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Sustainability 08 Sustainability: reflecting on the future 11 Sustainability challenges and possible solutions 12 Agenda for discussions on sustainable development 15 Managing the risk of extreme weather and climate events 19 CNseg action to disseminate the PSI

Principles for Sustainability Insurance 36 The PSI and the goals aligned with sustainable development 38 PSI Principles 41 Innovative ideas to boost sector performance 43 The winning projects and their alignment with the PSI

Social Responsibility 52 Survey focused on social responsibility and sustainability in corporate management 74 Social responsibility policy of companies in the sector

77 Performance of the companies and other entities in the sector

Summary The Sectorâ€™s Importance to Brazilian Development 198 The figures that underpin the economic and social activities and stimulate innovation 200 Payments to Brazilian society 204 The strategic role of Human Resources

The Insurance Market Segments 220 The four market segments 222 General Insurance Segment 224 Personal Segment 228 Supplementary Health Segment 236 Capitalization Segment

CNseg is pleased to announce the publishing of another edition of its Social Responsibility and Sustainability Report on the insurance market. The results shown herein reveal the growing commitment of companies in the sector to the sustainable development of the business, in harmony with environmental, social and economic values. Transparency in our relations with the various audiences is one of the pillars guiding the conduct of the insurance companies, as represented here by the confederation. The commitment to sustainable development is really part of the DNA of the insurance business, whose mission is the protection of people and assets, while seeking overall equilibrium. This is reflected in the working environments of the companies in the sector: in the relations with employees, consumers, the market, government and society in general. That is why sustainability in the insurance sector is a strategic approach whereby all the activities in the value chain are conducted responsibly and with a view to the near future. This is one of the components of the Principles for Sustainable Insurance (PSI) laid down by the UNEP Finance Initiative UN-UNEP/FI. The development of this enhanced awareness among insurance companies of the importance of sustainability has been strongly reflected in employee relations. During 2013, the sector continued its efforts directed at the development and professional qualifications of its employees, through in-house training and encouragement to participate in technical and post-graduate courses. It should be noted that the Brazilian insurance industry was among the sectors that hired the most management level professionals last year. Another significant detail concerns the profile of the workforce in sector companies: women continue to increase their participation and now represent 56.4% of the sector’s total human resources.

With regard to society in general, the insurance companies have always sought to harmonize their activities with the aspirations of their customers and business partners, to understand risk and manage it effectively, adopting innovative solutions that help improve business performance, and thereby contribute to the sustainability of the planet. To this end, CNseg has encouraged and rewarded innovative initiatives that are focused on the sustainable development of the sector, through the Antonio Carlos de Almeida Braga Awards for Insurance Innovation. This posture has guided the action of the insurance industry as it seeks to fulfill its primary function of providing reliable high quality products and services, while taking into account the country’s socio-economic scenario. In this respect, the PSI are seen as a pioneering initiative in the discussion of key issues such as climate change, extreme weather and climate events, environmental degradation, access to insurance, an aging population, financial education, solid waste disposal, good governance and ethical business practices. We know there is still much to be done, but there can be no doubt that we are on the right track in adopting attitudes and taking action that will bring us ever closer to the goal of the sustainable development of the insurance industry, for the mutual benefit of our employees, customers, suppliers, partners and the environment of which we are all a part.

Marco Antonio Rossi | CNseg President Term 2013-2016

Sustainability The role of insurance in the management and prevention of risk, payment of compensation, the mission to protect and provide peace of mind in the short and long term and contribute to the countryâ€™s sustainable development.

SUSTAINABILITY: reflecting on the future The concept of sustainability has been gaining

Sustainability in the insurance sector represents a

influence in the corporate world over the last

strategic approach whereby all the activities in the

couple of decades, leading to the adoption of

value chain, including interaction with the various

activities geared to sustainability by domestic and

participants, are conducted in a responsible

foreign companies and other organizations that

manner that is geared to the outlook for the near

share the desire to promote deep reflection about

future â€” identifying, assessing, managing and

the future.

monitoring the risks and opportunities associated with environmental, social and governance (ESG)

In the insurance industry, the commitment to

issues.

sustainable development is even more inherent, because sustainability is in the very DNA of the

It is also a responsibility to the market to provide

insurance business: protecting people and assets

reliable and high quality products and services -

and ensuring overall equilibrium underpins the

which requires close alignment with the aspirations

nature of insurance.

of the customers and business partners, in order to

Chapter 1

effectively understand and manage the risk, and

extreme weather and climate events, environmental

the adoption of innovative solutions that help to

degradation, insurance access, an aging population,

improve business performance and contribute to

financial education, solid waste disposal, good

the sustainability of the planet.

governance and ethical business practices.

Since they were introduced, in 2012, by the United

The challenge now is to build on and disseminate

Nations Environment Programme/Finance Initiative

the good practices, so that they permeate the

(UNEP/FI), in partnership with CNseg, the Principles

entire production chain and influence the behavior

for Sustainable Insurance (PSI) have contributed

of consumers, investors, regulators, governments

to the development of a new level of sustainable

and society in general. The engagement of

awareness among companies in the sector.

everyone towards this goal is essential. Those who do not play their part may find themselves

The PSI represent a pioneering initiative in the

having to answer to future generations. After all, a

discussion of key issues such as climate change,

sustainable planet implies a safer society.

The commitment to sustainable development is even more inherent, because sustainability is in the very DNA of the insurance business

Chapter 1

SUSTAINABILITY challenges and possible solutions UNEP/FI is the financial arm of the United Nations

In July 2013, CNseg launched a Portuguese version

that identifies issues that could have an impact

of the report on the global situation of sustainability

on the global environment. It embraces three

in insurance. Prepared by the Insurance Working

different sectors: banks, insurance companies and

Group of the UNEP Finance Initiative, the study was

investment funds.

based on pioneering global research conducted in 2009 by the working group, which looked at ESG

Discussions and initiatives in the insurance sector

factors in relation to insurance underwriting and

are addressed within the Principles for Sustainable

product development.

Insurance (PSI) initiative, which was launched in June 2012, during the Rio+20 conference. CNseg

The report contains reflections on the dynamics

participated in the group that was responsible for

of ESG factors and the fundamental insurance

drawing up the principles and immediately joined

processes and shows the present situation of

the initiative, as a supporting institution, pledged

sustainability in insurance, as well as the challenges

to disclose the principles and promote their

of sustainability and possible solutions.

adoption in the Brazilian market. According to the people who put the report In two years, Brazil has seen seven insurers and

together, the insurance industry has an important

one reinsurer sign up to the principles: Grupo

role to play in identifying future challenges for

Segurador Banco do Brasil e Mapfre, Bradesco

the financial system, mitigating systemic risks and

Seguros, Itaú Seguros, Mongeral Aegon Seguros,

preventing crises, including those arising from the

Porto Seguro Seguros, Seguradora Líder dos

unsustainable use of natural resources, which will

Consórcios do Seguro DPVAT, Sul América Seguros

affect the climate, biodiversity, ecosystems and

and Terra Brasis Resseguros.

water resources.

As a PSI supporting institution, CNseg has

According to the study, through the systematic

certain responsibilities that involve disclosing the

integration of ESG factors that relate to fundamental

principles among its members, conducting surveys,

insurance processes, the insurance companies will

providing training, hosting events and translating

be able to sustain their economic activities. What

materials. Performing at least one activity a year to

is more, they will be able to play a role in creating

promote the adoption and implementation of the

a more sustainable global economy that invests

PSI is also one of the set of tasks undertaken by the

in real long-term growth that is inclusive, genuine

supporting institutions.

prosperity and job creation.

Agenda for discussions on SUSTAINABLE development An initiative aimed at setting out an agenda

The responsibilities of the commission, set out

for debates and ensuring that the action related

in the agreement, entail periodic monitoring

to sustainable development in the insurance

of the adoption of the principles of the Letter

sector is more effective. That is the mission of the

of Intent; putting forward suggestions for the

governmentâ€™s Special Commission, set up under

development of plans and programs geared to

an amendment to the Letter of Intent (also known

the sustainable development of the insurance

as the Green Protocol).

industry; the appointment of Special Commission representatives to sign the amendment; and the

The commission comprises representatives of the

determining of rules to govern the procedures

Ministry of the Environment, CNseg, SindSeg-RJ/

and frequency of the meetings.

ES (Association of Private Insurance, Reinsurance, Supplementary Pension and Life Plan, Supplementary

The amendment also committed the Commission

Health and Capitalization Companies of the states of

to developing indicators for monitoring the

Rio de Janeiro and EspĂrito Santo), SUSEP (Private

performance of the insurance industry in relation

Insurance Agency), the Ministry of Finance and the

to the responsibilities set out in the Letter of

Rio de Janeiro State Department of the Environment.

Intent and to request from the insurance industry

the presentation of annual reports showing the

Environment at the time, Carlos Minc, described

progress made by the companies with regard to

the agreement as “a more powerful tool than the

achieving sustainability.

action of a thousand inspectors”.

The Letter of Intent was signed by CNseg,

When the amendment was signed, in September

Sindseg-RJ/ES

the

2012, three new clauses were inserted in the

Environment in 2009, with the aim of establishing

Letter of Intent, covering the accession of the Rio

guidelines for the implementation of socially and

de Janeiro State Department of the Environment,

environmentally responsible activities, thereby

alignment of the protocol with the Principles for

strengthening the sector’s position in regard to

Sustainable Insurance (PSI) and the creation of the

environmental preservation. The Minister of the

government’s Special Commission.

and

the

Ministry

The responsibilities of the commission, set out in the agreement, entail periodic monitoring of the adoption of the principles of the Letter of Intent and putting forward suggestions for the development of plans and programs geared to the sustainable development of the insurance industry.

Chapter 1

Managing the risk of extreme weather and CLIMATE events Through the ClimateWise initiative,

Without rapid and ambitious action to reduce

academic and research institutions such as

global emissions of greenhouse gases (GHG),

the Geneva Association and the University of

the study says, the capacity to keep the

Cambridge have been engaged in discussions

global temperature rises within limits that are

about the insurance industry’s role in managing

considered manageable or ‘safe’ will narrow

the risk associated with extreme weather and

significantly, leading to major alterations in

climate events. Alternatives for mitigating and

landscapes around the world that are most at

adapting to such events have generated many

risk and endangering human and economic

reports demonstrating the impact in terms of

well-being.

lives lost, homelessness and financial losses. The report goes on to state that, in this context, According

2013

report

the

and with diminishing public resources to

Intergovernmental Panel on Climate Change

manage the related losses, it is prudent and

(IPCC), which confirmed the accelerating pace of

also timely to reassess the social role and value

climate change — influenced by human activity

of insurance.

— adding that most aspects of climate change will persist for many centuries, even if CO2

To include the transfer of risk and insurance

emissions are stopped.

related approaches in development that is resilient to bad weather, the IPCC suggests

The changes are becoming manifest in the

that public and private agents, in partnership

increasing frequency and severity of extreme

with governments, should engage in a broader

weather and climate events such as droughts,

societal discussion about the use of insurance

flooding and large wildfires. Such short-term

and the role of the global insurance industry

events also bring about long-term changes such

as desertification and rising sea levels.

development pathways.

forging

climate

and

disaster

resilient

To include the transfer of risk and insurance related approaches in development that is resilient to bad weather, the IPCC suggests that public and private agents, in partnership with governments, should engage in a broader societal discussion about the use of insurance.

