Loss ratio closed the first half at 43.6%, 0.7 percentage points (p.p.) down on 1H23, even with the impact of the events occurred in Rio Grande do Sul
During the first half of 2024, Brazilian insurers recorded a revenue of R$ 99.2 billion, an increase of 9.9% over the same period last year. There has been a rise in all segments. Based on the 44th edition of the IRB+Mercado Report, released today (September 4th) by the IRB+Inteligência platform, the Life segment accounted for 60% of the growth, adding up to R$ 5.2 billion more in premiums issued, when compared to the first six months of 2023. In June, the last month recorded by the segment, revenues amounted to R$ 17.7 billion, an increase of 4.6% over the previous year.
The loss ratio, an indicator that assesses the operational performance of insurers, ended 1H24 at 43.6%, 0.7 percentage points (p.p.) behind 1H23, even with the impact of the events in Rio Grande do Sul. In June, the ratio totaled 47.6%, an increase of 7.4 percentage points (p.p.) when analyzing the same month in 2023, mainly due to the increase in claims in the segments Property (+68.7 p.p.), Home (+16.2 p.p.) and Rural (+13.9 p.p.). However, the increase on claims in June was lower than in May (55.4%), indicating that the main impacts of the events in Rio Grande do Sul have already been fully absorbed by the Brazilian insurance market.
As a hedging tool for their operations, Brazil’s insurers assigned R$ 13.4 billion to reinsurance coverage in the first six months of 2024, an increase of 3.3% compared to 1H23, mainly due to Property and Oil insurance products. Insurers’ net profit was R$17.4 billion, which was steady when compared to 1H23.
The Life segment accounts for 35.2% of the market
Holding a 35.2% share of Brazil’s insurance market (+2.3 p.p.) and achieving a two-figure growth in every month of 2024, the Life segment generated revenues of R$ 5.9 billion in June. During 1H24, the increase was 17.5%, mainly due to the Life, Loan and Personal Accidents insurance segments, which account for almost 90% of this category. The loss ratio, during 1H24, had a slight decrease of 0.8 p.p., reaching 29%.
The development of Life insurance segment is also due to the improved performance of the Brazilian labor market. In the first half of the year, according to the Caged (General Register of Employed and Unemployed Persons), 1.3 million formal jobs were created, totaling 46.8 million formal jobs, 3.8% higher than in the first six months of 2023.
The Automobile segment issued R$4.6 billion in premiums along the sixth month of the year. In the first half of the year, there was a positive variation of 0.9%. Despite the segment having experienced the impacts of the natural disaster in the State of Rio Grande do Sul, in 1H24 the loss ratio was of 59.9%, representing a year-on-year increase of merely 0.2 p.p.
The Damages and Liabilities segment ended June with a total of R$ 4.2 billion in premiums and a year-to-date increase of 11% when compared to 1H23, with the Appointed and Operational Risks (12.7%) and Oil (30.7%) hedges standing out. The loss ratio in 1H24 reached 47.2% (+6.4 p.p.) due to the floods in Rio Grande do Sul which, in this segment, mainly affected the Appointed and Operational Risks, in addition to the House segment.
In June, the Individual Against Damage segment recorded revenues of R$ 1.4 billion and an increase of 17.8% in the six-month period in comparison with the previous year, making it the segment with the greatest variation over the semester. The Comprehensive Home insurance, which accounted for almost 50% of the R$1.2 billion increase in sales, was the main contributor to this increase. The 1H24 loss ratio was of 35.3%, representing an increase of 0.9 p.p., as a result of the natural disasters in Rio Grande do Sul.
The Rural segment had a turnover of R$1 billion in June and ended the first half of the year with a 0.4% increase, despite the growth and retractions experienced during the first six months of 2024. The segment had a loss ratio of 30.7% in June (+13.9 p.p.) and 42.9% in the first half (+2.3 p.p.).
Finally, the Credit and Collateral segment issued R$ 547 million in premiums in the sixth month of the year. Despite the positive and negative fluctuations faced in the first half of the year, the segment increased 10%, compared to the same period in 2023, mainly due to the variation in the Insured Collateral – Public Sector (+12.6%) and Insured Collateral – Private Sector (+70%) products. In 1H24, the loss ratio reduced by 57.8 p.p. compared to 1H23 and reached 23%.
English version
The IRB+Mercado Report, available in full here on the IRB(Re) website, outlines insurance operations, with a focus on damage, liability and personal insurance, based on the database published by Susep, the Brazilian insurance market regulator, on August 26th. From now on, in a unique initiative never seen before in the market, all the biannual editions feature an English version. The IRB+Mercado Segurador Dashboard, a platform developed by IRB(Re) which enables dynamic queries, has also been updated and now features a monthly version in English.
