According to Dyogo Oliveira, who was Minister of Planning, GDP should advance 2.5% in 2025 and inflation is below 3.9%
The president of (National Confederation of Insurers), 49, is one of the optimistic voices with the direction of the economy in Brazil. Former Minister of Planning and former President of (National Bank for Economic and Social Development) in the government of (2016-2019), the economist projects 2.5% growth of GDP (Gross Domestic Product) and inflation of 3.9 % in 2025.
The impact, he says, will be positive for the sector sector. After moving 11.6% in 2024 – in nominal terms – says that by 2025 the increase will be 11%.
“At CNseg we have optimistic scenarios. For 2025, I see a commodity market and strong unemployment work and a salary wage growing to 7%. There are factors that lead me to believe that we will again have a positive surprise at the end of the year ”, said in an interview with Poder360.
Watch the full interview (31m58s):
Dyogo understands that there is a great retressed demand for insurance in the country. One of the examples cited was domestic insurance. In the floods of Rio Grande do Sul, he estimates losses of $ 100 billion. But only 6% of homes had insurance.
“On the broader horizon, these events grew at frequency and impact. Brazil has always had floods, dry, gale. But it was rare and impacted less. We don’t expect it to happen again, but it guarantees nothing, ”he said.
Read excerpts from the interview:
POWER360 – The insurance sector had a real growth of 7.6% in 2024. It was 11.6% nominal. What sectors have led the discharge?
Dyogo Oliveira – The growth of the sector has been vigorous in recent years and well distributed among products. Social Security was one of the fastest growing: 16%. Warranty products rose 20%. And insurance of damage, life, among others, also grew well. And we continue with positive perspectives. By 2025, we estimated 11% in nominal terms, close to 7% real. We project inflation by 3.9%.
Does social security growth have any connection with the reform?
Little. The result reflected the increase in salary, the level of employment and the reduction in the indebtedness of families. It has a little of the program unfolds. Then it can increase the savings. This is quickly reflected in this pension product. It is a sector that accumulates R $ 1.2 trillion in reserves of participants. But the limited public social security scenario and several changes in the rules, which have not yet ended, encourage people to think about private pension. Everyone is aware that you can’t trust the INSS alone.
What is the percentage of Brazilian workers who have private social security?
This is one of the industry’s concerns and great challenge. The percentage is low. Approximately 15% of the economically active population.
Dyogo says that hiring insurance in Brazil is still below world average in many sectors, such as rural production, public works and even vehicle insurance
Can you compare with other countries?
Then confuse a little. Some countries have no public pension system. In the United States, the standard is private pension, even among public servants. In Canada, too. Europe has a more robust public pension system. It varies a lot among countries. But certainly our number is far below what Brazil should have.
And how much should Brazil have in CNseg’s accounts?
Hard to make a conjecture. Ideally, all workers had supplementary social security. For the reason I said: public is not sustainable. I was Minister of Planning, I know this reality well. The capitalization regime needs to be adopted. The best way is to use the private pension system. Then you combine a basic retirement limited in terms of rules, access, calculation, etc., but universal. On the other hand, workers will have a retirement income supplement.
Economic projections for 2025 are worse than in 2024. Can I impact the sector?
At CNseg we have more optimistic scenarios. For 2025 I see a commodity market and strong unemployment work and a salary wage growing to 7%. There are factors that lead me to believe that we will have a positive surprise again at the end of the year. This scenario benefits the insurance sector. We calculate inflation below 4% and growth close to 2.5%.
How did tragedies like Rio Grande do Sul influence the insurance sector? And how does the sector respond to this type of event?
I will speak from two perspectives. In the short term, these events in recent years are within statistics and technical provisions of the sector. Did not affect the reality of the insurance. We paid $ 6 billion in compensation in Rio Grande do Sul last year. And did not affect the financial health of companies. What worries is that people have little safe. We estimate an economic loss of more than $ 100 billion for floods. Only 6% had insurance. It is very little. In the United States, it is almost 40%. We need to expand. On the broader horizon, these events grew at frequency and impact. Brazil has always had floods, dry, gale. But it was rare and impacted less. We don’t expect it to happen again, but it guarantees nothing. As there is a rapid change, past statistics are no longer suitable for evaluating the future. We have good and long term models, but we have difficulty predicting the next 1 or 2 years. Another issue is the country’s infrastructure, which has no insurance. Highways, roads, railways, ports, airports have little protection for weather incidents.