An essential activity in times of catastrophic loss Since July 2012, when it partnered with ClimateWise,

contribute to building adaptation to the effects

an organization backed by Cambridge University

of climate change, including disaster resilience.

that brings together leaders of the global insurance industry and promotes efforts for better

Where risk cannot be effectively reduced or

understanding, communication and action in

contained, supporting the transfer and sharing

relation to climatic risk, CNseg has been sharing the

of such risk through insurance mechanisms,

full reports on initiatives by global players to reduce

including risk pooling mechanisms.

the risk associated with climate-related disasters. Considering how insurance industry responses In 2013, based on the recommendations of the

to climate-related events can shape the behavior

IPCC and in partnership with the Munich Climate

and decisions of governments, communities and

Insurance Initiative (MCII) and UNEP/FI, ClimateWise

businesses in managing climate risk.

proposed to the global insurance industry that certain action be taken, as follows:

According

ClimateWise,

the

insurance

industry is uniquely placed in the world decarbonise

economy as a market mechanism for the

economic activity at the scale and pace demanded

sharing of risk, thereby removing this burden

from the shoulders of individuals, households,

Demonstrating scientific

leadership consensus

to and

supporting

corresponding public sector decision-making.

businesses, governments and other societal entities. The protection provided by insurance

Identifying and developing incentives to reduce

is critical in times of catastrophic losses.

climate risk, by promoting risk awareness, risk

Accordingly, insurance underpins innovation

prevention and risk reduction solutions that

and productive economic activities.

Chapter 1

Ocean warming changes the risk assessment A study by the Geneva Association, released in 2013,

increasingly likely to fail in trying to estimate

states that extreme weather and climate events

the probability of climatic events, thus pointing

are threatening the insurance companiesâ€™ ability

to the need for changes in the risk assessment

to make a precise estimate of the risk of a disaster.

methodology.

According to the document, there is strong evidence that the temperature of the oceans has increased in

In certain high-risk areas, the study considers

recent decades. And the oceans are the main drivers

that ocean warming and climate change threaten

of extreme global climate-related events.

the ability of insurance companies to accurately estimate the risk of any kind of natural disaster.

This suggests that the traditional approaches

To avoid market failures it is essential to tie the

to risk assessment, based on historical data, are

transfer of risk in with risk mitigation.

In certain high-risk areas, ocean warming and climate change threaten the ability of insurers to accurately estimate the risk of any kind of natural disaster.

Chapter 1

CNseg action to disseminate the

pSI

A groUp of InSUrerS participated in several meetings with CNsegâ€™s Sustainability Committee during 2013, in order to develop a sustainability agenda for the insurance market. The main objective is for the discussions about the subject to generate greater interest on the part of Brazilian insurers in signing up to UNEP/FIâ€™s Principles for Sustainable Insurance (PSI). The committee also has the task of developing new concepts and a more holistic view of risk for the insurance market, particularly in regard to the management of socio-environmental risk and improving the governance of companies in the sector. The initiative therefore ensures benefits for the market as a whole, but especially for companies that are on the committee and have the opportunity of participating in the discussions and assimilating the issues in their everyday operations. At an ordinary meeting on September 19, 2013, the CNseg Steering Committee approved four goals that had been proposed for the PSI by the Sustainability Committee, based on surveys conducted by CNseg, in partnership with BSD Consulting and the marketâ€™s leading insurance companies, to ensure that the goals can be achieved by 2015. The goals represent a commitment to tangible action to implement the PSI, by companies that are already signatories, and provide a stimulus for the non-signatory companies to start integrating the sustainability concepts within their operations.

Working Groups In 2013, the Sustainability Committee drew up

and opinions and the participation of a greater number of

an action plan focused on engaging insurance

market players. The purpose of the discussions within the

companies in regard to the Green Protocol and the PSI

WGs is to generate the circulation of knowledge among

and set up four Working Groups (WGs) covering the

the insurers and bring about more comprehensive risk

themes: Climate Change; Environmental Management

analysis, especially with regard to emerging risks, which

with the focus on the National Policy for Solid Waste;

are closely related to environmental issues.

Materiality; and Communication and Education. In addition to the studies carried out by the WGs, a Each group has a schedule of studies and

number of events were held in 2013 to disseminate

discussions relating to projects and initiatives

the concepts and topics that the groups are working

involving CNseg and its members. The themes

on but are still not widely known among the

for each group were based on research in the

industry’s professionals. Their participation in these

Brazilian market and the discussions that led to

initiatives has ensured greater understanding at the

the setting up of the Sustainability Committee.

companies about sustainability — the main idea of

International surveys and the PSI guidelines were

which is not to ‘save the planet’, but knowing how

also used in determining the themes of the WGs.

to manage risk effectively.

The groups are made up of professionals from different

Among the plans of the Sustainability Committee

insurance companies, thereby ensuring a diversity of views

are to develop a matrix of the environmental,

social and governance risks and opportunities

extreme weather and climate events, together

in the insurance sector, using a specialized

with the CNseg Service Center.

consultancy; to draw up an invitation letter for the hiring of consultants to evaluate the impact

The Sustainability Committee estimates that with

of the National Policy for Solid Waste on the

the PSI goals and the increased participation

insurance industry; to review the questionnaire

and

companies in the WGs and in events promoted

Sustainability Report; to develop a course on

by CNseg, more companies may change their

sustainability for the insurance industry; to

procedures, increase the transparency of their

establish PSI goals for the insurance market; and

information and understand better the risks and

to begin the work of setting up a database of

opportunities that exist in this changing world.

the

CNseg

Social

Responsibility

professionals

representing

the

insurance

The purpose of the discussion within the WGs is to generate the circulation of knowledge among the insurers and bring about more comprehensive risk analysis, especially with regard to emerging risks, which are closely related to environmental issues.

Activities of the Wgs

WG on Environmental Management with the focus on the National Policy for Solid Waste Legal and Operational Impact of National Policy For Solid Waste on the Insurance Market

MaY

The National Policy for Solid Waste (PNRS)

Aware of the implications of this regulatory

laid down rules for the allocation and appropriate

framework for the market and the adaptation that

disposal of the waste generated in the country’s

would be necessary to meet the policy requirements

various economic sectors. The new legislation

in everyday business, CNseg organized the event,

has made quite clear the shared responsibility

which attracted representatives of the Ministry of the

among the participants throughout the chain of

Environment’s Department for Institutional Liaison

production, comprising companies, government

and Environmental Citizenship, Argentina’s Center

and consumers, that creates new challenges and

for Road Safety and Research (CESVI) and SUSEP’s

opportunities for those involved.

International Relations Coordination.

Given the importance of the PNRS and its potential

Taking social and environmental issues into

repercussions for the insurance market, as well as

consideration when making decisions about risk

the risks and opportunities for the companies

acceptance and requiring the insured parties to

and their entire value chain, the Environmental

make the necessary adjustments for alignment with

Management WG proposed holding an event

the principles of sustainability will help insurers to

devoted to the topic.

fine tune their risk management processes, as well as generate new opportunities for business innovation.

Chapter 1

WG on Climate Change Seminar on Flooding Risk in Brazil Impact on the insurance market, government and society

August

Organized by Swiss Re, the seminar had the

integration platform, including the mapping of

support of CNseg, acting through its Service

areas at risk; provide the results of computational

Center (Ceser) in a cooperation agreement with

models it develops; and jointly develop products

Cemaden (National Center for the Monitoring

of mutual interest to the parties, such as

and Early Warning of Natural Disasters). The

bulletins about risks to asset security in Brazilian

purpose of the agreement is to develop, test

municipalities and maps showing vulnerability

and implement a system for predicting the

to economic losses and damage to infrastructure

occurrence of natural disasters in susceptible

from natural disasters.

areas throughout Brazil. At the seminar, studies, analyses and case studies Under the agreement, Ceser provides Cemaden

aimed at contributing to the development of

with

environmental

new products and innovative solutions in this

data and the results of statistical analyses

area were presented and there was an exhibition

of natural disasters; uses the data provided

of panels showing the stages of the mapping

by the center for product development; and

and evaluation of this type of risk in Brazil.

socio-economic

and

provides online access to information about risks to asset security in the event of a natural

The opening of the seminar was attended by

disaster.

representatives of Swiss Re Brasil and CNseg, who observed the debates between Ceser and

Cemaden must, in real time, provide Ceser/

Cemaden about the use of information for the

CNseg with the information stored in its data

development of new products.

Climate Change and Natural Disasters in Brazil Challenges and Opportunities for the Insurance Sector

SePTEMBER

Extreme weather and climate events

The following companies and/or entities were

and the forces that shape and amplify the risk

represented: The Geneva Association, the Brazilian

exposure of the insured parties and the insurers,

Academy of Sciences, the Ministry of Science,

as well as the action the insurance industry could

Technology and Innovationâ€™s Department of

take to mitigate the damage and strengthen the

Research and Development Policies and Programs,

resilience to catastrophic losses, were topics of

Chileâ€™s Insurance Company Association, INPE

discussion at the event, which was attended by

(National Institute for Space Research), Cemaden,

academic experts in the prediction and prevention

and the Technical Chamber for Sustainable

of extreme climate-related events and leaders in

Development of the Rio de Janeiro municipal

the public sector.

government.

WG on Communication and Education Sxecutive Seminar on Sustainability Leadership

JulY

CNseg, in partnership with Funenseg (National

on the business and determine their operational

School of Insurance), organized an Executive

strategies. Notable among the proposals was the

Seminar

Cambridge

introduction of a sustainable risk seal and the

Programme for Sustainability Leadership (CPSL),

drawing up of a report on environmental, social

in order to discuss the concept of sustainability

and governance performance.

the

University

and its application in insurers’ everyday business. The seminar was led by experts in sustainability The program developed by the University of

from academia and the market, with speakers from

Cambridge is applied on campus but can be tailored

Allianz Seguros, the CPSL and the ClimateWise

for implementation outside the university. CNseg’s

coordination at the CPSL, as well as representatives

proposal was provide the members of its Steering

from CNseg, IRB Brasil Re, Zurich do Brasil, Sul

Committee and senior executives in the market with

América, Bradesco Vida e Previdência, Bradesco

the opportunity to participate in the seminar in Brazil,

Saúde and Chubb do Brasil.

without cost to their companies, on the understanding that the sector’s engagement enhances the entire

The program involved a full day of talks and

insurance field.

workshops.

Simultaneous

translation

was

provided during the talks and workshops and Executives from the insurance companies and

all the material was available in both English

industry federations – FenaPrevi, FenaSaúde,

and Portuguese. The event was attended by 30

FenaCap and FenSeg – divided up into groups

executives from the Brazilian market.

to discuss the impact of sustainability concepts

Chapter 1

Conference on the GRI and the Insurance Market: SSustainability Reports — What’s the point?

OCTOBER

With the aim of raising awareness

subject, with talks given by representatives of the

of the importance of company disclosure of

sustainability areas at Petrobras, (Campinas Water

sustainability information and indicators, in

Supply and Sanitation Company), the GRI and the

partnership with the Global Reporting Initiative

Technical Chamber for Sustainable Development

(GRI), CNseg organized a conference on the

of the Rio de Janeiro municipal government.

In partnership with the Global Reporting Initiative (GRI), CNseg organized a thematic conference, with talks given by representatives of the sustainability areas at Petrobras, SANASA (Campinas Water Supply and Sanitation Company), the GRI and the Technical Chamber for Sustainable Development of the Rio de Janeiro municipal government.

