With Regulatory Nod, XL to Start Insurance Operations in Brazil

XL Group says it now has final approval from Brazilian regulators to start insurance operations in the South American country.

XL Seguros Brasil, located in Sao Paulo, is expected to begin offering a range of casualty, property, professional and specialty insurance products sometime during the 2012 first quarter, the company says.

In April 2008, XL Re announced it was entering the reinsurance market in Brazil as it was opened to the private sector. The company was approved to begin that operation in June.

“Brazil is at the intersection of global development, connectivity and growth,” Mike McGavick, XL’s CEO, says in a statement. “We are thrilled to expand our operations in the country.”

According to Bruno Laval, regional manager for XL’s insurance segment in Latin America, Brazil held 42 percent of South America’s non-life insurance premiums in 2010, and forecasts predict the country’s non-life market could reach $160 billion by 2030. “Local investment programs, global attention and a diversified spread of trading partners and manufactured products position the country for continued opportunities,” Laval says.

Long-established domestic monopolies that barred foreign entry into Latin American markets have been abolished, according to a late 2011 report on emerging markets from Swiss Re. Latin America’s premiums jumped from $45 billion in 2001 to $128 billion in 2010.

However, U.S. life and P&C insurers are urging Brazil to stop newer resolutions restricting reinsurance access to only domestic reinsurers.

Hub International entered the Latin American market late last year with its buy of Harmonia Corretora de Seguros.