How would Brazil auto insurance industry fare in 2009?
In 2009 Brazil auto insurance industry is likely to face a lot of pressure and there are several reasons behind it. In 2009 sales of new cars are supposed to go down and prices of used cars would reduce too. In addition to these, there would be increased competition in Brazil automobile insurance industry.
Investment portfolios of a number of companies in automobile insurance industry of Brazil would be a major factor in determining how it fares in 2009. A couple upcoming niche services such as loaner cars and discounts for car parking are likely to hamper auto insurance industry of Brazil as they would add to competition.
However, it is expected that in coming decade Brazil auto insurance market would be doing good business. In coming 15 years number of cars in roads of Brazil would go up to 50 million. It is estimated that during this period Brazil auto insurance companies would be selling more casualty auto insurance policies than they have been doing before 2008. At present number of such policies being sold is equivalent to 20 percent of cars being driven in Brazil.
Brazil auto insurance industry had been doing well for a number of years as consumers have been able to get access to credit, which is necessary for buying cars. This encouraged them to avail Brazil auto insurance as well. However, conditions are different now. In Brazil auto insurance industry is operated by brokers who operate on an independent basis.
These brokers have been operating for a long period of time and are presently a well established network. Financial experts Moody's presumes that Brazil auto insurance industry would not be affected as such as they are capable of adjusting to various risks that may arise from unsatisfactory performance.
Brazil auto insurance industry is highly competitive as far as expenses are concerned. With exception of DPVAT, Brazil auto insurance is not compulsory. DPVAT is a sort of mandatory third party liability insurance policy. A maximum of 25 percent car owners in Brazil avail auto insurance on a voluntary basis. Brazil auto industry has a well developed claims services, which also deals in roadside assistance, recovery and salvage services.