Bermuda is not alone in its interest in the Brazilian reinsurance market.

Lloyd's of London plans to expand in Brazil and is in the process of making a formal application to be an admitted reinsurer in the South American country.

Its first representative office will be based in Rio de Janeiro.

Eduardo Fox, manager of corporate and Latin affairs at Appleby, believes the decision of Bermuda-based companies to enter the Brazilian marketplace will counter Lloyd's presence there.

"I think it is a little bit of a counter to Lloyd's — Lloyd's opened a reinsurance company as a conglomerate and when I got the news from our associates in Brazil they asked me if Bermuda is going to do something about it," he said.

"I am glad to see that companies like XL and ACE are doing something by joining forces with local outfits there. I am very happy to hear that Bermuda has responded to this."

Lloyd's chairman Lord Levene, noted the recent legislative changes by the Superintendence of Private Insurance. He also indicated that the increasing force of Brazil's economy and the growing demand for insurance in the region, were additional reasons for the application.

"Lloyd's' decision to apply for a licence in Brazil recognises the growing strength of the Brazilian economy and the opportunities this presents for the insurance industry," Lord Levene said.

"With increased investment and economic reform there is set to be a growing demand for insurance and reinsurance, so the time for opening up the reinsurance market could not be better."