Talks presented Under the aegis of the CNseg Sustainability Committee, a number of gatherings took place during the year that involved, among other initiatives, the presentation of the sustainable practices at Seguradora Líder – DPVAT, Sul América and Itaú Unibanco Seguros. Additionally, there were talks about: an operational tool for recovering costs and reducing losses in the identification, assessment, management and monitoring of risk; the opportunities associated with environmental, social and governance issues (by the Getúlio Vargas Foundation - FGV/RJ); the Sustainable Management in the Agricultural Insurance Chain project (by BB & Mapfre); the Corporate Sustainability Index (ISE); and the “Bolsa Socioambiental” socio-environmental stock market (by the BM & F Bovespa).

Partnerships

Chapter 1

The Geneva Association Two years ago, CNseg entered into a formal

Through research programs, regular publications

partnership for cooperation with The Geneva

and organizing international gatherings, the

Association, with a view to disclosing materials on

association works to promote understanding of the

climate change, produced by researchers at the

risks inherent to the business and is responsible for

organization, which would be of interest to the

generating and disseminating information.

insurance market. In June 2013, leaders of the insurance industry The Geneva Association is a benchmark entity with

elected Michael McGavick as chairman of the

a high profile, which brings together the leading

associationâ€™s board. His task is to provide continuity

insurance executives from around the world for

to the many discussions generated during the term

research into risk management and insurance

of his predecessor, Munich Re chairman Nikolaus

interfaces with various fields. Notable among its

von Bomhard, who headed the Geneva Association

areas of operation is studying the effects of climate

during the last four years.

change on the global insurance market.

Global Federation of Insurance Associations – GFIA Founded in October 2012 and with CNseg as

Through its ten working groups, the GFIA has

one of its members, the GFIA brings together

published documents on topics such as systemic

31 insurance associations from around the

risk, corporate governance, market conduct,

world, representing 87% of the insurance

commercial issues and financial inclusion. The

companies worldwide. Its goal is to address

GFIA Annual Report describes the activities of the

complex international issues that affect the

working groups and provides details about its

global insurance market, such as the work

members.

of the International Association of Insurance Supervisors (IAIS) in setting up ComFrame,

CNseg participates in the working groups’

a common framework for the supervision of

teleconferences, through SUREM (Market Relations

international groups; market behavior and

Department). The topics covered are: Market

commercial issues; and initiatives relating

Conduct, Financial Inclusion and the Working

to sustainability, natural disasters, financial

Group on Natural Disasters.

inclusion and combating money laundering. Furthermore, SUREM also attended the GFIA In 2013, the first anniversary of its founding,

AGM and meeting of the Working Group on

the GFIA published its annual report, setting

Natural Disasters, which took place in 2013 on

out its action on behalf of the world’s insurance

June 11th and 12th, in Italy, prior to the 5th

companies during the previous year.

International Insurance Conference - Insurance Europe, on June 13th.

WG on Natural Disasters The GFIA has a Working Group on Natural Disasters, which represents the interests of the insurance industry in the plans for Disaster Risk Management (DRM) in relation to such events, by means of engagement with stakeholders, including international regulatory bodies, standards organizations and governments, guided by the following principles:

Private insurance plays

and adequate to meet the

a key role in disaster risk

needs of the population in a

management and insurance companies have much to contribute. Governments should cooperate in the development of DRM plans.

post-event scenario.

promote the sharing of

information that can help to maximize the insurers’ ability to

The DRM approach

perform their functions within

in different jurisdictions

the DRM plan.

will vary, but must give priority to clear communication

The role of governments

of the expectations and

is to ensure that the

responsibilities prior to

national DRM plan is complete

Governments must

any event.

The pricing of insurance products must reflect the

risk taken on by the insurance and reinsurance companies.

Chapter 1

Ministry of the Environment In 2009, CNseg endorsed the Letter of Intent

An amendment signed in September 2012

known as the Green Insurance Protocol, along

included the Rio de Janeiro State Department

with the Ministry of the Environment and the

of the Environment as another participant and

insurance association Sindseg RJ/ES. The aim is

brought the principles of the Green Protocol into

to draw up guidelines for the implementation of

alignment with those of the PSI (see www.cnseg.

social and environmental responsibility action

org.br/protocolo verde-termo aditivo).

and thereby strengthen the industryâ€™s position on environmental preservation.

It also enabled the establishment of a Special Commission, comprising representatives of the

Under the protocol, the market is committed

Ministry of the Environment, CNseg, Sindseg RJ/

to providing insurance, private supplementary

ES, the private insurance agency SUSEP, the Rio

pension and capitalization products that foster

de Janeiro State Department of the Environment

improved quality of life and sustainable use of

and the Ministry of Finance. Its task is to organize

the environment; adopt environmental, social and

a schedule of debates, call for annual reports on

governance criteria in the selection of partners

activities involving sustainable practices and

and suppliers; and guide consumers in regard

draw up the necessary plans for the sustainable

to sustainable production practices and about

development of the insurance sector.

conscientious consumption.

Microinsurance Network The Microinsurance Network (MIN) is based in

With around 70 institutional members, MIN is

Luxembourg and has the mission of promoting

represented by more than 200 experts in 15

the development of insurance services for low-

different discussion groups and working groups.

income populations, encouraging the sharing of

A member since 2012, CNseg participates in

lessons learned, facilitating the generation and

two working groups: Insurance Education and

dissemination of knowledge and developing a

Consumer Protection.

multi-stakeholder platform.

The Microinsurance Network (MIN) has the mission of promoting the development of insurance services for lowincome populations, encouraging the sharing of lessons learned, facilitating the generation and dissemination of knowledge and developing a multi-stakeholder platform.

I’m Covered Project - Phase II Aimed at financial education focused

To strengthen the project sales force, scholarships

on insurance for low income communities,

were offered to enable community residents

the “Estou Seguro (I’m Covered)” project is

to participate in the first training course for

one of the microinsurance initiatives that

microinsurance brokers offered by the ENS. Five

illustrate the efforts of the insurance market to

young people from the community completed

promote socio-economic inclusion for millions

the course with the financing under the project

of people and to reduce the vulnerability of

and one of them was brought into the team of

households to insurable events.

brokers offering the products of the participating insurers to the Morro Santa Marta community.

The second phase of the project, which was implemented in the Santa Marta community,

Phase II of the I’m Covered Project was completed in

in Rio’s Botafogo district, was completed in

June 2013 and options for continuing the activities

2013. The project was originally conceived

are currently being evaluated. The I’m Covered

by CNseg, whose partners are the Institute

Project information and multimedia materials can

for Studies on Labor and Society (IETS), the

be accessed at: www.projetoestouseguro.org.br

International Labor Organization (ILO) and the National School of Insurance (ENS). When it

Activities included productions by the Os Martha

was launched in 2009, the initiative attracted

theater group, who staged four different plays

the interest of 17 major Brazilian insurance

covering risk management and insurance topics in

companies.

family situations, as well as performances by the Carroça de Mamulengos company of street actors.

Throughout the second phase, research has been carried out to gauge the assimilation of the

The purpose of the activities is to help consolidate

content by the public and provide a basis whereby

the idea that insurance is an important and

the insurers could get to know the desires and

accessible tool for protecting assets and ensuring

needs of these new consumers.

the well-being of the population.

SUSTAINABILITY in Insurance Study The developing ties between the insurance market

For this purpose, the study utilizes a scale developed

and academia has been further reinforced by

by the UN financial arm, UNEP/FI, which assesses

a pioneering scientific study under the Energy

the developing awareness in society of a given risk.

Planning Program of the Rio de Janeiro federal Universityâ€™s Alberto Luiz Coimbra Engineering

The study also addresses the 12 ESG factors utilized

Postgraduate and Research Institute (COPPE/

by the international organization for, among other

UFRJ), which was initiated in December 2013.

things, identifying if there is a discrepancy between companies in Brazil and elsewhere in the perceived

Coordinated by COPPE, with support from CNseg,

importance of these issues.

the study aims to discover to what extent the different sustainability factors interfere in the

The results will generate a report, which is

management of the Brazilian insurance industry.

expected to be released in 2014, and should

The study also seeks to ascertain how Brazilian

provide guidelines for the development of

insurers manage the risk related to their reduction

methodology for the analysis of climate risk and

of carbon emissions and/or the emissions of their

contribute to the development of new products

suppliers, contractors and partners.

for the Brazilian insurance market.

Principles for

Sustainable

Insurance

Four goals, aligned with sustainable development, have been set for insurance companies that have signed up to the PSI to achieve by 2015 and they are an inducement for other companies to join up.

The PSI and the goals aligned with sustainable development BRAZIL

THE

the

concrete action for the implementation of the

Principles

for

PSI by the companies that have signed up,

Sustainable Insurance (PSI), as a result of

while offering an incentive to the others to start

the hard work being carried out by CNseg

integrating sustainability concepts into their

to disseminate the concepts of sustainability

operations. Signing up to the PSI is optional.

implementation

vanguard the

among the companies in the sector. Goals 1, 2 and 4 we re proposed by the One of the most important 2013 initiatives in this

Sustainability Committee, based on surveys

regard was the approval in September, by the

conducted by CNseg, in partnership with

Confederationâ€™s Steering Committee, of four goals

BSD Consulting and the leading insurance

that are aligned with sustainable development

companies in Brazil, to conďŹ rm that the goals

and are based on environmental, social and

were achievable. The third goal was determined

governance (ESG) considerations, which are to be

as a result of the Confederationâ€™s strategies to

attained by companies in the sector by 2015.

bring insurance company practices more closely into alignment with the public policies that are

These goals show a commitment to taking

directly related to their business.

Chapter 2

2015 Goals 40% of insurance companies to

have ESG considerations integrated within their underwriting policies.

30% of insurance companies

to have a program of engagement with brokers on ESG issues.

50% of insurance companies to have

official municipal, state and federal public policies integrated within their social responsibility policies.

50% of insurance companies

to be reporting on ESG issues.

PSI PRINCIPLES

We will include in our

We will work together with

decision-making process

our customers and business

environmental, social and

partners to build awareness

governance considerations that

of environmental, social and

are relevant to the insurance

governance issues, and on

business.

the management of risk and development of expedients.

PSI 1 governs the integration

PSI 2 addresses the relationship

of ESG considerations within

with stakeholders with regard

the insurance company

to operational issues. The aim

management mechanisms

is to encourage the sector to

- strategies and policies;

assimilate ESG considerations

risk and underwriting;

throughout the value chain - in

products and services; claims

the relations with customers,

management, marketing and

suppliers, service providers,

investment.

insurers and reinsurers, brokers and the insurance sector in general.

4 We will work together with

We shall demonstrate

governments, regulators and

accountability and

other strategically important

transparency in our regular

bodies to promote broad

public disclosure of the

action within society regarding

progress made in implementing

environmental, social and

the principles.

governance issues.

PSI 3 aims to stimulate the

Aspects relating to the

management of ESG risk,

provision to stakeholders of

starting with the inďŹ‚uence of

information on the progress

the insurance sector over the

made in implementing

regulators and other decision

the PSI at the companies -

makers - government, regulatory

accountability in relation to

bodies, ďŹ nancial markets,

ESG practices and the Green

academia, the media, civil

Protocol, through annual or

society and trade associations.

sustainability reports and in the processes of dialogue and engagement.

Chapter 2

Innovative ideas to boost sector performance IN 2013, THE THIRD EDITION OF THE ANTONIO

determined by the UNEP Finance Initiative, in

CARLOS DE ALMEIDA BRAGA AWARD for

partnership with the global insurance industry.

