The health care facilities and treatment in Brazil can be varied depending on where in the country you are. The Unified Health System (SUS) itself has been rated unsatisfactory by a survey conducted by the Brazilian Federal Medical Council, with the most frequent complaints being for lengthy waiting times, and difficult access to complex procedures (e.g. dialysis, chemotherapy and surgery). Concerns exist regarding private facilities as well, as some may be in the same poor condition as public ones.
The IPMI of Brazil in 2016 was reduced to 8.30%, 0.9 points below the global average. It also dropped lower than the country’s year-on-year Consumer Price Inflation of 8.74% - the first time CPI has been higher than IPMI in this survey’s history. This indicates that the IPMI inflation in Brazil is more likely linked to global IPMI movements than it is to consumer inflation, which has been significantly driven by Brazil’s economic struggles.
In 2015, the main IPMI drivers for Brazil were related to increasing fraudulent claims, stricter insurance regulations, expensive local private plans, and providers trying to recover from losses related to fraud and regulatory compliance costs. While these drivers continue to impact Brazil’s IPMI, we believe the country to also be part of the following driver:
- Insurance market predictions based on economic performance - Previously hailed as one of the emerging BRIC nations to watch, the recent economic performance of Brazil has left the wider insurance sector cautious about the price of premiums in the region.
- Economy driving an expat exodus - Many expats who flocked to the country when its economic fortunes looked stellar have now made the decision to repatriate home. Companies are also retreating, as three multinational banks (HSBC, Citigroup and Societe Generale) either abandoned or scaled back operations in the past year.
Brazil, who has previously seen both higher and lower end IPMI rankings in our report, appears to be on the low end of inflation this year. We expect that the less than great economic outlook with the loss of expat workforce may be a factor in insurers opting to treat the country like a low-cost Asian country for the year.
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