Allianz Global Corporate & Specialty, the unit of Munich- based Allianz that underwrites marine, aviation and corporate risks, opened offices in Rio de Janeiro and Sao Paulo in connection with getting the license, according to a statement today from the German company.
Reinsurers such as Swiss Re Ltd. and Munich Re have expanded in Brazil since the country ended a 69-year government monopoly on the market in 2008. Spending on infrastructure, a commodities boom and the expansion of oil and gas exploration has helped drive demand for reinsurance, which primary carriers buy to protect themselves against the costliest risks.
Those investments “will create many opportunities,” Drault Ernanny, a senior vice president at AGCS in Rio de Janeiro responsible for business development in the country, said in a phone interview. “We see Brazil as a hub for South America.”
Allianz is looking at countries including Peru and Colombia to boost premiums on the continent, he said. AGCS has set a goal of reaching more than 350 million euros ($468 million) in policy sales in South America by 2015, with Brazil representing about half of that, according to the statement.
Brazil’s economy may be bolstered in coming years by production from the country’s so-called pre-salt oilfields. The country has been upgrading airports while building stadiums and other projects ahead of hosting the 2014 World Cup soccer tournament and 2016 Summer Olympics.
President Dilma Rousseff called on businesses last month to increase investments as the country’s economy slows amid the European debt crisis and lower Chinese demand for commodities. The central bank estimates growth was 1 percent last year, which would be down from 2.7 percent in 2011 and 7.5 percent the prior year.
Allianz was a so-called admitted reinsurer in Brazil prior to winning the license. That meant the company held capital outside the country and had to cede some of its business to local firms, Ernanny said.