Insurance Innovation, sponsored by CNseg since 2011, included 58 registered projects offering

The

projects

were

organized

into

three

responses to the challenge of stimulating the

categories: products and services, processes and

generation and adoption of innovative ideas that

communication and analysis showed that several

will have a signiďŹ cant impact on the performance

projects were aligned with more than one principle.

of the sector and on its relations with society.

There were four ďŹ nalists in each category and the results were announced in December.

The goal was, once again, to draw attention to sustainable development projects in the

Among the projects submitted for the award,

insurance market. The novelty in 2013 was

42 were in line with Principle 1; 26 were aligned

the

competing

with Principle 2; eight with Principle 3; and

for the award identify with at least one of

three companies submitted projects that were

the PSI, representing the three ESG facets, as

aligned with Principle 4.

requirement

that

projects

The projects that were submitted were organized into three categories: products and services, processes and communication and analysis showed that several projects were aligned with more than one principle. There were four finalists in each category and the results were announced in December.

Chapter 2

The

winning projects and their alignment with the

PSI

CATEGORY

Communication

Chapter 2

place

Company Bradesco Seguros S/A Project Digital accessibility breaks down communication barriers for the deaf Alignment Principle 1 and 4

ACCORDING TO the IBGE (Brazilian Institute for

3D animated character – Avatar, and was

Geography and Statistics), 5.1% of the Brazilian

developed following the recommendations of

population suffers from some kind of hearing

employees who have hearing disabilities.

impairment. Of those, 2.7 million are unable to read in Portuguese and use LIBRAS (Brazilian

This new accessibility provides the user with

Sign Language) as their ﬁrst language.

communication,

physical

access,

suitable

equipment and programs, software content and the The

difficulty

accessing

information,

presentation of information in a variety of formats.

in adapted language, in order to obtain suitable products and services, stimulated the

The project led to adaptations for people with

introduction of Bradesco Seguros Libras. This

physical and sensory disabilities, aligned with the

technological solution translates Portuguese

criteria of the WAI (Web Accessibility Initiative)

texts into LIBRAS, in real time, using a

and the prevailing legislation.

place

THE

OPENING

Company Terra Brasis Project Terra Report – special editions Alignment Principle 2

THE

BRAZILIAN

encouraging public and private investment

REINSURANCE MARKET, in 2007, enabled

to prevent, reduce and transfer disaster risk

impressive advances to be made in the sector

within the domestic market, leading to benefits

and the entry of new participants led to, among

not only for the insurance market but for all of

other things, signiﬁcant technological progress

Brazilian society.

that brought much improved risk analysis, which had hitherto been little explored.

The innovative studies carried out provide analysis of Brazil’s exposure to natural disasters

As a result of this initiative, efforts were

and show that, contrary to what is being said,

made to broaden the discussions and studies

Brazil is subject to the signiﬁcant and increasing

on the subject of Brazilian natural disasters,

occurrence of extreme weather events.

Social

Responsibility

The commitment of the companies and other entities to ethics and transparency in their relationships and the determining of goals to encourage the sustainable development of society and of the planetâ€™s natural resources.

Survey focused on social responsibility and sustainability in corporate management INITIATIVES DEVOTED to social responsibility and

other things, how the two topics are addressed in

sustainability are being permanently incorporated

company management. A total of 77 companies,

into the routine of the companies in the insurance

accounting for around 70% of the sectorâ€™s revenue,

sector. Consolidation of this trend was confirmed in a

with the exclusion of the Supplementary Health seg-

survey conducted by CNseg, which measures, among

ment, participated in the survey.

Chapter 3

Corporate Profile Brazilian companies are in the majority within the countryâ€™s insurance sector, accounting for 75% of the total, while the rest are either foreign or local subsidiaries of companies based abroad. Privately held companies predominate within the sector, with only 9% of insurance having listed shares that are traded in the stock market.

Company origin

Brazilian

75 %

25 %

Foreign

PolĂtica empresarial de capital

91 %

Publicly listed

Privately held

The number of independent companies, without ties to economic groups, remains significant in the Brazilian market, at 64%. Of the rest, 34% are linked to banks and 2% to companies that manage third party funds.

Economic group

64 % Independent

34 %

Bank

Reinsurance

Demonstrating the level of penetration of the Brazilian insurance market, it was found that 50% of the companies operate in 24 to 27 of the country’s federal units (FUs), while 18% are present in between 6 and 11 FUs. For 34% of companies, the percentage of their revenues earned in the state capitals ranges from 81% to 100%, while 18% of the companies obtain 21% to 40% of their revenues from those cities. Overall, 59% of the insurance companies have up to 20 branches, while another 25% have 21-60 branches.

Number of states (FUs) where active

24 to 27 FUs

50 %

Up to 5 FUs

14 %

6 to 11 FUs

18 %

12 to 17 FUs

9 %

18 to 23 FUs

9 %

Estimated percentage of revenue from state capitals Annual average (%)

Up to 20%

18 %

21% to 40%

18 %

41% to 60%

14 %

61% to 80%

16 %

81% to 100%

34 %

Number of branches

Up to 20

59 %

21 to 60

25 %

61 to 100

9 %

101 to 140

5 %

More than 141

2 %

Chapter 3

In 2013, the average number of employees per insurance company who were handling claims and benefit payments was 23,361 — of which 75% were company employees and 25% were outsourced. Working within the Customer Care (SAC) and Ombudsman services, the companies had an average of 5,517 and 370 employees, respectively.

Number of employees dealing with matters arising from claims / benefits Annual average

75 %

25 %

Company

Outsourced

Number of employees working in Customer Care Services (SAC)

54 % Company

5.517

46 % Outsourced

Number of employees working in the Ombudsman’s Office

88 % Company

370

12 % Outsourced

Social Responsibility and Sustainability Social responsibility and/or sustainability activities are performed by 89% of insurance companies. The vast majority (88%) have a specific area that is responsible for such initiatives. At 57% of the companies, this function is linked to the Executive Board and at 28% it is directly linked to the CEO. At 66% of the companies, up to three employees work in activities related to social responsibility and sustainable practices, whereas 15% of the companies have 12-15 employees working in this area. Companies in the insurance sector have signed up to numerous voluntary commitments and included are social responsibility and sustainability indicators. The Principles for Sustainable Insurance (PSI) have been signed by 19% of the companies and the UN Global Compact by 14%, while 9% are included in the BM&FBovespaâ€™s Corporate Responsibility Index (ISE). In line with these commitments, 93% of the companies have their own Code of Ethics and Conduct, while 63% have internal programs to encourage voluntary socio-environmental efforts among the employees, who participate in actions of this kind at 50% of the companies. Also, 55% of the insurance companies have an In-House Accident Prevention Committee (CIPA). Does your company conduct social responsibility and/or sustainability activities?

Yes

89%

No response

If so, is there a specific area responsible for this work?

88â€Š%

12â€Š%

Yes

Chapter 3

To which level of the company does it report?

Executive Board

57%

Management

15%

CEOâ€™s Office

28%

How many employees are allotted to this area/task?

Up to 3

66%

4 to 7

15%

8 to 11

12 to 15

15%

Is your company a signatory to any kind of voluntary commitment and is it included in any sustainability index? Principles for Sustainable Insurance (PSI) Principles for Responsible Investment (PRI) UN Global Compact National Pact for the Eradication of Slave Labor (PNETE) of the

19% 6% 14% 6%

International Labor Organization Carbon Disclosure Project (CDP)

12%

Natural Capital Declaration (NCD)

Corporate Sustainability Index (ISE) of the BM&FBovespa

Dow Jones Sustainability Index (DJSI)

Other

10%

No response

16%

Does your company have a Code of Ethics and/or Conduct?

93 %

3 %

4 %

Yes

No response

Does your company have a voluntary program of socio-environmental work?

63 % Yes

30 %

7 %

No response

Does it involve the employees?

50 %

50 % Yes

Does your company have a CIPA (In-House Accident Prevention Committee)?

55 % Yes

25 %

20 %

No response

Chapter 3

In 2013, 75% of the companies in the insurance sector participated in social responsibility projects through sponsorship, without involvement in the creation or development. The development of in-house projects was verified in 14% of the companies. In total, 109 projects were developed over the course of the year, in a number of different areas, but most notably in culture (19%), health (16%), education (16%), sports (15%) and Art (12%). The three greatest beneficiaries of the projects carried out during the year were children (21%), society in general (20%) and adolescents (18%).

Project development

Company initiative

14%

No response

73% 13%

No project development, just sponsorship

Project area

19% 12%

15% 16%

16%

Culture

Art

Sport

Education Professional Citizenship Training

Health

Environment Other

Destinatรกrios / beneficiados dos projetos

14%

Children

21%

18% Students

Elderly

8% 20%

Other

Adolescents

8% 7%

Health sector

Needy community

Society in general

Chapter 3

In 2013, the benefits of the governmentâ€™s tax incentive laws (Rouanet Law, Child and Adolescent Assistance Foundation - FIA and Sports Incentive Law) were claimed by 54% of the companies in the market that sponsored social responsibility projects. In 83% of the cases, the initiatives were carried out without the benefit of any partnerships, while in 17%, there was some kind of government support.

Does your company take advantage of the tax incentives offered under the Rouanet, Child and Adolescent Foundation (FIA), and Sports Incentive laws?

Yes

54%

23%

No response

23%

Was there any government partnership in the project/social initiative?

Yes

17%

83%

With regard to sustainable practices in the insurance sector’s activities, the companies have undertaken 333 internal initiatives aimed at and socio-environmental education and savings, sustainability and avoiding waste. A significant proportion of these activities were aimed at reducing the use of printed materials (15%), electricity savings (13%), waste separation and recycling (13%) and the disposal of electronic materials according to the standards set out in the National Policy for Solid Waste (12%).

Initiatives and practical activities aimed at socio-environmental education and savings, sustainability and avoiding waste.

Giving systematic consideration of environmental, social and governance (ESG) issues in strategies and operations.

7 %

Joining insurance industry participants to spread awareness of ESG issues, diminish the risk and develop solutions.

9 %

Working with society to disseminate information on ESG issues.

6 %

Publicly reporting ESG information on a regular basis (at least once a year).

8 %

Reducing the use of printed materials and reutilizing and/or recycling used paper.

15 %

Saving electricity, particularly in regard to elevators, air conditioning and other electrical equipment.

13 %

Separating waste and adopting a recycling program.

13 %

Making proper disposal of electronic materials, in accordance with the legislation on solid waste.

12 %

Diminishing the use of disposable or non-recyclable materials (such as paper or plastic cups).

13 %

Other

3 %

No response

1 %

Chapter 3

The companies carried out 93 activities aimed at boosting awareness and dissemination of a culture of social responsibility, adopting models of behavior that take into account environmental, social and governance (ESG) considerations. In 33% of the cases, these initiatives involved courses, lectures, training and guidance for employees and suppliers covering the principles of environmental education, including the rational use of non-renewable natural resources.

Implementing programs to build awareness of and promote a new culture of social responsibility, with a view to adopting standards of behavior geared towards ESG considerations

Providing courses / lectures / training / guidance for employees and/or suppliers on environmental education and the rational use of non-renewable resources.

33 %

Setting up and sustaining an Internal Committee (or similar body) devoted to analyzing and monitoring the initiatives and activities implemented.

24 %

Dedicated space on the website.

21 %

No response

22 %

To support the development and awareness of employees, 79% of the companies in the survey have educational assistance policies and 75% have training policies. Fully 89% of the companies hold talks for the employees — most of them on aspects of motivation (19%), technical issues (18%), health (16%) and work safety (13%).

