Swiss Re shares its view on Brazilian infrastructure

May 2011 - The third in a series of Swiss Re organized client conferences on the “Insurability of Infrastructure Projects” took place in Sao Paulo, Brazil on May 18th. The conference held in the Intercontinental Hotel hosted 105 representatives from insurance companies, insurance brokers and corporations in the infrastructure field.

Rolf Steiner, Region Head Brazil & Southern cone, offered an overview on infrastructure projects in Latin America and Brazil and the role of surety re/insurance in supporting the infrastructure framework. Brazil is the biggest receptor of infrastructure investment, accounting for 58% of the total Latin American infrastructure investment in 2008. Steiner pointed out that on a project basis, of the total US dollar amount invested in infrastructure projects in Latin America between 1990 – 2008, USD 39 billion were cancelled and another USD 30 billion were finished after the deadline. These figures underlie the importance of re/insurance in the fabric of life in Latin America.

One of the event highlights was the participation of Manuel Rossitto, Director of FIESP (Federação das Indústrias do Estado de São Paulo – Federation of industries of São Paulo state) and Director of SINICESP (Sindicato da Indústria da Construção Pesada do Estado de São Paulo - São Paulo state's heavy construction industry trade union), who outlined the challenges the São Paulo state government faces with Brazil’s booming economy. Rossitto grouped these challenges into two areas: efficiency and certainty of the legal framework and explained how the state government is tackling the issues. Furthermore, he shared São Paulo’s state objectives for 2022 in terms of infrastructure and housing investment.

Erika Schoch, Marine Manager Latin America, Luis Meneses, Engineering Manager Latin America and Maria Luisa Jallath, Casualty Manager Latin America, described the role that these three insurance lines play in an infrastructure project. Finally, Euler Alvarenga, Marine Underwriter, offered an overview on the risk management process.

In addition Fabio Corrias, Head of Corporate Solutions for Brazil & Southern Cone, highlighted the recently launched Brazil Flood Risks report. Brazil has traditionally had low exposure to natural disasters. However trends show that during the last five years the frequency of events such as heavy rains, floods and avalanches has increased. The most recent events occurred in January this year in the states of Sao Paulo and Rio de Janeiro, when floods killed more than 800 people and left some 6,000 homeless. Corrias also introduced the concept of parametric insurance solutions, which would help Brazilian state governments reduce the social and financial impact of natural disasters. Unlike traditional insurance, parametric solutions use a model to calculate the payout of the policy. This payout model enables a much more rapid payment, as no loss adjusters are required after a natural disaster.

This conference was sponsored by the Swiss Re Academy, Swiss Re's training center for employees and clients and will be repeated in Bogotá in November 2011. To learn more about the full range of courses of the Swiss Re Academy, follow this link.

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