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José Manuel FonsecaCEO do Grupo MDS e Chairman da Brokerslink

Strategic Vision in the Insurance Industry in Brazil and Portugal

Our planet is living through accelerated changes. The global race for ever greater quantities of natural resources, climate change, geopolitical tension ratcheting up due to the war between Russia and Ukraine, the digital transformation of societies, challenges in healthcare and emergent risks that we all face are but a few of the leading topics shaping the day-to-day lives of people, companies and governments the world over. 

That was the juncture we discussed objectively in Portugal at the 2022 Brokerslink Conference, an event with global reach promoted by Brokerslink. Founded by the MDS Group, this world-spanning network gathers independent brokers and specialist risk consultants from 126+ countries. The Conference welcomed over 360 attendees from 71 nations and surfaced a very clear objective: break down barriers to relationship-building and exchange thoughts and visions about business particulars connected with the insurance, reinsurance and risk management markets in each country at this delicate time, taking stock of their needs and breakthroughs.  

When we assess how companies have grown, technology investments and even success stories with a focus on the financial health of corporations, we realize our sector in Portugal and Brazil displays several noteworthy cultural differences. To reach our conclusions, we drew on our everyday experience with risk management programmes in companies across all sectors. 

In Brazil, distribution channels that lead the market are related with consultancy services delivered by qualified specialists — namely insurance brokers, major protagonists of product distribution in the Brazilian market. In Portugal we have insurance agents in addition to brokers. Agents are considered intermediaries who work with insurers to present solutions to, and attract new customers.  

When we evaluate insurance culture in Brazil, we find that there is a long road ahead, and room for growth. The sector’s weight in Brazilian GDP, in 2021, which has ascended to R$ 8.7 trillion, comes to 6.7% (almost R$ 583 billion) per reports from Fundação Getúlio Vargas (FGV) through the Instituto de Inovação em Seguros e Resseguros (IISR) [Institute for Innovation in Insurance and Reinsurance]. Meanwhile, in Portugal, according to the Associação Portuguesa de Seguradores (APS) [Portuguese Association of Insurers] the business reached 13.1 billion euros in premiums issued under life and capital insurance in 2021. So last year the insurance market in Portugal represented 5% of the country’s GDP. 

An important trend found in both countries is the investment on facilitating tools. We are confident that insurance distribution and the management of customer service on digital channels bring essential advantages to insurers, immediate returns to customers and sector professionals as well as increased productivity for businesses. However, online models that replace face-to-face interaction with eye-on-screen time don't always deliver the same personal qualities or even the sensitivity and tact that clients need when they calculate their risk and select an insurance solution. Factors such as those, added to the highly advanced technical skills in this professional class, explain why robust physical sales and brokers and agents are still responsible for the bulk of product and service distribution in insurers across the planet.  

These days, however, it is no longer possible, nor should one recommend that companies limit themselves to one business format in the universe of risk placement and insurance mediation. Social evolution and changing trends and consumption habits point to a convergence where consumers will demand solutions that will balance the immediacy of digital channels with the technical experience of professionals in this segment. To that end, brokers and sector partners need to pay attention to technologies indispensable to risk management and business forecasts and may assist in formulating global management plans. Likewise, they need to enhance professionals’ technical outlook so as to equip them to understand existing gaps in geopolitics, economies and natural disaster prediction methods, which will enable them to offer precise solutions and coverage to each country and society.  

In short, despite the notable cultural differences between Portugal and Brazil, it is valid to claim that these two countries, in Europe and South America, respectively, show a strong growth outlook in coming years, attracting more and more foreign investment. For brokers to succeed in those two countries (or anywhere else), one must maintain healthy equilibrium between digital and interpersonal interaction, adaptability, and advance opportunities for tailoring solutions on offer.

By José Manuel Fonseca, MDS Group CEO, Brokerslink Chairman  
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