Does your company have a policy of educational assistance?

79 % Yes

16 %

5 %

No response

Does your company have a policy of training assistance?

88 %

7 %

5 %

Yes

No response

If so, what are the lecture topics?

Consumer Protection Code (CDC)

19 %

Motivational

16 %

Health

13 %

Work safety

14 %

Financial education

18 %

Technical

14 %

Other

6 %

Suppliers and Contractors In their relationships with suppliers, 89% of the companies have a specific hiring policy and 72% have procedures for the monitoring of suppliers/service providers. Among those that perform such monitoring, 67% carry out audits and/or examinations of those procedures. And of those, 28% perform annual checks, 7% semi-annually, 5% monthly and 2% quarterly.

Does your company have policies governing the hiring of suppliers?

89 %

9 %

2 %

Yes

No response

Chapter 3

Does your company have procedures for the monitoring of its suppliers/contractors?

72 %

23%

5 %

Yes

No response

If so, does your company audit/examine them?

67 %

33 %

Yes

How often does your company audit/examine the monitoring of its suppliers?

Monthly

Quarterly

Semi-Annually

Annually

28%

Other

58%

Policies for the approval of suppliers and service providers that take into consideration possible socio-environmental violations are in place at 41% of the companies. And 9% offer training on ESG issues for their supply chain and service providers, using face-to-face methods in 80% of the cases.

Does the policy on supplier/contractor approval consider ESG issues?

41 %

18 %

Yes

No respondeu

Does your company provide training on ESG for its supply chain/contractors?

9 %

70%

21 %

Yes

No response

If so, what is the training format?

80 % Face-to-face

20 % No response

Chapter 3

Brokers As part of the efforts to supervise the performance of their main business partners, 59% of the companies have a process for monitoring the insurance brokers. Among them, 82% conduct auditing and inspection of the work of these professionals — 18% semi-annually, 12% monthly, 9% annually and 3% quarterly.

Does your company have a procedure for monitoring its brokers?

59 % Yes

27 %

14 %

No response

If so, does it audit/examine them?

82%

18%

Yes

How often does your company audit/examine the monitoring of its brokers?

Monthly

12%

Quarterly

Semi-Annually Annually Other

18% 9% 58%

With regard to ESG issues, 43% of the companies have a policy for the approval of its brokers that takes sustainable practices into consideration. And 21% provide training on the subject for those professionals — in 60% of the companies, these initiatives are in a face-to-face format, while in the other cases, the method is distance learning.

Does your company have a policy on broker approval that considers ESG issues?

43 %

41 %

16 %

Yes

No response

Does your company provide training on ESG issues for brokers?

21 % Yes

52 %

27 %

No response

33 %

7 %

If so, what is the training format?

60 % Face-to-face

E-Learning

(distance learning)

No response

Chapter 3

Customers Eighteen percent of the companies in the survey adopt customer approval policies that take ESG issues into consideration. There are procedures in place at 50% of the companies for monitoring policyholders and 86% of the companies that have them perform audits and examinations of those procedures, mostly on a monthly (29%) basis. Training customers in ESG practices is provided by 7% of companies â€” face-to-face in 75% of the cases and through distance learning for the rest.

Does your company have a policy on customer approval that considers ESG issues?

Yes

18%

64%

No response

18%

Does your company have procedures for monitoring its customers?

Yes

50%

36%

No response

14%

If so, does it audit/examine them?

86 %

14%

Yes

How often does your company audit/examine the monitoring of its customers?

Monthly

29%

Quarterly

Semi-Annually

11%

Annually

14%

Other

43%

Does your company provide training on ESG issues for its customers?

7 %

93 %

Yes

If so, what is the training format?

75 % Face-to-face

25 % E-Learning

(distance learning)

Chapter 3

In its day-to-day business, the Brazilian insurance industry still tends not to grant contractual or other benefits to policyholders that incorporate ESG considerations in their activities. Only 2% of the companies reported that they take ESG issues into consideration in their contracts. Does your company grant contractual or other benefits to policyholders that incorporate ESG considerations into their business model? Yes

59%

Other No response

9% 30%

Of the R$ 4.5 billion invested in remunerating company and outsourced employees and service providers in 2013, the companies allocated 40% to employee salaries and 30% in payments to other workers.

Salary expenses and social assistance to employees R$ milhĂľes

Consolidado Employee remuneration

1.774,9

39,5%

Contractors and Service Providers

1.354,7

30,1%

Payroll charges

768,8

17,1%

Benefits

598,6

13,3%

4.497,0

100,0%

58,6

12,1%

250,0

51,5%

7,0

1,4%

129,4

26,7%

20,4

4,2%

Leisure

5,3

1,1%

Other

14,3

2,9%

485,0

100,0%

Total Outros BenefĂcios Training Medical and Dental Assistance Group Life and Accident Insurance Supplementary Pension Child Day Care Assistance

Total de BenefĂcios

Allocation of resources R$ 4.5 billion Employee remuneration

40 %

Contractors and Service Providers

30 %

Payroll charges

17 %

Benefits

13 %

The spending on benefits represented 13% of the total spending and was led by spending on medical and dental care (52%) and supplementary pensions (27%).

Other Benefits

Medical and Dental Assistance

52 %

Group Life and Accident Insurance

1% 27%

Supplementary Pension Child Day Care Assistance

Leisure

Training

12%

Other

Chapter 3

Taxes The insurance companies paid R$ 19.19 billion in taxes during 2013. Of that sum, 52% corresponded to IOF (Tax on Financial Transactions), 16.1% to IRPJ (Corporate Income Tax) and 10.8% to CSLL (Social Contribution on Net Income).

Taxes and payroll charges IOF - Tax on Financial Transactions

52 %

PIS - Social Integration Program Contributions

2 %

INSS - National Social Security Contributions

3 %

FGTS - Employee Severance Indemnity Fund Contributions

1 %

COFINS - Social Security Funding Contributions

7 %

CSLL - Social Contribution on Net Income

11 %

IRPJ - Corporate Income Tax

16 %

ISS - Municipal Tax on Services

6 %

IPTU - Municipal Property Tax

2 %

Taxes and payroll charges R$ milhões

Consolidado PIS - Social Integration Program Contributions

298,5

1,6%

INSS - National Social Security Contributions

605,0

3,2%

FGTS - Employee Severance Indemnity Fund Contributions

197,4

1,0%

COFINS - Social Security Funding Contributions

1.419,1

7,4%

CSLL - Social Contribution on Net Income

2.067,4

10,8%

IRPJ - Corporate Income Tax

3.085,5

16,1%

ISS - Municipal Tax on Services

1.045,0

5,4%

77,0

0,4%

316,0

1,6%

15,3

0,1%

9.989,4

52,1%

73,6

0,4%

19.189,2

100,0%

Taxa de Fiscalização IPTU - Municipal Property Tax CSP - Employer’s Labor Union Contributions IOF - Tax on Financial Transactions Other Total

The sectorâ€™s importance to

brazilian development The total investment in the market, which reached R$ 602.5 billion in 2013, reinforces the importance of the role the insurance sector plays in the economy.

The figures that underpin the economic and social activities and stimulate INNOVATION The insurance industry has an important

The reserves built up by the accumulated premiums

role to play in the Brazilian economy â€” as in any

stimulate the development the financial and capital

other country â€” helping to foster development

markets and the establishing of long-term savings.

and income generation. The services provided

And the data observed by the industry last year

by the different market segments protect lives

reinforce this importance.

and assets, ensure the smooth working of the economy and encourage innovation.

It is worth pointing out that, in December 2013, SUSEP made some changes in the concept of market

Specialized in assessing the risk involved in

premiums, leading representatives of the sector to

each business and, in exchange for a premium,

work on reconciling the figures.

absorbing the losses covered, the insurance companies are responsible for the effective

However, at the time this report went to press,

management of risk, allowing individuals and

the work had not yet been completed, which

companies to venture into riskier activities.

may mean small adjustments will be made to the figures in future publications.

Chapter 4

199

Based on the results calculated by the CNseg

insurance, household income, health cover, pension

member federations, the investment represented

plans and savings bonds redeemed or drawn)

by the sum of the technical provisions and the net

amounted to more than R$ 182 billion.

worth of the companies in the sector was equivalent to over 12% of the Brazilian Gross Domestic Product

The market figures leave no doubt about the

(GDP), at a total of R$ 602.5 billion. The volume of

positive effects that insurance brings, which in

collected premiums came to R$ 294.2 billion.

turn have a positive impact on other economic sectors, by facilitating the acquisition of capital

The payments made by the sector under the various

goods and consumer durables, such as cars and

forms of compensation (property damage and life

real estate.

The reserves built up by the accumulated premiums stimulate the development of the financial and capital markets and the establishing of long-term savings. And the data observed by the industry last year reinforce this importance.

Payments to Brazilian SOCIETY The companies that comprise the national insurance industry paid the Brazilian population more than R$ 182 billion over the course of the year.

The year 2013 bucked the trend. At

to generate domestic savings. In 2013, the insurance

the global level, despite the timid recovery of

contribution to GDP reached 6%.

economies in North America and Europe, the economic performance has been weak. According

During the year, the 1,662 companies in the

to the World Bank, the paltry growth of 2.5% in

market together paid more than R$ 182 billion

Latin America was caused by a slowing of global

to Brazilian society â€” equivalent to over 62% of

trade, a more difficult financial climate and less

their revenue for the year, of R$ 294.2 billion. The

favorable markets for commodities.

contribution of the General Insurance, Pension and Life, Supplementary Health and Capitalization

However, running counter to the global tendency

segments to the technical reserves, which

towards stagnation, the Brazilian insurance industry,

guarantees the insured wealth, amounted to R$

once again, showed expansion that was higher than

490.5 billion â€” an increase of 13.4% compared to

expected, thus strengthening the industryâ€™s capacity

the figure for the previous year.

201

Chapter 4

The Insurance Market in 2013

Number of companies working in:

2013

2012

1499

1542

Personal (Pension and Life)

Open-Ended Supplementary Pension Entities

Capitalization

Damages Supplementary Health

Consolidated Insurance Market Revenue

2013

2012

Share of GDP 2013

Change % 2013/2012

294.187

257.421

6,1%

14,28%

General Insurance segment

60.566

51.346

1,3%

17,96%

Personal segment

99.806

92.465

2,1%

7,94%

112.842

97.018

2,3%

16,31%

20.974

16.592

0,4%

26,41%

602.529

546.964

12,4%

10,16%

Technical Provisions

490.525

432.710

10,1%

13,36%

Net Worth

112.003

114.254

2,3%

-1,97%

Nominal GDP

4.844.815

4.392.094

Supplementary Health segment Capitalization segment Investment

According to the World Bank, the paltry growth of 2.5% in Latin America was caused by a slowing of global trade, a more difficult financial climate and less favorable markets for commodities.

10,31%

Preservation of household goods, income and health Funds invested in the preservation of health, The Supplementary Health segment, the largest in the Brazilian insurance market, paid out more than R$ 91.6 billion, from resources invested in health preservation, during 2013. The funds were allocated to the payment of medical and dental expenses, which showed an increase of 14.7% over the figure for the previous year. The Personal segment, which includes activities relating to open-ended supplementary pensions and life and personal accident insurance, paid to society a total of R$ 48.2 billion in compensation, benefits and redemptions. The General Insurance segment, responsible for the protection of property and goods, allocated around R$ 28.5 billion in payments. The Capitalization segment, which contributes to the building of savings and to financial education, paid out the total sum of R$ 14.1 billion in final and early redemptions and draws during 2013.

