12 months ago Joaquim Levy, Secretary of Finance, State of Rio de Janeiro, gave the opening address at Reactions’ inaugural Brazilian Reinsurance Conference. Since then, he has been instrumental in winning Rio de Janeiro’s bid for the 2016 Olympics and is beginning to implement a well-constructed plan that will see Rio deliver the games in six years.

With three weeks to go until this year’s conference, Joaquim Levy tells Reactions what is keeping him busy, how the insurance market is integral to a successful Olympics and what he is looking forward to about the conference.


Joaquim Levy, Secretary of Finance, State of Rio de Janeiro

Reactions: Since the last conference, what are the main developments attracting the insurance industry to Rio de Janeiro?

Joaquim Levy: The Olympics has brought a lot of exposure to Rio de Janeiro. People now want to know about everything that is happening here, and this is good for many sectors, including insurance and reinsurance. Many partners are also increasing their presence. When it comes to reinsurance, you cannot help but mention Lloyds who has bought two or three new syndicates to Rio de Janeiro in the past 12 months, and in less than two years since Lloyds’ arrival it has more than five syndicates operating out of here. The State welcomes new businesses and works with partners to foster their growth. Our dialog with Fenaseg, for instance, helps us to understand and help the industry. The proximity with regulators such as SUSEP and CVM is also a plus.

Brazil has benefitted from a quick recovery in its economy and new big developments are on the cards. This is also true for Rio, where there are several big projects in oil, steel, ports, shipyards and even a nuclear power plant.

R: Let’s talk about the Olympics a bit more. What do you see as being the main hurdles and what does the timeline look like for the next six years?

JL: To answer that, we need to look at the basics of the strategy from the beginning of the bid. We identified lots of positive things for Rio’s bid and formed partnerships at an early stage. It was evident to us that many people on the judging committee had their hearts in Rio but none would have voted for us if they had not sure about our ability to deliver. The voting committee was not going to take undue risk in their appointment of the host city. So, we focused on planning and having the best people involved.

Now that we have won, Governor Sergio Cabral is seeking advice from experience. As you know, recently he talked with Mr Blair [former UK Prime Minister Tony Blair], who immediately agreed to engage himself in our endeavour. The State, as well as the Mayor, has also set up close ties with Barcelona.

The experience of both cities is important, not the least because of the legacy the games left for Barcelona. However, conditions have changed significantly in the past 20 years and we value our good working relationship with the UK.

Like the UK, our plan for delivery was integrated with the bid. This will help to ensure that that the project comes out on time and on budget.

What are the hurdles? Transport and sanitation. The games are to be very green and is an opportunity to further clean the bay, our beaches and the lagoons. Rio also needs a credible transport system. We’re working on projects for a surface rail and to improve the metro. We’ve also had tremendous interest from investors in the airport, and a decision on this development is pending from the federal government.

The insurance and reinsurance market will play an essential role in reducing the risks associated with the delivery of these projects. For example, performance insurance is essential for the Metroline and the construction of some of the venues.

R: Who would you like to see at the conference?

JL: I would like to see new Lloyd’s syndicates and to hear from them whether their expectations have been fulfilled. Also, I would like to meet international brokers from the UK and Europe. Representation from Japan and the rest of Asia, particularly Korea, would be good. Plans cooled with the onset of the crisis, but now is the time to get reacquainted with the opportunities that Rio de Janeiro and Latin America have to offer. Several US insurance companies have been visiting Rio, and the companies are thinking about introducing innovative products in the local market. It will be good to hear from them about their reactions and new plans. Finally, with so much going for Latin America, the conference is a natural place for people from all over the continent to come together and discuss new opportunities for our markets.

Let me also tell you one of the best things that came out of last year’s conference: we learnt that it can help steer things in Brazil. Several presentations indicated that elements of the regulation needed to be clarified, particularly tax issues. So Fenaseg gathered key market players and went to Brasilia to discuss them. And some of these things were solved. That’s the best evidence that the conference yielded something concrete and of permanent value. One year later, it will be good to have a balance of these issues and discuss new ones.

Indeed, an interesting hallmark of the conference is that it is not just an opportunity to reach out the Brazilian market but a chance to address the fundamental issues in the market. The conference is not about hot air or just a feel-good gathering. In addition to be a wonderful place to meet the people that really move the market, there is a technical, professional side that is most valuable for participants, and very much appreciated by the sponsors.