5 billion. The analysis in IRB+Mercado Report takes into account the database updated by Susep, the industry regulator, on July 15th.
Credit and Collateral registers the highest increase in May
The Life insurance segment, which accounts for 35.6% of the market, issued premiums of R$5.9 billion in May, an increase of 12.9% compared to the same month in 2023. The loss ratio dropped by 2.6 p.p.
The Automobile sales segment amounted to R$ 4.8 billion in the fifth month of the year, a slight drop of 0.7%. The loss ratio for the period was 71.6%, an increase of 11.6 p.p., representing the highest monthly rate for the modality since June 2022. Due to the impact of the tragedy caused by the rains in Rio Grande do Sul, with vehicles submerged, claims in the state reached 24.6% in May, up 18.3 p.p. Previously, they were 6.34%.
Damages and Liabilities issued R$3.2 billion in premiums in May, up 8% on the same month last year. The Engineering business line stood out, with a positive variation of 47%. The loss ratio was 68.7% (+37.5 p.p.), the highest since February 2023. This increase was also impacted by the floods in Rio Grande do Sul, which affected the claims rate for the Property and Housing lines. The number of claims in the state of Rio Grande do Sul accounted for 24.2% of the country’s total.
Individuals against Damage ended May with R$1.4 billion in sales, an increase of 19%. The biggest variation was in the Extended Warranty product (29.9%). The loss ratio reached 43% (+14.9 p.p.). The number of claims in Rio Grande do Sul this month also impacted the segment by 31.8%, an increase of 21.6 p.p.
The Rural segment earned R$1 billion in May, a decrease of 10.4% compared to May 2023. The loss ratio increased 46.7 p.p. (71%). The variation is mainly due to the period of drought, which impacted the North, Midwest and Southeast regions of Brazil.
Finally, Credit and Collateral issued premiums of R$724 million (+30.1%) in the fifth month of the year, mainly due to the variation in the Insured Collateral – Private Sector product. The loss ratio stood at 31.5%, down 59.1 p.p.
The IRB+Mercado Report, available in full here on the IRB(Re) website, summarizes insurance operations. The IRB+Mercado Segurador Dashboard, which allows dynamic and free consultation of information from the entire sector, is also online.