Payments to society R$ millions

share of GdP 2013

change % 2013/2012

insurance Market

2013

2012

General Insurance segment

28.518

26.165

0,6%

8,99%

Personal segment

48.212

35.329

1,0%

36,47%

Supplementary Health segment

91.613

79.870

1,9%

14,70%

Capitalization segment

14.104

11.451

0,3%

23,16%

182.446

152.815

3,8%

19,39%

Payments to society

Chapter 4

203

The strategic role of HUMAN RESOURCES Human resource management is becoming

Interns and apprentices continued to integrate

of growing strategic importance in the development

the staff in all segments of the business, with

of an organizational culture focused on constant

942 and 1,159 individuals taken on, respectively,

innovation and improvement, while at the same

during the year. Moreover, outsourced staff

playing an essential role within the company hierarchy.

continued to represent a significant contingent, with a total of 17,161 in all areas of the market.

The companies in the Brazilian insurance sector,

People with Special Needs (PSN) accounted for

well aware that their personnel are the most

1,454 employees. At the end of the year, the

valuable factor in the organizationâ€™s activities, in

number of staff hired was higher those dismissed,

the face of the performance demands from the

the proportions of total employees being 17.35%

market, invested R$ 5 billion in HR during 2013.

and 15.36%, respectively.

The total number of employees allocated

Women represented 56.4% of total employees

throughout all the business segments, according

in the insurance sector (25,780), against 43.6%

to Brazilian market statistics, amounted to 45,705

for men (19,925). The majority (50.2%) of the

at the end of 2013. During the year, the companies

employees in the sector work at their company

hired 7,929 new staff members.

head offices.

Chapter 4

205

The predominant age range among the employees

in three youngest age groups, while men were

is from 26 to 35 years old, representing 18,942

preponderant in the other two.

staff. Next is the age range from 36 to 45 years old, with 11,778 employees, followed by those up to 25

This information is part of a survey conducted by

years of age, representing 8,726 employees.

CNseg, with the participation of 77 companies in the Brazilian insurance sector that together

The number of people between the ages of 46 and

account for about 70% of the sectorâ€™s revenues,

55 totaled 5,007, while employees over the age

with the exception of the Supplementary Health

of 56 came to 1,252. Women were in the majority

segment.

Employee Information

37,55%

17,35%

Hirings

15,36%

Dismissals

3,18%

2,06%

2,54%

Interns

Apprentices

Outsourced

Consolidated Hirings

7.929

Dismissals

7.021

Interns

942

Apprentices

1.159

Outsourced

17.161

People with special needs (PSN) Total

1.454 35.666

PSN

Employee Distribution by Gender

Male

43,6%

Female

56,4%

Number of Employees at Head Office

Male

47%

Female

53%

Number of Employees at Branches

Male

42%

Female

58%

Chapter 4

Employee Distribution by Age Group / Gender

Up to 25

8.726

19%

26 to 35

18.942

41%

36 to 45

11.778

26%

46 to 55

5.007

11%

Over 55

1.252

Consolidated Male

Female

Up to 25

3.520

5.206

26 to 35

7.748

11.194

36 to 45

5.254

6.524

46 to 55

2.595

2.412

Over 55

808

444

19.925

25.780

Total per Gender Overall Total

45.705

207

Allocation of Resources Of the R$ 4.98 billion invested in HR by companies in the sector, 39.5% corresponded to salaries, 30.1% to the remuneration of contractors and service providers, 17.1% to payroll charges and 13.3% to employee benefits. Investment in training, medical and dental care, group life insurance, supplementary pensions, childcare assistance, leisure and other benefits came to a total of R$ 485 million.

Payroll Expenses R$ millions

Consolidated Employee Remuneration (Salaries)

1.774,9

39,5 %

Contractors and Service Providers

1.354,7

30,1 %

Payroll Charges

768,8

17,1 %

Benefits

598,6

13,3 %

4.497,0

100,0 %

58,6

12,1 %

250,0

51,5 %

7,0

1,4 %

129,4

26,7 %

20,4

4,2 %

Leisure

5,3

1,1 %

Other

14,3

2,9 %

485,0

100,0 %

Total

Other Benefits Training Medical and Dental Assistance Group Life and Accident Insurance Supplementary Pension Child Day Care Assistance

Total Benefits

209

Chapter 4

Educational Level Although the proportion of men and women with master’s, doctoral or post-graduate qualifications varies from one business segment to another, the consolidated figures show that women form the majority in all three cases. Moreover, at the end of 2013, women were also in the majority among the employees with a university degree, an incomplete university course and a completed secondary education. Men were in the majority only in the ‘other’ category, which refers to lower educational attainments.

Employee Distribution by Educational Level

Master’s / Doctorate / Post-graduate

5.762

12,6 %

Completed university course

18.509

40,5 %

Incomplete university course

11.502

25,2 %

8.419

18,4 %

Other 1.513

3,3 %

Completed secondary education

Consolidated Total Male

Female

Master’s / Doctorate / Post-graduate

2.840

2.922

5.762

Completed university course

7.647

10.862

18.509

Incomplete university course

5.198

6.304

11.502

Completed secondary education

3.465

4.954

8.419

775

738

1.513

19.925

25.780

Other Total by Gender

45.705 Overall Total

45.705

Companies and their employees In terms of remuneration policy, men continue to earn the highest salaries in the market, representing 93% of the 2,614 professionals who are in the five highest pay grades in the industry. However, among those who are in the ten lowest pay grades, women were in the majority, accounting for 68%, against 32% for men.

Number of Employees in the 5 highest pay grades

Male

93%

Female

Number of Employees in the 10 lowest pay grades

Male

32%

Female

68%

Chapter 4

211

Males were predominant in positions at the strategic and tactical level in the insurance market. Among the former, which includes partners, owners, presidents, CEOs and directors, men represented 85.22% of a total of 501 professionals. Amongst the latter, which includes managers, supervisors, coordinators, project leaders and other intermediate management roles, 53.71% of the 8,267 professionals were male. At the operational level, women were more numerous, accounting for 59.2% of technicians and operators.

Number of Employees at the Strategic Level (partners, owners, presidents, CEOs, directors)

Male

85%

Female

15%

Number of Employees at the Tactical Level (managers, supervisors, coordinators, project leaders and other intermediate management functions)

Male

54%

Female

46%

Number of Employees at the Operational Level (technicians and operators)

Male

59%

Female

41%

The greatest proportion of employees in the insurance market in 2013 worked in the commercial area: 45.16%. The second greatest proportion worked in the technical area, at 25.96%, followed by administrative and financial, at 22.69%. The corporate area, which covers positions dealing with strategy, investor relations and governance, accounted for 6.17% of the employees. In 2013, the various courses sponsored by the companies for their employees offered a total of 107,296 places. Most of these were on in-house courses: 90,910 (84.72%).

Number of Employees working in the Technical area (Reinsurance, Coinsurance, Claims, Risk, Issues, Technical)

Male

49%

Female

51%

Number of Employees working in the Commercial area (Production, Marketing, Products, Customer Care, Telemarketing)

Male

38%

Female

62%

Number of Employees working in the Administrative-Financial areas (ICT, Finance, Accounting, Human Resources, Services)

Male

52%

Female

48%

Chapter 4

Number of Employees working in the Corporate area (Strategy, Investor Relations, Corporate Governance)

Male

39%

Female

61%

Employees on Courses Sponsored by their Company

In-House Courses

85%

Outside Courses

15%

213

Social Responsibility and Sustainability Report Companies that participated in the CNseg survey: 1

Ace Seguradora S.A.

Aig Seguros Brasil S.A.

Alfa Previdência e Vida S.A.

Alfa Seguradora S.A.

Allianz Saúde S.A.

Allianz Seguros S.A.

Aplub - Associação dos Profissionais Liberais Universitários do Brasil

Aplub Capitalização S.A.

Assurant Seguradora S.A.

Atlântica Companhia de Seguros

Azul Companhia de Seguros Gerais

Bmc Previdência Privada S.A.

Bradesco Auto/Re Companhia de Seguros

Bradesco Capitalização S.A.

Bradesco Saúde S/A

Bradesco Seguros S.A.

Bradesco Vida e Previdência S.A.

Brasilcap Capitalização S.A.

Chapter 4

Companies that participated in the CNseg survey: 19

Brasilprev Seguros e Previdência S.A.

Caixa Capitalização S.A.

Caixa Seguradora Especializada em Saúde S/A

Caixa Seguradora S.A.

Caixa Vida e Previdência S.A.

Cardif Capitalização S.A.

Centauro Vida e Previdência S.A.

Chubb do Brasil Companhia de Seguros

Companhia de Seguros Aliança da Bahia

Companhia Excelsior de Seguros

Confiança Cia de Seguros

Gboex - Gremio Beneficente

Generali Brasil Seguros S.A.

Hdi Seguros S.A.

Hsbc Seguros (Brasil) S.A.

Icatu Capitalização S.A.

Icatu Seguros S.A.

Indiana Seguros S.A.

Itaú Seguros de Auto e Residência S.A.

Itauseg Saúde S/A

J. Malucelli Seguradora S.A.

215

Companies that participated in the CNseg survey: 40

J. Malucelli Seguros S.A.

Liberty Seguros S.A.

Liderança Capitalização S/A

Luterprev- Entidade Luterana de Previdência

Mapfre Affinity Seguradora S.A.

Mapfre Capitalização S.A.

Mapfre Previdência S.A.

Mapfre Seguradora de Crédito à Exportação S.A.

Mapfre Seguros Gerais S.A.

Mapfre Vida S.A.

Mbm Previdência Privada

Mediservice – Administradora de Planos de Saúde S.A.

Metlife Planos Odontológicos Ltda.

Metropolitan Life Seguros e Previdência Privada S.A.

Mongeral Aegon Seguros e Previdência S. A.

Nobre Seguradora do Brasil S.A.

Porto Seguro - Seguro Saúde S/A

Porto Seguro Capitalização S.A.

Porto Seguro Companhia de Seguros Gerais

Chapter 4

Companies that participated in the CNseg survey: 59

Porto Seguro Vida e Previdência S.A.

Prudential do Brasil Seguros de Vida S.A.

Qbe Brasil Seguros S.A.

Sabemi Seguradora S.A.

Seguradora Líder dos Consórcios do Seguro DPVAT S.A.

Sul América Capitalização S.A. – Sulacap

Sul América Companhia de Seguro Saúde

Sul América Companhia de Seguros Gerais

Sul América Companhia Nacional de Seguros

Sul América Odontológico S.A.

Sul América Saúde Companhia de Seguros

Sul América Seguro Saúde S/A

Sul América Seguros de Pessoas e Previdência S.A.

Sul América Serviços de Saúde S/A

Tokio Marine Seguradora S.A.

União Previdenciária Cometa do Brasil – Comprev

Unimed Seguradora S.A.

Unimed Seguros Patrimoniais S.A.

Unimed Seguros Saúde S/A

217

The insurance market

segments

Ensuring the recovery of assets and protecting life is a social function of the segments that comprise the insurance sector. In 2013, the payments made to society exceeded R$ 182 billion.

The four market segments They help to ensure protection of life, health, assets and retirement for the Brazilian population.

