HDI-Gerling Industrie Versicherung opens unit in Brazil

The Brazilian subsidiary of HDI-Gerling Industrie Versicherung AG started operations in August with a focus on providing solutions for multinational companies who have to deal with Brazil's complex regulations. But it also aims to build a client base among a growing group of Brazilian companies that are expanding their business abroad but have little experience of setting up global insurance programmes. "Our first goal is to carry on providing services to our global clients. But we aim to acquire Brazilian clients as well," said Guillermo León, CEO of HDI-Gerling Seguros Industriais. The creation of the São Paulo-based corporate insurance subsidiary follows decades of experience accumulated by HDI in Brazil. For a long time the company has operated a retail insurance business there, with a particular emphasis on the motor market. Participation in corporate insurance was restricted to small shares of syndicated coverages led by other insurers.hideOver the last three years HDI Seguros has established a global programmes department specifically for international clients that has taken an increasingly active role in the market. "The growth of the Brazilian economy in the past three years, coupled with the global programme activities of HDI Seguros in the country, created the conditions for HDI-Gerling to set up its own operation in Brazil," Mr León said. The Brazilian unit will share back office activities with the retail side of the business. It will target mid-sized and large companies in markets located in industrial regions such as the states of São Paulo, Minas Gerais, Paraná, Santa Catarina and Rio Grande do Sul. At first HDI-Gerling Seguros Industriais is offering coverages in the most sought after lines of business such as property damage, engineering, transportation and liability. It will expand to offer new classes of insurance over time. Brazil is famously a tough market for companies to integrate into their global insurance programmes. Restrictive admitted regulations and a hard line approach to the approval of new coverages often create challenges that require the active advice of insurers and brokers. Boosting HDI's ability to help clients deal with such issues is key, Mr León said. "It is hard to explain to an international client how the rules work, as there are restrictions in Brazil that companies do not find in other markets," he pointed out. "But in the end it is always possible to make things work. After the first policy is arranged, everything gets easier." A different challenge facing the insurer is providing international coverages for Brazilian companies. "The same way that we work with European and American companies that have a presence around the world, we aim to provide global programme services to Brazilian multinationals," Mr León remarked. He added: "Brazilian groups still do not have the habit of centralising their insurance decisions here in Brazil. They tend to allow foreign units to make their own insurance arrangements. Only a few companies already manage global insurance programmes from their headquarters. But little by little this idea is taking shape among companies. We want to use our international experience to help them to understand the advantages and challenges involved." The lacklustre performance of the Brazilian economy over the past two years has not prevented HDI-Gerling, as well as other corporate insurers, from continuing to invest in the South American powerhouse. "Corporate insurers in general, and ourselves in particular, work with long-term strategies, especially in large economies with political and economic stability such as Brazil," Mr León said. "Our group is more than 100 years old and we have seen other economies having up and down cycles. Today Brazil is not growing much, but there is no doubt that it will achieve stronger growth in the future." Many insurers have invested in the Brazilian market despite regulations that rank among the most complex in the world. For example, it took HDI-Gerling Seguros Industriais 12 months to meet all the regulatory and technical requirements demanded by the authorities before a licence was granted to operate in the country. Mr León said, however, that things appear to be taking a turn for the better for the insurance industry. "In the course of 2014 we have seen more optimism that we may be moving into a new phase in the insurance market," he said. "Market players have been called to give their opinion and ideas on how it is possible to add more dynamism to the sector."

HDI-Gerling Industrie Versicherung opens unit in Brazil

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