Industry experts have been predicting significant growth in the Brazilian insurance market in the next few years. And today, Ebix an international supplier of on-demand software and e-commerce services to the insurance industry, announced that its subsidiary Ebix Latin America reached an agreement with SINCOR-SP (Syndicate of Insurance Brokers of the State of São Paulo) for the implementation and deployment of a multi-quote insurance exchange solution.
According to Ebix, there are about 70,000 brokers in Brazil, of which 40 percent operate in São Paulo and are associated to SINCOR-SP. The solution is the first broker-led initiative in Brazil to promote a New Business Exchange Hub, connecting both insurance brokers and carriers, the company said.
Initially Ebix, which also made news at the end of June when it announced its merger agreement with an affiliate of Goldman, Sachs & Co. had been terminated, will be processing and hosting the complete new business process for auto insurance. Other products and lines of business will be added, such as life, annuities and P&C.
Each state in Brazil has its own SINCOR and several of these from other states have already shown interest on making such a solution available to their associated brokers.
"We are very excited with this prestigious contract as it sets a leadership precedent for broker aggregations in other Brazilian states to follow," said Mario Nogueira, Ebix Latin America SVP and division head. "This deal lays out the mechanism for brokers to concentrate on selling insurance while outsourcing their IT needs to a exchange hub, on a business model that compensates the exchange provider based on registration and exchange utilization fees. We expect this deal to result in recurring annual revenues worth millions of dollars for Ebix Latin America, once fully deployed, from the exchange solution for auto insurance itself. As this solution is deployed across other products and the expanse of services is increased through this exchange hub, we expect the recurring revenue streams to grow accordingly."
The exchange solution for SINCOR-SP is expected to go live in Q4 of 2013, and according to SINCOR-SP, more than 600 brokers have already signed up for utilization of the exchange.
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