The AMounT of MoneY that was paid to

The insurance market once again registered

Brazilian society in the form of compensation,

double digit growth, in 2013, a performance

remuneration,

health

that was far superior to that of the Brazilian

preservation, draws and security redemptions in

GDP. The General Insurance, Pension and Life,

2013 came to over R$ 182 billion, distributed as

Supplementary

follows: Pensions and Life, R$ 48.2 billion ; General

segments grew by 14.3%, with a turnover of R$

Insurance, R$ 28.5 billion; Supplementary Health,

294.2 billion.

asset

indemnification,

R$ 91.6 billion; and Capitalization, R$ 14.1 billion.

Health

and

Capitalization

Chapter 5

221

For a few years now, the performance of the

of inflation and currency stabilization since the

insurance sector has surpassed the growth of the

introduction of the Real Plan, and in recent years,

Brazilian economy. There are a number of reasons

a reduction in unemployment and increase in real

for this, most notably: repressed demand built

income, along with growing consumer awareness

up over many years of high inflation, the taming

of the protection offered by insurance products.

The insurance market once again registered double digit growth, in 2013, a performance that was far superior to that of the Brazilian GDP. The General Insurance, Pension and Life, Supplementary Health and Capitalization segments grew by 14.3%, with a turnover of R$ 294.2 billion.

General INSURANCE segment The compensation paid to society in 2013 amounted to R$ 28.5 billion, 9% more than in the previous year. The figures shown by the General Insurance

increase of 12.8% over 2012. The total number

segment over the course of the year show

of vehicles with private insurance cover in 2013

increasing penetration of insurance products at

amounted to 17 million, representing 30% of

various social levels and greater awareness among

the Brazilian fleet, a statistic that reveals the

the Brazilian population of the importance of

significant growth potential of the portfolio in

protecting the assets that have been acquired. The

the years to come. The data has a direct impact

compensation paid to society in 2013 amounted to

on the payment of the DPVAT compulsory

R$ 28.5 billion, 9% more than in the previous year,

insurance.

when the total was R$ 26.2 billion. The segment includes Vehicle, Property, Special Risk, Civil

Property

insurance

(home,

business,

Liability, Transport, Financial Risk, Credit, Housing,

condominium and electronic equipment) also

Marine, Rural and DPVAT (Personal Injury Caused

made a significant payment to society, with the

by Land Motor Vehicles) insurance.

disbursement of R$ 2.1 billion in compensation, 16.7% more than in the previous year. Despite

As in previous years, the leading area was vehicle

the penetration still being low, home insurance

insurance, which accounted for nearly 56% of

accounted for R$ 398 million in indemnifications

the total indemnities paid, at R$ 18 billion - an

paid in 2013.

Chapter 5

223

Rural insurance is assuming growing importance

greatest number of the countryâ€™s Economically

in guaranteeing the harvests, which are becoming

Active Population (EAP).

increasingly subject to the effects of bad weather, with R$ 772 million paid out to farmers during the

Motorcycles were, once again, the yearâ€™s

year, an increase of 3.9% over the amount paid in

greatest villains, responsible for 71% of the

2012, of R$ 743 million.

accident indemnifications. The evening is the time when the greatest number of motorcycle

Other areas of the business that also paid out

accidents are recorded.

significant amounts in compensation last year were Civil Liability (R$ 322 million) and Transport

The Southeast, where the largest proportion of

(R$ 1.9 billion).

the national fleet is registered, also registered the highest number of fatal traffic accidents, with

The DPVAT insurance paid out on 633,845

37% of the total indemnifications for fatalities

claims throughout Brazil in 2013, an increase of

paid to residents of the region. The Northeast

25% compared to 2012. One detail that stands

accounted for 34% of the cases of compensation

out is fact that over 50.9% of the road accident

for permanent disability, while the South recorded

victims were in the 18-34 year age range, which

the highest number of reimbursements for medical

is precisely the range in which one finds the

expenses, at 51% of the total.

The DPVAT insurance paid out on 633,845 claims throughout Brazil in 2013, an increase of 25% compared to 2012.

PERSONAL segment Using a broad range of products, the segment aims to protect individuals and households from the negative financial impact of adversity.

The personal segment, providing individual risk

it eliminates the risk of default (credit insurance), the

and well-being coverage through life insurance

interruption of children or adolescents’ education

and open-ended supplementary pension plans,

(education insurance) and major financial impact

plays an important role in the country’s economic

arising from loss of income from employment

and social development.

(unemployment and income protection insurance).

Using a broad range of products, the segment

Then there is home insurance, aimed at

aims to protect individuals and households from

guaranteeing, in the event of a situation provided

the negative financial impact of adversity that

for in the contract, the settlement of mortgage

we are all likely to face at some time in our lives.

payments, including properties acquired under the federal government’s “Minha Casa Minha

To this end, the insurance companies and open-

Vida (My Home, My Life)” program. This reduces

ended supplementary pension bodies set up and

the risk of default, makes it possible to obtain a

market a variety of plans, all aimed at easing the

reduction of the interest charged on these loans

financial pressure arising from situations such

and enables more people to have access to home

as disability, serious illness, loss or reduction of

ownership, thus stimulating the construction

income or death.

sector, a powerful job creator.

Personal

insurance

serves

meaningful

socioeconomic purpose, since, amongst other things,

Personal micro-insurance, a field that has recently

become

regulated,

aimed

protecting people in the lower income groups,

will better serve an increasing number of people

thereby

and fulfill the needs, desires and possibilities of

contributing

towards

social

and

financial inclusion and a fairer society.

each one.

Plans of a welfare nature also provide financial

This analysis has shown that the demographic

protection in the event of death or disability

change in Brazil and the challenges that this

and, particularly, supplementing retirement

brings are a major factor to be considered,

income, so that the elderly can better enjoy this

particularly when developing new products,

stage of life.

given that the countryâ€™s population is aging and living longer.

Aware of the important economic and social role of the segments it represents, the statutory

According

IBGE

(Brazilian

Institute

board of FenaPrevi (National Federation for

Geography and Statistics) data, the age group of

Private Pensions and Life Insurance) continuously

60 years or older will be larger than the group of

monitors the economic, social and demographic

children up to the age of 14 years, as of 2030, and

scenario and also the countryâ€™s technological

by 2055 the proportion of the elderly in the total

and scientific progress, studying the feedback

population will be greater than that of children

and always seeking to introduce initiatives that

and young people up to 29 years old.

Personal micro-insurance, a field that has recently become regulated, is aimed at protecting people in the lower income groups, thereby contributing towards social and financial inclusion and a fairer society.

for

Forecast population distribution, by age group - Brazil - 2020/2060

13,8

41,3

% 16,2

18,6

21,0

23,8

2020

31,6

33,7

40,2

39,1

38,0

17,1

16,3

15,8

15,3

43,1 42,6

20,9

29,4

42,1 42,7

24,0

26,8

22,6

21,0

19,1

2025

19,4

18,1

41,3

17,6

16,4

15,5

14,8

14,1

13,5

13,0

2030

2035

2040

2045

2050

2055

2060

60 or over

30 to 59

15 to 29

0 to 14

Sources: IBGE, Forecast Population of Brazil, by Gender and Age, for the period 2000/2060, 2013 review and Forecast Population of the Federation Units, by Gender and Age, for the period 2000/2030, 2013 review.

A comparison of the UN demographic pyramid for 2010 with the one estimated for 2050 shows the pace of this demographic change. BRASIL 2010

BRASIL 2050

105 100 90 80 70 60 50 40 30 20 10 0 5

Fonte: Population Ageing and Development. United Nations. 2012

Chapter 5

227

One has to also consider the fact that the elderly

etc.) that is very different from that observed

population is living longer and showing very

in previous generations.

different characteristics from those of the past, in various aspects: health, outlook on life, work

Thus, the challenge to the personal segment is

relationships, spending habits, etc..

to develop products that are suitable for this expanding consumer group, because the demand

According to the survey, The Elderly in Brazil,

for insurance and pension services will change

conducted by the Data Popular Institute and

quite radically.

released in 2013, of the 22.3 million Brazilians over the age of 60, approximately 3.3 million -

Such changes should lead to the adoption of

2.2 million men and 1.1 million women - despite

initiatives, including educational ones, to encourage

being retired on a pension, continue to work.

a culture of long-term savings, which is the only way to enable a pattern of increasingly broad

This phenomenon of retirees returning to the

consumption over an increasingly longer period.

labor market, which is recent in Brazil and will tend to grow, is linked to improvements in

Attentive to all these changes, the FenaPrevi

health conditions, the interest of companies in

statutory board will carry out a strategic

the services of experienced professionals and

realignment in 2014, so that, based on the latest

their own need to supplement their income.

trends, the federation and its members will be

Hence, also, the emergence of a new pattern

able to put forward initiatives that will contribute

of consumption on the part of the elderly

more and better to the countryâ€™s sustained social

(culture, leisure, tourism, consumer goods,

and economic development.

Supplementary HEALTH segment The positive cycle of improving average income and employment levels has helped the segment to grow.

The 31 operators that are members of

Among the members of the federation, 97.3%

FenaSaĂşde were responsible for covering 27.1

of beneficiaries are on full plans, which cover

million beneficiaries, representing 38.1% of the

outpatient and hospital care, with or without

beneficiaries in the supplementary health market

obstetric coverage. In the supplementary health

at the end of December 2013. The number of

field, these products represented 93.3% of the

beneficiaries increased by 8.9% over the previous

total beneficiaries at the end of December 2013.

12 months. At the time they were signed, 91.4% of the The supplementary health market had a total of 71

beneficiaries of medical plans and 97.5% of dental

million beneficiaries on health plans and insurance

plans are covered by new plans, guaranteed under

and grew by 5.6% over the same period. The

Law no 9,656/98. In the supplementary health

growth in the sector was mainly driven by higher

field as a whole, such plans represent 87.9% and

real average income and employment levels.

97.7% of the total, respectively.

1 The beneficiaries refers to the number of people reported to the SIB (Beneficiaries Information System) as being covered by the plans. 2 Represents the sum of hospital and outpatient care + referrals.

229

Chapter 5

Sources and Uses of Funds

R$ 6.0 billion (13.6% of revenue) allocated to other expenses incurred by the operators

Revenue from the installments on the private health

(administrative, marketing and taxes).

and insurance plans of the FenaSaúde members amounted to R$ 44.3 billion in 2013, representing

Healthcare spending consumed 80.5% of the

39.2% of the total revenue of the supplementary

revenue, which means that for every R$ 100

health segment during the period. Of that total,

received in the form of monthly installments on

R$ 42.3 billion was used to cover healthcare,

the plans, almost R$ 80.5 were used to cover the

administrative, marketing and tax expenses. The

cost of providing dental and medical services for

operating income for the period was R$ 2 billion,

the beneficiaries. Other expenses consumed a

equivalent to 4.5% of the revenue.

further R$ 13.6.

The resources allocated to covering expenses -

The difference between the revenue and expenses

equivalent to 95.5% of the installment revenue -

is the net operating income of the operators, which

were used as follows:

came to R$ 2 billion. These resources remunerate the investors and fund future investments. It should

R$ 35.7 billion (80.5% of revenue) allocated to healthcare expenses, to cover professional services

and

the

costs

the

be noted that for every R$ 100 earned, only R$ 4.5 is used to remunerate the investors.

health

establishments.

