Brazilian insurer SulAmérica is likely to see slightly more impact from devastating rains in the state of Rio de Janeiro than rival Porto Seguro, according to analyst Iago Whately of Banco Fator.

“Porto Seguro is very concentrated in São Paulo and suffered a lot in 1Q10 [from rains in that region],” Whately said. “SulAmérica also has concentration in São Paulo, but its share in Rio de Janeiro is quite large and its loss ratio should take a hit with this flooding.”

The rain in Rio de Janeiro started Monday (Apr 5) afternoon and estimates have put the death toll so far at more than 100, and untold damage will be calculated in coming weeks and months. Auto and residential coverage should present the largest losses, the Banco Fator analyst said.

Analyst Filipe Corga Acioli Lopes of brokerage Ágora, which is owned by Bradesco (NYSE: BBD), told BNamericas he expects an increase in loss ratios at several companies, but that the impacts on quarterly results should not be huge.

DATA BREAKDOWN OF RIO DE JANEIRO EXPOSURE

Of the 19.1bn reais (US$10.9bn) in auto-related premiums written in the 12 months to end-January 2010, 45% were in São Paulo state, while the second largest state for premiums was Rio de Janeiro with 11%, according to data from regulator Susep.

SulAmérica writes about 23% of its auto business in Rio de Janeiro and 35% in São Paulo. Porto Seguro has 10% and 71%, respectively. Through its transaction with Itaú Unibanco (NYSE: ITUB) last year, Porto Seguro now controls the bank’s auto portfolio, which has 9% and 53%, respectively, in each state.

Other major players in the auto segment are Bradesco with 9% in Rio de Janeiro and 38% in São Paulo, and Mapfre with 5% and 55%, respectively. HDI has 3% and 21%.

Similar Posts:

Share