But is there insurance in these environments for other incidents?
Yes, but climatic events, no. The infrastructures granted have some level of insurance. We are approaching the government to generate new products, bring solutions. It is a risk that had not existed for 20, 30 years. The biggest obstacle is demand. People do not have the habit of hiring insurance. Only 15% of homes have insurance. Even car, the product with the highest participation, only 30% of the fleet has. If someone hit your car, there is a 70% chance of him not being safe. Events like Rio Grande do Sul serve as a warning. Those who had insurance has already been compensated, rebuilt the house, bought furniture. Who did not have, is experiencing difficulties. The insurance sector understands and knows how to manage risk to reduce damage. That is why we have insisted on the infrastructure and public buildings.
And how does it work in the case of works stopped? The TCU estimates 10,000 federal and 21,000 in total.
In Brazilian law, there is a possibility of contracting work end insurance, where the insurer can assume the conclusion. But it is limited to large works. The law has not yet been regulated. It is only used in some states. It will bring a big change. When I was in government, we studied the paralyzed works a lot. The government sometimes bids based on a basic project without detailing. It does not use solid criteria. Those who give the lowest price, not necessarily a qualified company for the work. Then it has no conditions and is more expensive than expected. The use of construction -related insurance will allow better, good quality works that will effectively be completed.
Former Planning Minister Dyogo says that a new pension reform will be needed and that the private pension sector is ready to make a greater commitment
With insurance is the trend that the number of stopped works fall?
Over time, yes. It is the international experience. Brazil sometimes takes time to adopt solutions that are already peaceful in the rest of the world. In any developed OECD, hiring work insurance is indisputable. Evident that this needs to evolve gradually. Starting with larger works, we go a good way. The most wasted money is that of the work that is not over.
Agro also has little safe. Something like 6% of the total. Still, it is one of the most dynamic sectors of the Brazilian economy.
In 2024 we estimated that only 6% of the planted area had coverage. It is worrying about the size of agribusiness and the increase of climate incidents, with more periods of drought, excess rain, flood, frost. Everything affects production. If you lose a crop, you cannot pay loans, financing and need to renegotiate. It is accumulating debts and the small and medium rural producer are in fragile condition. Rural insurance is 90% directed to small and medium. We are discussing with the government the expansion of resources and the creation of a stabilization fund. One year is all right and, in the following, gives problem. It is volatile. The international comparison draws attention. In the United States, practically 100% of production has insurance. In some places in Europe it is mandatory. Financing is critical, but if you do not have rural insurance, with each crop that has a problem, it makes it impossible.
CNseg is an enthusiast of COP30. Can the absence of the United States weaken the practical result of the event?
We are committed to participating in COP because the insurance sector plays a role in the face of climate change and needs to be considered in these discussions. It is a sector that takes and generates risks. It has a lot to contribute. The global scenario is challenging. The posture of the United States has always been clauding. The motivations are concrete. It is a very dependent economy of oil and large greenhouse gas station. And has lost a lot of competitiveness over time. The main commercial partner of most countries is no longer the United States, but China, including Brazil. They have difficulty adopting restrictive measures. The problem is that this puts a question about the evolution of this agenda. In my view, what will define the success or not of COP is the posture of the Chinese. China can lead this agenda globally. This is the great question about COP.
For CNseg, insurance should be mentioned as part of the strategy to combat climate change
We are looking for exactly that, that the final statement of COP makes reference to this role of the insurance sector. That is recognized as part of the solution for climate change.
The sector seeks the creation of social insurance for catastrophes. How would it work?
You have such an event in Rio Grande do Sul in May. People received the government check in November, December. It came late. And there is no criticism of the rulers. They are the ways of the public sector. It has to have a project, approve law, registration, commitment, all the bureaucracy. It is not possible to make a drowning. The idea of catastrophe social insurance is to have an instrument that will already be prepared, with identified people. When you have an incident, it is already known what families are on site and they will receive immediate compensation the next day by Pix. Our proposal is $ 10,000 per residence.