Revenue from the installments on the private health and insurance plans of the FenaSaúde members amounted to R$ 44.3 billion in 2013, representing 39.2% of the total revenue of the supplementary health segment during the period. Data 2013

Sources and Uses of Funds

R$ Milhões

(%)

Income from installments

44.288

100,0

Expenses

42.313

95,5

35.668

80,5

6.010

13,6

635

1,4

1.974

4,5

Healthcare Administrative1 Taxes Net Operating Income

Source: Document showing periodical information about the operators of private healthcare plans - DIOPS/ANS - accessed on April 11, 2014. Note: ¹Includes marketing expenses..

Technical Provisions by the FenaSaúde members Over the past five years, the balance of the technical provisions made by the federation’s members has increased by 165%, which shows the segment’s commitment to its solvency and to maintaining the quality of the services provided to society. Modalidade Group medical cover Specialized health insurance Group dental cover Total

2009

2010

2011

2012²

502.355.147

1.462.047.703

1.758.787.516

2.090.980.549

3.923.338.468

4.770.203.170

4.775.330.660

6.161.335.607

7.328.104.660

8.003.957.047

27.425.160

44.743.135

72.552.802

103.581.116

165.207.924

6.282.121.499 7.992.675.926 9.522.666.325

12.092.503.438

5.299.983.477

2013

Source: Document showing periodical information about the operators of private healthcare plans - DIOPS/ANS - accessed on April 11, 2014. Notes: ¹ The technical provisions are calculated as follows: 211 technical provisions for healthcare (current liabilities) + 2,311 technical provisions for healthcare (long-term liabilities). ² As of 2012, the basis for calculating the technical provisions changed: 211 technical provisions for healthcare (current liabilities) + 2,311 technical provisions for medical-hospital care (non-current liabilities) + 2,312 technical provisions for dental care (non-current liabilities).

Chapter 5

231

Beneficiaries Beneficiaries¹ of health plans, by types of cover and care, according to the type of plan

FenaSaúde - december I 2013

Medical care, with or without dental cover Type of plan Total

Outpatient

Hospital²

Hospital² and outpatient

Referrals

Not specified

Exclusivamente odontológico

Total médico e Excl. Odonto

Total

14.949.159

12.561

218.798

13.716.057

828.392

173.351

12.128.322 27.077.481

Group

13.045.727

11.940

99.597

12.132.466

801.724

–

10.633.752 23.679.479

1.730.046

618

119.201

1.583.558

26.668

1.490.784

3.220.830

173.386

–

173.350

3.786

177.172

New

13.664.069

9.460

105.813

12.720.404

828.392

–

11.826.376 25.490.445

Group

12.496.412

9.335

92.905

1.592.448

801.724

–

10.336.226 22.832.638

1.167.657

125

12.908

1.127.956

26.668

–

1.490.150

2.657.807

1.285.090

3.101

112.985

995.653

–

173.351

301.946

1.587.036

Group

549.315

2.605

6.692

540.018

–

297.526

846.841

Individual

562.389

493

106.293

455.602

–

634

563.023

Not specified

173.386

–

173.350

3.786

177.172

Individual Not specified

Individual Old

Source: Beneficiary Information System - ANS/MS - 12/2013 Note: ¹ The term “beneficiary” refers to the individuals covered by a health plan, which may include a number of people besides the title holder. ² Includes hospital plans with or without obstetrics.

Beneficiaries of medical plans (with or without odontology), by region and federal unit, according to the type of plan

FenaSaúde - december I 2013

Medical care, with or without dental cover Major regions and federal units

New

Old

Total Total

Group

Individual

Total

Group

Individual

Not specified

Brasil

14.949.159

13.547.047

12.378.138

1.168.909

1.292.894

552.845

566.550

173.499

Norte

285.208

258.184

256.086

2.098

14.884

10.379

3.272

1.233

31.849

31.640

31.567

1.654

1.284

359

2.322

2.298

2.253

320

236

159.756

143.030

142.624

406

4.492

3.678

615

199

1.238

1.025

1.001

310

273

Pará

69.532

62.282

60.950

1.332

6.137

3.202

2.057

878

Amapá

13.388

12.610

12.493

117

631

504

Tocantins

7.123

5.299

5.198

101

1.340

1.202

Nordeste

1.558.472

1.355.427

1.175.293

180.134

186.350

48.880

113.832

23.638

Maranhão

105.511

93.503

91.954

1.549

5.163

3.733

1.204

226

Piauí

14.758

13.798

13.739

982

824

118

Ceará

91.933

84.439

61.701

22.738

7.814

5.508

1.605

701

149.861

147.717

78.383

69.334

2.765

1.639

757

369

46.615

42.505

40.571

1.934

3.844

2.682

979

183

470.402

398.569

341.417

57.152

69.425

11.085

42.595

15.745

Alagoas

71.023

62.773

46.851

15.922

6.167

2.583

2.635

949

Sergipe

26.170

23.718

23.508

210

2.066

1.042

858

166

582.199

488.405

477.169

11.236

88.124

19.784

63.081

5.259

Rondônia Acre Amazonas Roraima

Rio Grande do Norte Paraíba Pernambuco

Bahia

233

Chapter 5

Continuation

Medical care, with or without dental cover Major regions and federal units

New

Old

Total Individual

Not specified

425.193

419.058

141.618

66.060

41.107

21.850

3.103

861

7.376

5.179

1.404

793

2.307.909

267.513

287.207

145.807

103.190

38.210

7.394.072

6.783.673

610.399

625.226

233.100

292.614

99.512

842.340

778.442

712.112

66.330

73.003

49.443

21.008

2.552

Paraná

434.541

410.130

345.682

64.448

25.192

15.847

7.825

1.520

Santa Catarina

147.606

126.634

125.922

712

24.506

22.972

1.197

337

Rio Grande do Sul

260.193

241.678

240.508

1.170

23.305

10.624

11.986

695

Centro-Oeste

711.839

641.266

604.915

36.351

32.788

18.950

9.380

4.458

Mato Grosso do Sul

45.689

40.051

39.603

448

3.361

2.612

632

117

Mato Grosso

37.158

31.391

31.029

362

3.718

2.860

744

114

Goiás

172.164

159.180

146.104

13.076

9.029

5.459

1.075

2.495

Distrito Federal

456.828

410.644

388.179

22.465

16.680

8.019

6.929

1.732

Total

Group

Total

Group

11.551.281

10.513.709

9.629.715

883.994

985.869

524.140

453.510

448.289

5.221

98.569

90.705

89.844

Rio de Janeiro

2.852.114

2.575.422

São Paulo

8.076.458

Sul

Sudeste Minas Gerais Espírito Santo

UF não Identificada

Individual

Source: Beneficiary Information System - ANS/MS - 12/2013 Note: The term “beneficiary” refers to the individuals covered by a health plan, which may include a number of people besides the title holder.

Beneficiaries of exclusive dental plans , by region and federal unit, according to the type of plan

FenaSaúde - december I 2013

Dental only Major regions and federal units

New

Old

Total Total

Group

Individual

Total

Group

Individual

Not specified

Brasil

12.128.322

11.826.376

10.336.226

1.490.150

301.946

297.526

3.786

Norte

392.247

381.595

330.787

50.808

10.652

23.375

22.381

18.285

4.096

994

5.411

5.032

3.282

1.750

379

228.641

225.154

208.194

16.960

3.487

3.092

2.776

1.994

782

316

97.341

93.378

70.647

22.731

3.963

8.704

8.255

6.098

2.157

449

Tocantins

25.683

24.619

22.287

2.332

1.064

Nordeste

1.586.405

1.551.151

1.229.192

321.959

35.254

34.779

450

Maranhão

74.369

71.901

57.357

14.544

2.468

Piauí

18.855

17.829

12.808

5.021

1.026

Ceará

103.840

98.810

71.015

27.795

5.030

5.022

Rio Grande do Norte

77.329

75.916

54.622

21.294

1.413

Paraíba

38.133

36.523

27.719

8.804

1.610

Pernambuco

406.712

398.195

344.293

53.902

8.517

8.514

Alagoas

110.702

109.674

67.753

41.921

1.028

Sergipe

77.678

76.878

49.181

27.697

800

678.787

665.425

544.444

120.981

13.362

12.898

609

439

Rondônia Acre Amazonas Roraima Pará Amapá

Bahia

235

Chapter 5

Continuation

Dental only Major regions and federal units

New

Old

Total Individual

Not specified

204.860

3.306

37.513

37.484

27.562

2.924

2.337

554

587

2.095.524

513.234

42.346

41.639

152

4.424.350

4.071.084

353.266

125.971

123.400

2.538

966.801

935.241

854.892

80.349

31.560

31.513

Paraná

462.480

453.123

409.234

43.889

9.357

9.329

Santa Catarina

193.581

188.025

175.104

12.921

5.556

5.545

Rio Grande do Sul

310.740

294.093

270.554

23.539

16.647

16.639

1.043.317

1.027.591

964.315

63.276

15.726

15.722

Mato Grosso do Sul

62.046

59.704

53.973

5.731

2.342

2.341

Mato Grosso

74.955

72.354

64.689

7.665

2.601

Goiás

217.475

212.971

191.437

21.534

4.504

Distrito Federal

688.841

682.562

654.216

28.346

6.279

6.276

Total

Group

Total

Group

8.139.509

7.930.755

6.956.999

973.756

208.754

Minas Gerais

747.945

710.432

630.738

79.694

Espírito Santo

190.139

187.215

159.653

Rio de Janeiro

2.651.104

2.608.758

São Paulo

4.550.321

Sul

Sudeste

Centro-Oeste

UF não Identificada

Individual

CAPITALIZATION segment The social importance of the segment is growing: during 2013 the companies in the segment paid out the equivalent of R$ 3.8 million per working day. The social importance of the Capitalization

It is an encouraging picture, in the light of other

segment is growing. At the end of 2013, there

indicators, such as household debt and the level

were 34 million bondholders in Brazil. The

of over-indebtedness, a situation as perverse

number is so high (about 15% of the Brazilian

as it is worrying and has motivated studies on

population) that it increases the burden of

changing the rules of the Consumer Protection

responsibility of all the bodies that are directly

Code, in order to protect particularly the lowest

involved in the segment: capitalization firms,

income segment of the population.

business partners, the sectorâ€™s watchdog and FenaCap itself.

In this context, the capitalization firms have worked to make the elements that involve the capitalization

It is also a figure to be celebrated. It shows that

contracts increasingly transparent, while seeking to

a significant proportion of society sees savings

get closer to the consumers and others directly or

bonds as a way to save money and cultivate the

indirectly affected by their activities and obtain a

hope of better days ahead, when the fulfillment

better understanding of their wishes. This involves

of dreams can become a real possibility. Over the

expanding both the financial education activities

course of 2013, the companies in the segment

and the institutional communication initiatives, in

paid out the equivalent of R$ 3.8 million per

order to diffuse knowledge of the products and,

working day.

especially, their benefits.

Chapter 5

237

During a year in which the segment registered

The steady and continual expansion of the segment,

record

which has surpassed the milestone of R$ 26 billion

macroeconomic instability, the capitalization

in reserves and paid more than R$ 752 million in

firms returned to society, in the form of final or

taxes, is aligned with the principles of sustainable

early redemptions and draws, a total of R$ 14.1

growth, in social, cultural and economic terms.

billion. These resources return to the market, drive

Everything suggests that the coming years will be

the economy and provide security for families.

promising ones for capitalization.

high

turnover,

the

midst

Savings bond reserves

26 the R$ billion

22,5

2012

2013

Draws and Redemptions During 2013, 13.5 billion savings bonds were redeemed, for a total of R$ 13.1 billion. Meanwhile, 360,000 bonds were picked out in random draws, with the payouts totaling R$ 1 billion. Payments to society