Paper: Govt subsidies to triple agri premiums to US$56mn this year

Bnamericas Published: Friday, September 15, 2006
Insurance executives expect government subsidies for agricultural insurance to more than triple premiums to 120mn reais (US$55.7mn) this year from 38mn reais last year, local financial daily Gazeta Mercantil reported. The federal government raised subsidies to 60.9mn reais last week to help cover agricultural insurance premiums for the 2006-07 harvest. The government had promised 20mn reais for the previous harvest but only used 2.3mn reais. The agriculture ministry authorized national insurers SBR, Aliança do Brasil and Nobre Seguros along with the local units of Spain's Mapfre and Germany's Allianz (NYSE: AZ) to offer the subsidized products for the coming harvest. "I'm really optimistic. Next year the government estimates putting 120mn reais in the budget for subsidies. If that happens, premiums will be 240mn reais in 2007," the daily quoted Aliança do Brasil underwriting director Wady José Mourão Cury as saying. Insurance federation Fenaseg has invited underwriting executives from Mexico to train underwriters in Brazil, he added. Federal bank Banco do Brasil ( BB) controls 70% of Aliança do Brasil, while local insurer SulAmérica holds the remaining 30%. Mapfre Seguros expects to increase premiums 50% from subsidized policies to 12mn reais this year with a focus on grains, especially soybeans, and sugarcane, according to the daily. Premiums from agricultural insurance totaled 225mn reais from 2000-05, while claims came to 462mn reais, the paper said.

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