PartnerRe has become the latest reinsurance company to set up base in Brazil, with plans to expand its business in Latin America.

The global reinsurer yesterday announced the establishment of a representative office in Sao Paolo, and has applied for a licence to become an admitted reinsurance firm in Brazil.

The move follows the opening up of the Brazilian reinsurance market and builds on PartnerRe's growing presence in the Latin American market, where it has operated for more than 10 years.

It also comes after XL Re's decision to launch a new unit in the Rio de Janeiro.

In the past Brazil has excluded foreign companies from underwriting risks directly and the only way in for them was through partnerships with the state-owned IRB, which had until this point a monopoly on the sale of reinsurance for the past 69 years.

Now foreign reinsurers will be able to have a share of the market, expected to be worth almost $4 billion in the next two years.

PartnerRe president and CEO Patrick Thiele said: "This is an important strategic and operational development for PartnerRe. Having an office in Sao Paulo means we can better serve our Brazil-based clients by providing additional capacity and our expertise directly to the local market. It is also the next step in a thoughtful, long-term strategy of expansion into the emerging markets for PartnerRe."

Alvaro Madronero and David Preti have been appointed chief commercial officer and chief operational officer respectively to manage the firm's new Brazilian office.

Bruno Meyenhofer, CEO of PartnerRe Global, highlighted the importance of the Brazilian marketplace to PartnerRe, saying that it was a good opportunity to diversify the business its writes.

"The Brazilian market, of course, was a little bit closed because of the monopoly situation," he said. "If you look at the sub-continent, then the Brazilian market is by far the biggest in Latin America.

"It is a market in a strong and growing economy and we have got expectations for that to continue in the future. The growth rate is 10 percent in insurance and the reinsurance business is worth $1.5 billion to $2 billion — we expect the reinsurance market to grow as much as the insurance market."

He said the real beauty of the Brazilian reinsurance market is its availability of local knowledge and ability to interact with clients.

"It is an exciting thing to happen in Latin America," he said. "It is something that we have been waiting for for 10 years.

"It now opens up one of the most important reinsurance markets to us and we plan to continue to expand our co-operation with clients through the IRB as well.

"It is especially important to the clients to drive how they want to buy reinsurance and that we are available to facilitate whatever choice they make."

Mr. Meyenhofer also believes the size and sophistication of Brazil's financial markets means it has the potential to evolve into the hub of Latin American reinsurance, while it is also expected to be profitable because it is rarely struck by disasters such as hurricanes or earthquakes, he said.