INTERVIEW: ALESSANDRA MONTEIRO, AUSTRAL RE
Major growth opportunities in LatAm life insurance market
Austral Re is set to use its home market expertise to harness growth potential and aggregate business across LatAm, Alessandra Monteiro tells Intelligent Insurer.
The life insurance market in Brazil, and across Latin America, is taking off, presenting a growth opportunity that Brazil-headquartered Austral Re is ideally placed to embrace.
Growth in Brazil’s life market is a relatively new phenomenon, according to Alessandra Monteiro, life underwriting director at Austral Re, who has been monitoring the developments on her home turf.
Historically Brazil didn’t have a strong tradition of buying life policies, she said, but the COVID-19 pandemic has changed that. She explained that people felt their mortality much more keenly as the pandemic claimed lives throughout 2020 and 2021. One consequence of this was that more people wanted to ensure their families were protected if the worst happened, she said, which has led to more people buying life cover.
“People are more conscious about the importance of having a life insurance policy, so all the insurance companies here in Brazil are increasing sales. This is probably the only good consequence of the pandemic.”
Life growth to outstrip other classes
Before the pandemic, the Brazil market was focused on group life cover rather than individual cover which is more commonly seen in North American and European markets.
Monteiro said that as a result of greater customer awareness of the value of life policies, Austral Re is now experimenting with growing its individual life policy business.
“People are more conscious about the importance of having a life insurance policy.”
Alessandra Monteiro, Austral Re
“Here in Austral Re, we decided to invest more in underwriting tools to give a better sales experience for Brazilian clients and we think that in the next two or three years the Brazilian life insurance market will increase a lot more than other lines of business.”
Reinsurance in Brazil, including life, has witnessed a “very hard” market over the last two years as a result of COVID-19, and this hard market remains despite the worst of the pandemic appearing to be over.
Monteiro said that many insurance companies have less appetite for the life class of business as they try to recover some pandemic losses.
“For Austral Re, this is a very good moment to invest in life insurance—the prices are good right now because the market is hard. We can offer more capacity while many players are deciding not to offer as much capacity as in the past.
“So for us, next year will be a very good time to increase our life portfolio,” she explained.
Regional reach
Austral Re, founded in 2011 by Vinci Partners, expanded its business across Latin America in 2015 and now operates across 18 countries. It became the second largest local reinsurer in Brazil in 2019 when it merged with Terra Brasis. In 2021, the reinsurer acquired the run-off reinsurance operations of Markel Reinsurance Brazil, and its parent company Markel Brazil.
With a growth opportunity on its doorstep, Austral Re has decided to invest in new underwriting tools for its clients to offer better risk analysis; in turn the reinsurer’s clients can offer their own clients a better, and paperless, sales experience.
“With these underwriting tools and services we can increase our life portfolio.”
These tools are designed to make the process faster without having to forfeit good risk analysis, Monteiro said. “We have many underwriting tools to offer to our clients, such as predictive models, tele-underwriting and automatic underwriting. We also have tools that mean our insurance companies can offer their clients digital sales, something that is increasing too, probably because of the pandemic.”
It’s not just new tech that the reinsurer is offering clients: Austral Re has invested in product development, new products, new guarantees and new covers around critical illness. “With these underwriting tools and services we can increase our life portfolio,” Monteiro added.
She thinks that the LatAm region is where the best opportunities are right now.
“We are completely focused on this region. There is less penetration in this market, so it’s different from North America and Europe where most people have a life insurance policy. In Latin America we don’t have this situation, so we decided to focus on the region and with these new underwriting tools and services, we aim to develop long-term partnerships with our clients.
“We have important knowledge about the Brazilian market, and the neighbouring countries are very similar to Brazil, so we can aggregate more in Latin America countries. We don’t have plans to expand our operation for other continents at the moment but maybe in the future, who knows.
“First we would like to dominate Latin America, after that we can think about other countries.”
Alessandra Monteiro is life underwriting director at Austral Re. She can be contacted at: amonteiro@australre.com
Image from Shutterstock / Gustavo Frazao
