Comprehensive Homeowners Microinsurance in Brazil: Estimation of Pricing and Market Potential

This study examines the question of comprehensive microinsurance for Brazilian homeowners. In particular, the study calculates (i) pricing for selected types of microinsurance homeowner's coverages and insured amounts and (ii) the estimated market potential of this product. The Brazilian agency charged with responsibility for regulation of private insurance, SUSEP, has determined that microinsurance should be aimed at families with a monthly per capita income of up to two minimum wages. According to this criterion, the study finds that there are more than 42 million households in Brazil eligible for microinsurance. The study also finds that microinsurance premiums for these households would be very low (US $0.97 to 2.03 per month)-less than 1% of average household income. This type of insurance would certainly be viable, considering the calculated market size of approximately US $780 million per year. These figures show that there is significant potential for the expansion of the microinsurance market in Brazil.