The insurance sector in Brazil is undergoing a profound transformation. Premium revenue surpassed R$ 663 bn in 2023, and analysts predict that this double-digit growth trend is likely to continue over the coming years. But the shift isn’t just about numbers—it signals a broader rethink of how insurers operate, particularly in the way they approach pricing, according to Akur8.
An increasingly digital and diverse market has put pressure on insurers to act swiftly and deliver personalised products. O
n-demand coverage, bespoke policies, and heightened expectations from digitally savvy consumers are now the norm. Despite this, many insurers continue to rely on legacy processes and manual tools to develop and maintain their pricing models.
Spreadsheets remain the dominant tool for building pricing models in many companies. Research from UFPB and internal market estimates indicate that over 60% of insurers in Brazil still rely on spreadsheets or fragmented scripts for modelling (UFPB, 2023).
This reliance complicates version control, change tracking, and the consistent governance required across teams.
New legal framework
The Insurance Legal Framework (Law 15.040/2024), approved in 2024 and set to take effect later this year, marks the most significant regulatory overhaul in the sector in six decades (Valor Económico).
The law introduces clearer rules on transparency, simpler contract language, and heightened accountability throughout the insurance process.
Under this new framework, opaque models, undocumented changes, or unexplained decisions are no longer acceptable. Pricing has moved beyond being purely a technical task; it is now closely tied to regulatory compliance and fostering trust in the market.
Transparency and traceability are essential
SUSEP, Brazil’s insurance regulator, emphasises that pricing transparency and technical governance are now regulatory priorities.
The 2025 agenda requires documented justifications, explainable segmentations, and well-structured modelling processes. Monthly reports are more comprehensive than ever, signalling that transparency is no longer a differentiator but a baseline requirement.
This shift aligns Brazil with international best practices in model governance. In mature markets like Europe and North America, insurers increasingly rely on version control, documentation, and explainable logic as integral components of risk management. These governance standards are becoming the norm in Brazil as regulatory demands intensify.
It is no longer sufficient to simply reach the correct pricing outcome; insurers must demonstrate how they arrived there, providing version history, clear logic, and documentation that is understandable to both internal teams and regulators.
Explainable pricing models are now mandatory
As models integrate behavioural, geographic, and third-party data, they naturally become more complex. However, complexity cannot be used as an excuse. SUSEP now expects insurers to clearly articulate each pricing decision, including which variables were considered, how segments were defined, and the assumptions applied.
For instance, in a legacy spreadsheet model, a modification to a rating factor could go unnoticed, with no record of who made the change or why. In a governance-led workflow, every adjustment is recorded, justified, versioned, and auditable, providing both operational security and regulatory clarity.
This represents a pivotal shift: pricing is no longer the exclusive domain of actuarial teams. It now bridges technical modelling with business strategy and regulatory compliance. Successful implementation requires more than technology—it demands a collaborative culture where different teams can scrutinise, understand, and refine models collectively.
Governance as the new competitive advantage
Brazil’s insurance sector is projected to represent 6.4% of GDP by 2025, with notable growth in life and property lines (CNseg). Achieving this scale requires innovation and agility, but also long-term credibility and trust.
Revisiting the technical foundations of pricing is essential for preparing insurers for this new era. This goes beyond simply updating models; it involves adopting a mindset that places governance, traceability, and explainability at the centre of decision-making.
Pricing is no longer merely about predicting outcomes—it is about instilling confidence in the methodology used to reach them. Insurers that prioritise transparency in their pricing processes will not only keep pace with change but will also lead the evolution of high-performing, credible insurance in Brazil.
Read the full blog from Akur8 in Portuguese here.
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